Senate Republicans have directed the Joint Committee on Taxation (JCT) to score the cost of extending the 2017 Trump tax cuts as a continuation of current policy that would not add significantly to federal deficits, which would allow them to make those tax rates permanent.
The joint panel on taxation, which projects the deficit impact of all tax bills, scored the extension of 26 provisions of the 2017 Tax Cuts and Jobs Act as a continuation of “current policy” and therefore budget neutral, which dramatically lowers the project cost of President Trump’s megabill.
In a score released Saturday, the JCT projects tax-related provisions of the Republican bill as adding $441.5 billion to the deficit over the next decade, instead of the $4 trillion that Democrats say would be the projected cost of the tax provisions if they were scored on a “current law” baseline.
Much of the 2017 tax law, including the reduction in individual income tax rates, is due to expire at the end of 2025.
“Republicans finally showed their hand, and it’s completely dishonest. ‘Current policy baseline’ in a budget gimmick that is nothing more than smoke and mirrors instead of honest accounting. This bill will add trillions upon trillions of dollars to the national debt to fund tax breaks for billionaires — while Republicans want everyone to think it adds zero,” said Sen. Jeff Merkley (D-Ore.), the ranking member of the Budget Committee.
“Republicans who claim to care about fiscal responsibility should be outraged and doing everything they can to stop it. This is the Great Betrayal of working families where families lose, and billionaires win,” Merkley said.
Senate Republicans have argued for months that Senate Budget Committee Chairman Lindsey Graham (R-S.C.) has authority under the 1974 Budget and Impoundment Control Act to determine the baseline for scoring the budget reconciliation bill.
Republicans argue that Congress has used an asymmetrical system for scoring spending bills and tax bills in recent decades, as extensions of spending reauthorizations are often scored as extensions of current policy and therefore as budget neutral while extensions of expiring tax law are scored as adding to the deficit.
Democrats could challenge the Republicans’ use of a “current policy” baseline to score the extension of the expiring 2017 tax cuts as a violation of the Byrd Rule.
The Byrd Rule states that changes in law that increase the deficit for fiscal years beyond the 10-year budget window are subject to a 60-vote point-of-order objection.
If the parliamentarian rules that scoring the extension of the 2017 tax cuts as largely budget neutral in the years beyond 2034 as a violation of the Byrd Rule, Republicans may have to vote to override the parliamentarian or rewrite the bill.