The nonpartisan federal agency that analyzes legislation for Congress has been a downer for Republicans as they try to pass President Trump’s massive tax cut and agenda bill.
The Congressional Budget Office’s analysis of the House-passed bill has provided damning fodder for Democrats and left Republicans scrambling to prove to the public that the legislation would spur significant economic growth while slashing taxes for just about everyone.
“Democrats in Washington are once again recycling the same tired talking points that House Republicans are prioritizing tax cuts for the wealthy when, in reality, extending the Trump tax cuts delivers the biggest relief to working-class Americans and small businesses in a generation,” said House Ways and Means Committee Chairman Jason Smith, Missouri Republican.
Democrats have seized on the CBO’s number crunching, which has determined that the legislation would provide the most financial benefit to higher earners and little savings to middle- and low-income Americans, particularly those making $55,000 or less annually.
The CBO also determined that the legislation would add $3 trillion to $4.5 trillion to the national debt over 10 years, handing Democrats another powerful talking point in their effort to generate opposition to the bill.
The president’s chief budget analyst, Office of Management and Budget Director Russ Vought, is among the Republicans criticizing the CBO’s methods. He said the agency uses gimmickry that hides a $1.4 trillion deficit reduction over the next 10 years, achieved partially through $1.7 trillion in savings.
SEE ALSO: Senate Republicans make changes to tax and Medicaid provisions in ‘big, beautiful bill’
“If you care about deficits and debt, this bill dramatically improves the fiscal picture,” Mr. Vought said.
The White House and congressional Republicans have joined forces to discredit the CBO as a left-leaning agency that failed to predict the impact of federal tax cuts and other key legislation.
Revenue after Mr. Trump’s 2017 tax cuts was on average $170 billion higher than the CBO’s initial projections, and economic growth was a full 1.6% higher than CBO projected in the two years after enactment.
The CBO’s combined revenue predictions after the tax cuts fell short by a half-trillion dollars.
The CBO, created in 1974, is considered entirely nonpartisan. Staff are prohibited from making campaign contributions. The current director, Phillip Swagel, worked in the George W. Bush administration. Republicans have long complained that the CBO favors government spending programs over tax cuts.
“They’ve always been wrong, and they’ve always ignored what tax cuts will do to grow the American economy,” said House Majority Leader Steve Scalise, Louisiana Republican.
Mr. Swagel defended his agency in an interview Monday with CNBC, a relatively unusual step for a CBO director.
“I am a Republican,” he said. “This is a nonpartisan organization, and we work for the entire Congress.”
Democrats have delivered a steady stream of attacks on the bill to leverage opposition, all based on the CBO’s analysis. They echo the party’s messaging on the 2017 tax cuts: The poor and working class get robbed to benefit the rich.
The bill slashes $1.3 trillion over 10 years, primarily through reductions in Medicaid and food stamp benefits, which Democrats say would cancel out any benefit from lower taxes.
The CBO projects that nearly 11 million people will lose health insurance by 2034 because of the Medicaid cuts and reductions in Obamacare subsidies.
Many of those targeted to be kicked off social welfare benefits would be illegal immigrants or people who don’t qualify for the help, Republicans said.
Democrats are trashing the measure with a broader brush.
“This bill will rip health care away from millions of people and jack up the debt to fund tax breaks for billionaires,” said Sen. Elizabeth Warren, Massachusetts Democrat.
Democrats misrepresented the impact of the 2017 tax cut bill and are spreading lies about the proposal now working its way through the Senate, Mr. Smith said.
Lower-income earners pay far less taxes than high-income earners, but they received the biggest percentage cut, 13.5%, after Mr. Trump signed the 2017 tax cut bill into law.
The 2025 bill would permanently extend those cuts and add reductions aimed at the working class, including eliminating taxes on tips and overtime. The legislation also would create a deduction for some auto loan interest payments and reduce taxes on Social Security collected by seniors.
Those earning less than $30,000 annually would receive a 23% tax cut, Mr. Smith said.
The reductions would increase take-home pay for lower-income earners by an estimated $13,300, he said.
The legislation is poised for modifications in the Senate, but it’s unlikely to significantly differ from the House bill regarding cost and tax cuts.
The Tax Foundation, considered nonpartisan, said the bill would boost the economy by only 0.8%, a small fraction of the growth Republicans predict.
The White House Council of Economic Advisers projects the legislation would increase gross domestic product by 4.2% to 5.2% over the first four years and 2.6% over a decade.
The CBO forecast a much lower 1.8% in economic growth from the bill.
House Speaker Mike Johnson, Louisiana Republican, dismissed the prediction and said the CBO is “notorious for getting things wrong.”
He said that, like the 2017 tax cuts, the 2025 legislation “will be jet fuel for America’s economy.”
• Susan Ferrechio can be reached at sferrechio@washingtontimes.com.
Please read our comment policy before commenting.