The Washington Post

Opinion

George F. Will

The price of GOP gibberish about Trump’s tax cuts? About $4 trillion.

An expensive extension of Trump’s 2017 tax cuts prompts some wild Republican verbal gymnastics.

April 9, 2025 at 7:00 a.m. EDT

The glossary of odd phrases employed to describe, and sometimes to obscure, economic policy has recently included “quantitative easing.” This Federal Reserve fog means increasing the money supply. Today, “dynamic scoring” and “current-policy baseline,” when deciphered, reveal the tangle of budgetary complexities and political temptations swirling around 2025’s momentous domestic debate about the fate of the first Trump administration’s signature achievement, the 2017 Tax Cuts and Jobs Act.

It was enacted under “reconciliation,” a parliamentary maneuver that prevents a filibuster, enabling passage with 51 votes. Under Senate rules, this evasion of the filibuster requires assurance that the legislation at issue, which can increase the deficit within 10 years, will not do so after that. So, Congress in 2017 stipulated that many important TCJA provisions would expire at the end of this year.

Senate Republicans, however, might use two arguments to justify asserting that a permanent extension of the TCJA under reconciliation will not add to the deficit. There is a consensus among economists that an extension would produce a roughly $4 trillion revenue loss over a decade. Consensus, meet dynamic scoring and the current-policy baseline.

“Scoring” tax legislation involves predicting its consequences on the behavior of individuals and businesses. “Dynamic” scoring involves anticipating the macroeconomic effects of such legislation on working, saving, investing and growth.

A paper presented at a September Brookings Institution conference affirmed “a growing capacity to analyze” behavioral responses to legislation, and hence the legislation’s “economic impacts and their feedback to the budget.” Dynamic scoring, although inevitably problematic, should be attempted because measures like the TCJA must substantially change incentives for various economic behaviors. The problem is the complexity of anticipating trillions of working, spending, saving and investing decisions made by hundreds of millions of Americans in the legislation’s aftermath.

Also problematic is what the authors call, in a wonderfully delicate phrase, “motivated reasoning.” Politically motivated, that is, in this era of “amplified polarization and heightened suspicion about expertise.”

A bracingly indelicate warning comes from Maya MacGuineas, president of the Committee for a Responsible Federal Budget: Absent politically neutral scorekeepers, dynamic scoring becomes “make-believe scoring” wielded mischievously by people determined to “prove,” with cherry-picked assumptions, that the 2017 Trump tax cuts, made permanent, would “pay for themselves” with tax revenue resulting from faster economic growth.

The committee lists seven respected organizations that have estimated, using models with some differing assumptions, the dynamic feedback estimates of the results of fully extending the TCJA. The most optimistic of the seven models projects revenue from enhanced growth equaling just 16 percent of revenue losses. The House of Representatives’ budget resolution, a virtuoso performance of motivated reasoning, assumes that extension of the TCJA will stimulate more than 3½ times the revenue anticipated by the most optimistic model, and 11 times the average projected by the seven.

(A cost of having a Republican-controlled Senate is some dreadful people confirmed to high offices, e.g., the secretaries of defense and of health and human services. A benefit of Republican control was supposed to be survival of the filibuster. If, however, Republicans make the rules governing reconciliation more elastic, evading filibusters will become easier. A lesson about the costs and benefits of a Republican-controlled Senate has been learned.)

The “current-policy baseline” argument is, astonishingly, this: Although extending the TCJA provisions that are due to expire would, under conventional rather than dynamic scoring, reduce revenue by about $4 trillion, this would actually be properly described as a $0 tax cut. Why? Because the cuts already exist as current policy.

The New York Times invited some budgeting experts to illustrate current-policy baseline thinking with analogous reasoning. Two responses were amusing.

Michael Peterson of the Peter G. Peterson Foundation: “Your daughter is graduating from college. You have been paying for her education, so you are expecting to have a big improvement in your budget. However, after graduation, your daughter announces that there’s no need for her to go find a job, since covering her expenses is just a continuation of the ‘current policy.’”

The Manhattan Institute’s Jessica Riedl: “Last year, despite being deeply in debt, I bought a $100,000 sports car. So next year, buying another $100,000 car is not irresponsible because I am merely spending the same amount of money as the year before. And if I purchase ‘only’ a $70,000 car, then I should be congratulated for reducing my annual spending by $30,000.”

Time was, Republicans were acknowledged (often grudgingly) as they presented themselves: as fiscal realists. Another lesson has been learned.

By George F. Will

George F. Will writes a twice-weekly column on politics and domestic and foreign affairs. He began his column with The Post in 1974, and he received the Pulitzer Prize for commentary in 1977. His latest book, "American Happiness and Discontents," was released in September 2021.

https://www.washingtonpost.com/opinions/2025/04/09/trump-tax-cut-extension-republicans/