As we move this debate forward, it is critical that policymakers have clarity on the focus on additional deficit reduction efforts by the Joint Committee on Deficit Reduction created by this new law. Unfortunately, in a blog post yesterday at whitehouse.gov, Gene Sperling, one of the President’s top economic advisers, advanced a misguided interpretation of the mandate given to this newly-created committee. Despite anemic economic growth and a painful lack of job creation, the White House appears eager to overcome bipartisan opposition to their efforts to impose tax increases on job creators.
Sperling wrote that the Budget Control Act does not “preclude [the new Joint Congressional Committee tasked with deficit reduction] from requesting [Congressional Budget Office] estimates based on alternative baselines and using those estimates for purposes of the certifying the deficit reduction achieved in the Committee.”
In fact, the legislation explicitly instructs the Committee to use CBO projections and explicitly references current law requirements to estimate how the Committee’s proposal “will affect the levels of such budget authority, budget outlays, revenues, or tax expenditures under existing law” (Section 401(b)(5)(D)(ii) of the Budget Control Act & Section 308(a)(1)(B) of the Congressional Budget Act).
The distinction is very important: Scoring the Committee’s deficit-reduction proposals using alternative baselines, as the White House would prefer, would allow it to propose the kind of large, job-destroying tax hikes that the President tried so hard to get during this round of negotiations. By contrast, scoring the Committee’s deficit-reduction proposals using existing law, which already assumes tax increases, would create significant structural impediments to raising taxes.
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