Committee for a Responsible Federal Budget

Media Coverage

Nov 12, 2017|Bloomberg

Mnuchin Stands by Trump That GOP Tax Cut Is Biggest Ever

A study released in October by the nonpartisan Committee for a Responsible Federal Budget used Treasury Department data to calculate that Reagan’s 1981 cuts represented about 2.9 percent of GDP at the time.

There’s worse news for Trump and Mnuchin: the CFRB’s analysis also found that tax cuts enacted in 2010 as part of the Tax Relief and Job Creation Act amounted to 1.3 percent of GDP. And cuts enacted in 2012 as the American Taxpayer Relief Act amounted to 1.8 percent of GDP.

Nov 10, 2017|Reuters

Deficit worries complicate path for Republican tax cuts

The Committee for a Responsible Federal Budget, a nonpartisan budget watchdog in Washington, on Friday called a Senate Republican tax plan a “fatally flawed budget buster,” likening it to Republican legislation in the House of Representatives that the House tax committee has approved.

Both measures would add $1.5 trillion over 10 years to the annual budget deficit and the $20 trillion national debt, according to congressional tax analysts.

The watchdog group estimated that $900 billion of the projected $1.5 trillion deficit increase would come from business tax cuts. The remainder would come from individual tax cuts, including a cut in the estate tax on inheritance that would help only the richest Americans, it said.

Nov 10, 2017|Bloomberg

GOP’s Dueling Tax Overhauls Struggle to Pass a Key Red-Ink Test

As written, the Senate proposal “blows a massive hole in the debt,” said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, in a Twitter message Thursday night.

Nov 10, 2017|The Hill

Tax plan relies on ‘fantasy economics,’ says debt watchdog

A debt watchdog says the GOP is relying on “fantasy economics” in terms of overly-optimistic economic growth and deficit projections in its tax plans.

“It is frightening that so many members of Congress are willing to believe in fantasy economics based in no historical or mathematical reality,” said Committee for a Responsible Federal Budget president Maya MacGuineas.

MacGuineas made the comment in a statement on the release of the Senate tax bill, which would lower the corporate tax rate and top individual rate, raise the threshold for the estate tax and do away with a slew of deductions.

MacGuineas said the plans also relied on budgetary tricks and gimmicks to make the deficit math look better than it really is.

“As the Senate marks up this bill, we encourage members to either propose some serious pay-fors or scale back the cost of the bill and reject any gimmicks that hide its true cost,” she said. 

Nov 10, 2017|The Fiscal Times

Big Progress on Tax Reform, but Even Bigger Hurdles Ahead

Even if the tax writers can figure out a way to satisfy the Byrd Rule, with the expiration of some cuts in year 10 looking like a real possibility, there’s still the broader question of running up the debt to fund tax cuts that disproportionately benefit corporations and the wealthy. The Committee for a Responsible Budget published an analysis of the House and Senate tax bills Friday, finding that they reduce revenues by about $1.5 and $1.4 trillion respectively over 10 years. While this means that both likely fall within the budget limit for the tax bill, CRFB says the true costs will likely be higher, given interest on the added debt and the likelihood that some temporary cuts will become permanent. 

Nov 10, 2017|Los Angeles Times

Op-Ed: Whatever happened to the party of fiscal responsibility?

The GOP retreat from fiscal conservatism is twofold: The tax plan helps balloon federal deficits, and it does nothing to address the rising costs of entitlements as the population grows older and sicker.

The Committee for a Responsible Federal Budget estimates that the proposed GOP House tax cuts would “result in debt reaching the size of the economy by 2028 and exceeding its post-World War II record a year or two later.”

Nov 9, 2017|Tax Notes

Cost of House Tax Bill’s Changes Creep Higher, Threaten Path Ahead

When combined with the other comparatively minor changes to the bill, the JCT said the amendment elevated the bill from a $1.41 trillion tax cut to a $1.57 trillion tax cut. And according to Ed Lorenzen of the Committee for a Responsible Federal Budget (CRFB), an additional $72 billion in off-budget costs described in the initial JCT estimate’s footnotes brings the total cost of the bill to $146 billion over the reconciliation instructions’ limit.

“[It’s] hard to make that up with loose change,” Lorenzen said. “There will need to be fairly significant changes or new offsets to the bill before the committee finishes markup or in a manager’s amendment when the bill is considered by the House.”

Failure to do so could spell procedural trouble for the tax bill once it goes over to the Senate, according to Lorenzen, who said that if the House passes a bill that doesn’t comply with the reconciliation instructions, “there would be a significant risk that the [Senate] parliamentarian would rule that the bill is not eligible for privileged status as a reconciliation bill in the Senate.”

In such a scenario, the Senate wouldn’t even be able to take up the bill for consideration without the 60 votes needed to waive a point of order, he said.

Nov 8, 2017|

Do tax cuts pay for themselves? Experts say "no"

But George H.W. Bush denounced them as "voodoo economics" before he became Reagan's vice president. Maya MacGuineas, who heads the nonpartisan, nonprofit Committee for a Responsible Federal Budget, said those contentions were wrong then, and are wrong today.

"There has always been this myth that tax cuts pay for themselves, and it has always been a desirable one, because who wouldn't want freebie economics to be true?" said MacGuineas.

Nov 7, 2017|The Washington Post

Maya MacGuineas is fine being the ‘fiscal skunk at every party’ when it comes to taxes

“President Trump has actually laid out a lot of the right things we need to do.”

Now there’s something you don’t hear every day. But when it comes to taxes and regulations, Maya MacGuineas, president of the Committee for a Responsible Federal Budget, thinks the president’s framework is the right one. “We need to reform the tax code. We need to change our regulations,” MacGuineas told me in the latest episode of “Cape Up.” “Some need to be fewer. Some need to be more, but we need to look at our regulatory burden in this country.”

Nov 7, 2017|NPR

A Math 'Gimmick'? GOP Proposes Creating New Tax Policies, Then Letting Them Expire

"Expensing itself has its detractors of how effective it would be," said Marc Goldwein, senior policy director at the Center for a Responsible Federal Budget, a Washington nonprofit that advocates for smaller deficits. "But it's sound theory that expensing should increase investment, which increases economic growth and is good for the economy overall."

Nov 7, 2017|Roll Call

Delays, Caps and Chains, Tax Bill Gimmicks Explained

For provisions that are indexed, the bill changes the way the tax code measures inflation. Under current law, adjustments are made using the consumer price index, which, according to the Committee for a Responsible Federal Budget, can overstate inflation because it fails to account for the fact that when prices of similar goods change, consumers often switch to cheaper options.

Nov 7, 2017|Sun Sentinel

GOP tax plan bad for Florida, nation | Editorial

Maya MacGuineas of the Committee for a Responsible Federal Budget told The Washington Post that the proposal “emphasizes the need for corporate reforms and how our tax system works. But this is still a deficit-exploding tax cut at a time when the deficit is at near-record levels.”

Nov 7, 2017|The Hill

House tax bill runs afoul of Senate rules: analysis

“We estimate the legislation would add about $155 billion to the deficit in 2028; the Byrd rule does not allow reconciliation legislation to add to the deficit at all beyond the budget window (which currently ends in 2027),” the Committee for a Responsible Federal Budget (CRFB) wrote in an review of the legislation.

Changing that could require Republicans to make corporate tax cuts temporary, which the group said could undermine the economic growth they hope to stimulate with the reform.

The bill, the CRFB noted, could also violate the Byrd rule in other, smaller ways. 

“For example, it generates $74 billion in 'off-budget' revenue for Social Security, including $53 billion in additional revenue from certain business income being reclassified as wage income as well as other smaller provisions increasing the amount of taxable wage income. The Senate Parliamentarian may rule some of these provisions to be direct enough changes to the Social Security payroll tax that they cannot remain in the legislation without it losing privilege,” the group wrote.

Nov 7, 2017|Mother Jones

Donald Trump’s Tax Plan Would Give Nearly 50 Percent of Tax Cuts to the Top 1 Percent

To get around their self-imposed deficit limit, House Republicans are phasing out their new $300-per-adult tax credit after 5 years. Rep. Kevin Brady (R-Texas), the bill’s author, says the credit “will never go away” because Congress will renew it in five years—substantially increasing the cost of the tax cuts. The $300 credit is likely to be one of the most popular aspects of the plan, and the bill’s authors are counting on the fact that lawmakers will feel tremendous pressure to renew it when it expires. Critics of Brady’s accounting gimmick, such as the nonpartisan Committee for a Responsible Federal Budget, argue that a permanent $300 credit should be included in the bill’s cost if Republicans plan to keep it indefinitely. 

Nov 7, 2017|Huffington Post

Trump’s Trickle-Down Rich Man’s Tax Cut Is Simply Cruel To Many Middle-Class Families

There’s a lot more in this plan to make you sick, but now let’s return to the overall effects. This billionaire’s bonanza is estimated to add $1.5 trillion to the federal deficit over a decade, and that’s “before accounting for interest or possible gimmicks,” according to the bipartisan Committee for a Responsible Federal Budget.

Nov 7, 2017|BenefitsPRO

CRFB: House tax bill won’t pass Byrd rule in Senate

The tax bill currently being marked up by the House Ways and Means Committee would not satisfy the so-called Byrd rule in the Senate, according to the Committee for a Responsible Federal Budget, a bipartisan think tank that advocates for deficit-neutral tax reform.

A core provision of the Byrd rule requires that laws passed under the budget reconciliation process not add to deficits outside the 10-year budget window. If the Senate is to avoid an all-but-guaranteed filibuster by Democrats and pass the bill under reconciliation with a simple majority, the tax bill will have be deficit neutral in the long run.

CRFB says the Tax Cuts and Jobs Act will add $155 billion to the deficit in 2028, the year after the 10-year budget window ends in 2027.

That would amount to a “significant” violation of the Byrd rule, and would require equally significant adjustments to the TCJA in order to fix, say economists at CRFB.

Nov 7, 2017|The Fiscal Times

Will the GOP Tax Plan Stall in the Senate?

Calculations by the nonpartisan Committee for a Responsible Federal Budget show that the House version of the tax bill will increase the deficit by $155 billion in 2028. That projected deficit would allow any senator to use the Byrd Rule to block the bill.

What can Republicans do? CRFB says the tax writers have two broad options: 1) make some of the tax cuts expire in 2027; or 2) write a “fiscally responsible” bill that doesn’t need to resort to gimmicks like sunsetting problematic components.

Nov 7, 2017|ThinkAdvisor

‘Rothification’ of 401(k)s Likely in Senate Tax Plan

But analysis performed on the bill by the Committee for a Responsible Federal Budget provides a dire outlook, stating that as a result of the bill, “trillion-dollar deficits would return by 2020 and debt would exceed the size of the economy in just over a decade.”

Citing analysis by the Joint Committee on Taxation, the Committee states that the House GOP tax plan would increase deficits by $1.487 trillion over 10 years. “Those deficits would lead to higher debt, resulting in $270 billion in additional interest costs. As a result, the legislation would add $1.75 trillion to the national debt by 2027.”

Nov 6, 2017|The Washington Post

The Finance 202: The ticking time bomb in the House GOP tax plan

A Senate roadblock looms. Also from Bloomberg: "The draft House tax plan is going nowhere in the Senate as written. The legislation to enact $1.41 trillion worth of tax cuts would run afoul of a Senate budget rule without substantive changes that would either raise more government revenue or scale back some of the benefits directed toward businesses and individuals, according to experts on Senate procedures. 'This bill would not become law as is,' said Marc Goldwein, policy director at the Committee for a Responsible Federal Budget."

Nov 5, 2017|The Washington Post

Six problems for the GOP tax plan

Deficit hawks won’t like it. The Committee for a Responsible Federal Budget finds, “According to the Joint Committee on Taxation (JCT), the TCJA would increase deficits by $1.487 trillion over ten years. Those deficits would lead to higher debt, resulting in $270 billion in additional interest costs. As a result, the legislation would add $1.75 trillion to the national debt by 2027.” That is not all, however. “Three major provisions in the bill arbitrarily expire after five years, making them look much cheaper than they actually are. There is no legitimate policy justification for these sunsets – the intent is clearly to force Congress to extend them in the future. Doing so would add over $350 billion to the cost of the bill.” (And if Congress rejects cuts in Medicare and Medicaid in the spending bill, the debt will go up even more.)

Nov 5, 2017|Financial Times

Republican grumblings hover over US tax reform

Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, a think-tank, said the House bill also risked falling foul of strict Senate budget rules.

In order to pass a bill with 50 votes rather than the usual 60 it must not add to the deficit beyond 10 years, even if it loses money in its first decade. But Mr Goldwein said it was “extremely obvious” the House bill would fail that test, meaning Democratic opposition could kill it.

“It would not be able to pass the Senate. They would have to amend it and they would have to make serious amendments,” he said.

Policymakers’ options included scaling back tax cuts, having proposed cuts expire after 10 years, or closing even more tax breaks, such as those for retirement savings and healthcare costs, he said. But those ideas are politically unpalatable. “I could see it getting so messy that it basically becomes unpassable and they have to some degree to start over,” he said.

Nov 5, 2017|The Washington Times

House Republicans sneak in ‘hidden tax increase’ each year by changing cost-of-living calculation

“Chained CPI is absolutely a more accurate measure of inflation,” said Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget. “All economists that aren’t being hackish agree that chained CPI is better.”

Nov 3, 2017|The Washington Post

Voters reject the GOP’s tax ideas

Moreover, because most Americans oppose tax cuts for corporations, a plan that disproportionately benefits corporations will be a hard sell. The Committee for a Responsible Federal Budget finds: “Of the $1.5 trillion cost, roughly $1 trillion comes from business tax cuts. Individual tax cuts make up another $300 billion, and the ultimate repeal of the estate tax accounts for the remaining $200 billion.” In short, when at least 80 percent of the breaks go to corporations or rich heirs, Republicans will be on defense. When the remaining $300 billion in individual tax breaks provides additional help for the rich (e.g. a rate reduction from 39.6 percent to 35 percent for those making between $480,000 and $1 million), it quickly becomes obvious that tax breaks for the middle class are an afterthought.

Nov 3, 2017|CBS News

GOP tax plan: 3 lessons for Trump in Reagan's cuts

By Representative Brady's admission, the House bill costs $1.5 trillion over 10 years, although other estimates place the tab far higher. As the Committee for a Responsible Federal Budget noted, the recently passed House budget blueprint called for a revenue-neutral tax bill and $200 billion in spending cuts -- an unlikely scenario. 

Nov 3, 2017|LifeZette

Taxes to Be Filed on a Postcard?

Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, quipped: "I think it's going to be a pretty big postcard."

But Goldwein said the bill would make the system simpler, primarily by doubling the standard deduction — to $12,000 for individuals and $24,000 for married couples. He said that would lead to fewer people itemizing, which is much more straightforward.

Apart from the headaches of filing taxes under a complicated system, Goldwein said lost time and money complying with the code hurts the economy. Tax software has mitigated but not eliminated that concern, he said.

"There certainly are costs to complexity," 

Nov 3, 2017|LifeZette

Trump Predicts Corporate Tax Cut Will Bring Back Jobs

Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, said he believes supporters of the plan are overselling its potential to spark long-term growth. He said structural problems, such as slow population growth and an aging population, will restrain growth.

Even if the benefits are smaller than the advocates predict, Goldwein said, tax reform is still beneficial because "We need every decimal point [of growth] we can get."

But Goldwein added that the steep corporate tax cuts in the bill are not balanced with enough spending cuts or elimination of loopholes to make it deficit-neutral. He said the gains from tax cuts could be lost to higher debt.

"It's kind of a jump ball," he said. "I don't know which will be a more powerful factor."

Nov 3, 2017|

GOP, Democrats Spin Tax Plan

That’s nowhere close to President Ronald Reagan’s 1981 tax cut, which was 2.89 percent of GDP over a four-year average. That’s according to a 2013 Treasury Department analysis on the revenue effects of major tax legislation. Five more tax measures since 1940 had an impact larger than 1 percent of GDP, and the Committee for a Responsible Federal Budget includes a 1921 measure as also being larger than the GOP plan. That’s eighth place for Trump’s “biggest tax cut in our history.”

Nov 3, 2017|Bloomberg

House Tax-Cut Plan Hurtles Toward Senate Roadblock

The draft House tax plan is going nowhere in the Senate as written.

The legislation to enact $1.41 trillion worth of tax cuts would run afoul of a Senate budget rule without substantive changes that would either raise more government revenue or scale back some of the benefits directed toward businesses and individuals, according to experts on Senate procedures.

"This bill would not become law as is," said Marc Goldwein, policy director at the Committee for a Responsible Federal Budget.

Nov 2, 2017|Reuters

Trump's Tax Cut Won't Be the Biggest in U.S. History

The Committee for a Responsible Federal Budget, a bipartisan Washington think tank, estimated the Trump tax cut could be the fourth-largest as a percentage of gross domestic product, or GDP, a measure of national economic output.

Nov 2, 2017|Business Insider

A part of the new GOP tax plan will be a tough sell for Republicans in New Jersey, New York, and California

Most of the claimants that benefit from the deduction live in traditionally Democratic states like California and New York. The Committee for a Responsible Federal Budget found that New York and California receive about 30.5% of the total benefits from the SALT deduction.