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Taxes and Texas and Other Disasters

The news was largely swept away by the flood waters that continue to wreak havoc on Texas and Louisiana, but the Republican party has officially commenced the tax reform part of its legislative agenda to make America great again. President Donald Trump kicked it off with a little-heard speech in Missouri, and it’s probably for the best that such an inauspicious start was largely swept away the flood waters.
We’re the old-fashioned conservative Republican types who like our taxes low and government lean, and we’ve shared to a certain wary extent in the stock market’s giddy expectation that Republican majorities in both houses of Congress and a more-or-less Republican president might nudge the economy in that direction, but for now we’re warier than ever. The speech sounded all the same populist soak-the-rich themes that Trump expounded during his burn-down-the-establishment campaign, yet seemed to promise all the usual old-fashioned conservative promises about tax cuts for the rich along with everyone else, but didn’t explain with any specificity about how they’re going to pull that off, much less while keeping all those newfangled and old-fashioned campaign promises about reducing the budget deficit and eventually even the national debt.
We doubt that any of those darned newfangled Democratic liberals with their tax-and-spend ways were swayed, even that long-established Democratic Senator from Missouri that Trump threatened by name during a strikingly partisan oration, and we are not assured that even the needed entirety of those of Congressional Republicans will be on board. It largely depends on the details that have not yet been revealed, of course, but whatever they might prove to be they’re bound to offend either the populist of or traditional wings of the Republican party, and in any case won’t please of those darned tax-and-spend Democrats.
Even in a best-case scenario a massive tax cut to whoever without similar cuts in the entitlement programs that are driving the annual deficits and mounting national debt would lead a a temporary budget shortfall, especially with all the increased defense spending that every corner of the Republican party is proposing, and the debate is lately even more complicated than that. The short term budget shortfalls the as-yet unspecified Republican proposals presumably propose assume they’d be offset by the savings they’d realized from repealing and replacing the hated Obamacare law, which somehow didn’t happen despite Republican majorities in Congress and a more-or-less Republican president, and the cost is likely to swell after the fourth-most-populous metropolitan area in the United States finds itself under even more literal water than the president’s approval ratings.
The cost of gasoline is already up by about 25 percent around here after the city that provides a fourth of America’s energy was flooded, the extra five bucks that motorists are paying per fill-up won’t be going to any of the other businesses around here, and the national economy hasn’t yet started to feel the effects of its fourth-most-populous city being underwater. Though we wish them the best all those Republicans are wading into this debate with strong headwinds and few few victories to bolster them, and we expect their allies on the stock markets will be hedging their bets on the promises that had been made to them, which also won’t help. That’s not to mention all the already complicated talk about continuing spending resolutions and debt ceiling increases and funding for crazy campaign promise about building a tall wall across the entire Mexican border, along with the rest of the bipartisan craziness of late.
There’s also all that drip-drip-drip flooding about “Russia,” the latest nuclear saber-rattling from the nutcase North Korean regime, and a general sense that we’re all in the midst of one of those one-thousand year floods. A severe cut in America’s steepest-in-the-world corporate tax rates really is a good idea, even if they do pay an effective rate that’s more-or-less competitive after all the tax exemptions that might or might not be retained under the as-yet-undisclosed Republican proposals, but that’s a pretty dry subject given all the recent floods. There’s an old-fashioned conservative Republican case to be made that cuts in the top rates that will benefit the poor folks those rich folks will wind up hiring, but Trump promised that he and his fellow billionaires would take a hit without revealing the tax returns that would prove his claim, and he’s still a poor advocate for low taxes and lean government and old-fashioned conservative Republicanism.
Those darned Democrats and their tax-and-spend ways don’t seem to have any better ideas, so for now we’re bracing for one of those occasional thousand-year disasters.

— Bud Norman

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The Boring Bureaucrats of the CBO Score

The Congressional Budget Office is back in the news, what with all this fuss about repealing Obamacare and replacing it something or another that in any case isn’t to be called Trumpcare, and we’re heartened to see their reassuring initials again. Back when political news was mostly a boring affair about arcane accounting questions the boring bureaucrats of the CBO were always in the lead or at least third paragraph of every story, but that was before the political news became more entertainingly about the latest “tweets” and the accusations of treason being flung from both sides, so lately we find ourselves missing the old days.
That good ol’ CBO finds itself back in the news because of its long-awaited “scoring” of the first of three promised phases of repeal of Obamacare and replacement with something that nobody is calling Trumpcare. The report contains plenty of argumentative ammunition for the Democrats who are unanimously opposed to the plan, possibly enough to scare some of the Republicans with whetted thumbs against the political winds, and a few big numbers that speak well for the first phase of the scheme but might embolden its conservative critics. All in all it was the desultory conclusion that you’d expect from a numbers-crunching bunch of boring bureaucrats, which is what the CBO is paid to be, and within a certain margin of error involved in all human undertakings we’re inclined to accept their findings.
One finding is that 24 million fewer Americans will have health insurance over the next decade if the current proposals of repeal and replace are enacted, which is a number hard for the most pro-reform media to spin, and which the anti-reform media gleefully headlined. The pro-reform forces therefore questioned the supposedly boring objectivity of the bureaucrats at the CBO, rightly noting its past errors in overstating the benefits and understating the costs of Obamacare, but they’ve conveniently forgotten how that happened. We were among the anti-Obamacare voices who noted that the CBO was diligently “scoring” those costs and benefits according to the pie-in-the-sky assumptions and spreadsheet legerdemain that the Democratic administration and Democratic majorities in Congress had described, and that the CBO had made that disclaimer quite clear, and when you take into account that the CBO’s forecasts couldn’t have taken into account subsequent Supreme Court decisions and other events they did about as well as anybody. If the current Republican administration and Republican administrations in Congress didn’t offer such helpful guidelines we can hardly blame those boring bureaucrats as the CBO.
Even without any helpful guidance from the Republicans the CBO has concluded that the first part of more or less Grand Old Party’s three-phase plan would lower federal deficits by a not insignificant $337 billion, given the nation’s poor fiscal health, and would eventually reduce the average American’s health insurance premiums by 10 percent, which by the now the average American would not consider an insignificant sum. The Republicans should be able make some political hay out of those numbers, but at the moment they’re busy discrediting everything the CBO says, and the eventual part will only play out long after the next election cycle and just before the president’s reelection race. The CBO’s past miscalculations were based on the garbage-in-garbage-out assumption of the Democrats who front-loaded their carefully planned Obamacare with early benefits and defrayed costs, while the CBO’s current calculations reflect the Republicans’ longstanding preference for paying up front, and although that makes for good policy we can’t fault the CBO if it makes for lousy politics. If the American public isn’t taking a longer range view of the situation, neither can we fault the CBO for that.
So far as we can tell from the CBO reports and everything else we read and hear and see this Obamacare thing has made things better for some people and worse for others and on the whole worse all around, and we’re quite sure this three-phased real and replacement with something that won’t be called Trumpcare might prove better but surely won’t be perfect. We’re holding out hope that nuns won’t be forced to pay for contraceptive coverage and monogamous married couples won’t have to fork out for sexually transmitted disease plans and teetotaling types aren’t hit up for alcoholism treatment, and that the the youngsters who only need catastrophic care can pay on the cheap, and that the daredevils can continue to defy the actuarial tables, but by now we have to admit that the benefits won’t come without costs, that those costs are actually figured in the long term that people rarely consider, and even those boring bureaucrats at the CBO can’t make any reliable predictions.
We always liked those old-fashined Republicans who used to acknowledge such uncertainties, but these days the party is represented by President Donald Trump and his campaign promises that everyone was going to be covered and the government would pay for it and premiums would go down and care would go up and everything would be great. He was never clear about the details, and being a big picture guy he seems to have left those details up to those Republican establishment guys he ran against, and they seem to have some old-fashioned ideas about paying up front and letting some number of Americans that might approach 24 million go without health insurance, and although there are philosophical arguments to made for that which the CBO can’t score he doesn’t seem able to make it, and this repeal and replace thing seems to be the very first time in his life that he doesn’t want his name on something.
As bad as Obamacare was we’ll still expect something better, but not matter what happens we won’t blame those boring boring bureaucrats at the CBO.

— Bud Norman