When it comes to the myriad, glaring absurdities hiding in plain sight amongst the grotesque menagerie of Donald Trump’s second presidency, it’s hard to pick a favorite.
As is the case when you make a top 10 list of anything else (films, books, athletes or whatever) you don’t want to snub the classics and the legends just because today’s greats seem better in the moment. Is Stephen Curry a better basketball player than Bob Cousy? Well, yes, obviously. But then again, no, obviously not.
It’s the same thing with preposterous Trump collocations. Is it more ridiculous to describe as “transparent” and “fully public” a process whereby Elon Musk deputizes a 19-year-old called “Big Balls” to commandeer sensitive government databases than to ordain Trump, a billionaire who sits upon golden toilets, the blue-collar messiah? Yes. But also no.
Difficult as it is to rank Trumpian absurdities, the notion of a political movement fanatically dedicated to restoring fiscal responsibility availing itself of the so-called “current policy baseline” to claim that $4 trillion in tax cuts are costless (literally costless) has to be in the top five, with all due respect to, say, claiming that the man for the job when it comes to restoring presidential prestige is a guy who once called King Charles the “Prince Of Whales.”
If you’re not familiar with the current policy baseline, it’s a budgeting principle (and I use the term “principle” very loosely) which essentially argues that if you’re already doing it, continuing to do it doesn’t count as irresponsible, because… well, because addicts will be addicts, basically. That’s about the best way to sum up the fatalistic logic on offer here, and that’s an apt metaphor because it is indeed the logic that actual addicts employ.
In the context of the expiring Trump tax cuts, the application of this ludicrously self-referential reasoning would find Republicans claiming that in fact, extending the tax breaks has no new impact on America’s fiscal trajectory because, after all, we’re already operating with the law in place.
I’m not typically one to cite the Committee for a Responsible Federal Budget, but I will here. As the non-profit explained late last month, the current policy baseline “assumes that all temporary policies are actually permanent.” The CRFB described that argument as “nihilistic, ahistorical and inaccurate.” It’s all of those of those things, but it’s also just a plain, old lie. Either something’s “temporary” or it’s “permanent.” It can’t be both.
That said, it’s fitting that today’s Republicans would seek to justify a budget-busting tax cut for the wealthy on the excuse that up’s actually down. That black and white are the same color (except when it comes to voting rights). This is a party that denies not just individual facts, but disavows facts as a concept.
A few days ago, The New York Times published a hilarious compendium of metaphors to explain what it is Republicans would be doing should they attempt this end-around. You can (and definitely should) read them all for yourself, but here’s one I especially enjoyed, from Michael Peterson, a deficit reduction advocate:
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.'”
If you’re inclined to ask whether anyone (i.e., Republicans or Democrats in any Congress) could actually get away with this, the answer’s “no, hopefully not.” The Senate parliamentarian should shoot the idea down with an anti-aircraft battery. But the GOP could always overrule her or — and at the risk of jumping to conclusions — fire her altogether.
As discussed here over the weekend, these tax cuts have the potential to balloon America’s debt-to-GDP ratio to 214% by 2054, 47ppt higher than a baseline scenario where they’re allowed to expire, according to the CBO.
Scott Bessent, shilling for Trump and also for his own, personal finances and the finances of people like him, argues that not extending the tax cuts would lead to a severe US recession. I wonder if Bessent, as Treasury Secretary, has given any thought to how the bond market might react in a scenario where Trump pressures the GOP to fire Elizabeth MacDonough on the way to declaring the tax cuts free under the current policy baseline.
On that point, Penn Wharton’s Kent Smetters told Bloomberg that using this maneuver would be tantamount to telling the bond market that America has “really just given up on controlling deficits.” Punchbowl reported last week that Republicans on the Senate Budget Committee “are planning to begin a series of meetings” with MacDonough to feel her up — wait, sorry — to feel her out, on the current policy baseline idea. (When you’re a US senator, they let you do it.)
Coming full circle, this juxtaposition — between a Republican party prone to the worst sort of deficit wailing, and a Republican party prepared not only to throw fiscal caution to the wind in the interest of cutting taxes for the wealthy, but in fact to simply declare those cuts free by assuming the very thing the GOP’s trying to justify (i.e., the extension of the tax cuts) — represents a complete dereliction of duty and a wholesale abdication of responsibility.
In the same CRFB study mentioned above, the group noted that adopting the current policy baseline “effectively assumes Congress has little autonomy or decision-making power and establishes a type of circular logic where any policy that lawmakers want to enact is assumed to be costless because it already reflects ‘reality.'”
To be fair to this Congress, they haven’t exhibited anything like autonomy or decision-making power since Inauguration Day, and they’ve already surrendered to Trump and Musk the power of the purse. So why not just adopt petitio principii as the governing logic for anything this White House wants to do?
Love the Latin Mr H. !! I wish I could read Cicero and Julius Caesar in Latin, but veered off into life sciences too early.
Omnia Canada in tres partes divisa est?
I read most of the Aeneid in Latin in high school. It’s taken me decades to recover, but I seem to have come out of it with a sixth sense for misspellings and a decent vocabulary, if nothing else (and nothing else means never learning any spoken languages).
But this reimagining of the tax cuts expiring as a recession-inducing tax increase is just more GOP skulduggery. The cuts had an expiration date because that was the price of getting them passed in the first place. But the Dems are being naive and/or disingenuous if they don’t admit knowing that the GOP would always frame the lapsing of these cuts as an economy-wrecking tax increase – from day ONE.
Maybe the GOP can combine the obfuscation of its trite household budget parallels with Trump’s recent discovery of “groceries,” and learn how expiration dates work by way of a little coupon clipping.
H, I thought you were a MMT guy.
Congress long ago abdicated responsibility for being fiscally responsible with the public purse. I fondly remember when a Democrat president within 8 years almost eliminated the deficit to the point that serious discussions took place regarding continuing issuing 10 year debt just to keep market/mortgage indexes available.
I mean, Joe, if you think a productive way to leverage the (essentially unlimited) fiscal leeway afforded to the US by virtue of the dollar’s reserve status and USTs’ role in global finance is to hand out money to the richest 1% of Americans and to corporations, then I guess that’s ok with me. I mean, not really — it’s not “ok” with me, but then again it’s going to impact all of you far more than it will me, so you know, go for it!
I was being sarcastic. This is indeed a war being waged. The election was bought and paid for by the rich to get even richer. Our line of defense is a court system whose power is derived from voluntary adherence to their findings. At the top of the judicial heap are 5 Supreme Court judges who lied their way through confirmation hearings and cannot be trusted, and a supreme leader who is a choleric buffoon.
I’m sure no one is paying attention to the GSE’s anymore but over the weekend I read some disturbing news. Yes, I still follow them, because I firmly believe the government takeover was absolutely illegal and that the Obama administration had no intention of trying to “conserve” them through the net worth sweep. And because I refuse to quit on a cause I believe in.
“Trump’s administration is also seeking to privatize the Federal National Mortgage Association (OTC:FNMA), known colloquially as Fannie Mae, and the Federal Home Loan Mortgage Corporation, known as Freddie Mac.”
This was a rumor during his first administration as well, however it seems he’s found a FHFA director this time who is actually willing to go through with it. This, in my humble opinion, would not be bad news.
From the same article though, I found this – “Beyond privatization, Trump was also seen looking at a proposal to transfer the Treasury’s ownership of the two to a sovereign wealth fund proposed by Trump.”
Now that last little seemingly inconsequential aside should scare the hell out of everyone.
I bring it up because it felt applicable to this piece.
Its also somewhat ironic that the market is celebrating a tariff “narrowing” – i.e. lower tariff revenue as some big deal when the original logic on tax cut pay fors was that the tariffs were going to replace the lost revenue from making tax cuts permanent.
In the end, I think that will still be the story the Administration sticks to – we will make all the revenue up in tariffs.
Temporary or permanent….you forgot transitory 🙂
P-
This would open the door to some incredible reconciliation shenanigans.
Example: Step 1, reduce capital gains taxes to zero, but only for 1 quarter. The pay-for to get that to budget neutral would be pretty easy to come up with, allowing it to pass through reconciliation. Step 2, extend the cap gains cut indefinitely. No pay-for required since it’s just the budgetary status quo now.
The parliamentarian is a woman? Must be a DEI hire, they’ll show her the door soon enough.
p.s. republicans decrying the deficit yet wanting to cut taxes! Inconceivable!