How Much Will Tax Bill Add to Deficit? CBO May Answer by Nov. 6
(Bloomberg) -- House Ways and Means Chairman Kevin Brady said he expects an official score on how much the Republican tax bill will add to the U.S. budget deficit before his panel approves it.
The Texas Republican said a traditional static score -- which doesn’t consider how tax cuts could affect behavior -- would be released before or during his panel’s mark up of the bill. He said a so-called dynamic score, which assumes macroeconomic benefits due to tax cuts, will come after the bill clears the panel.
The twin referees of whether a legislative proposal will add to the federal deficit are the Joint Committee on Taxation and the Congressional Budget Office. CBO, the nonpartisan scorekeeper, proved to be a formidable referee for Republicans during the Obamacare repeal debate, finding that their health-care legislation would have caused millions to lose their coverage. It gave Democrats a powerful cudgel that helped scuttle the effort, even though many Republican lawmakers tried to discredit the budget office’s findings.
Under budget rules Republican leaders have said they plan on adhering to, if tax cuts aren’t offset and they add to the long-term deficit, they have to expire. Some deficit hawks, such as Senator Bob Corker of Tennessee, have said that they don’t want a tax bill to add to the deficit after reasonable economic growth is taken into account.
The budget adopted on Thursday allows tax legislation to add up to $1.5 trillion to the deficit, and the rough estimates indicate that the tax cuts will cost much more. That forces Republicans to make tough decisions on limiting deductions and carve-outs to prevent the bill from exploding the deficit.
Brady said the Ways and Means Committee will release the House GOP tax bill on Nov. 1 and begin marking it up on Nov. 6. He added that he expects the markup of tax legislation to last “multiple days” and he’s working with his Democratic counterparts to “hold the bulk of it during working hours.”
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