Krugman Is Wrong on Ryan and the CBO

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Last night, a few of us were discussing Paul Krugman's apparent erroneous belief that Paul Ryan should have gotten the CBO to score the revenue side of his plan, but didn't because he was attempting to put one over on the American people.  As far as I know, scoring tax bills is still the job of the Joint Committee on Taxation, not the CBO--but no one bothered to blog it because, as far as I can tell, we all assumed that we must be misreading Paul Krugman.

But no, I didn't misread; Krugman has two follow-up posts on the topic.  It seems as if he's really not aware that the JCT, not the CBO, typically handles the official scoring of tax legislation; "CBO" is not, in any of the policy circles I've run in, some sort of shorthand for the JCT (especially since there's--ahem!--some rivalry there).  It's also pretty clear that he hasn't asked Paul Ryan's office for the answer to any of these questions:

In other words, we think the tax part of the plan would leave revenue unchanged. But in that case, why not ask CBO to score the revenue, to see if it agrees? The answer given is that CBO refused to do an analysis beyond 10 years; OK, but why not at least have the 10-year analysis?

Oh, and about "adjustments can be easily made" -- when, exactly? Based on a careful look at the numbers? In that case, why tell the CBO not to do that careful look? After the tax cuts are enacted? On my planet, Republicans never consider it advisable to undo tax cuts once they're law. And notice the weasel phrase "to hit the revenue targets and maximize economic growth." In practice, this would surely mean no increase in rates, ever.

Then yesterday evening:

And so I don't care how Paul Ryan comes across. I look at how he has gone about selling his ideas, and I see an unscrupulous flimflammer.

Think about that CBO report: getting the CBO to score only the spending cuts, not the tax proposals, then taking credit for being a big deficit reducer, is simply sleazy. Not acknowledging that the zero nominal growth assumption, not the entitlement changes, is driving that 2020 score is also sleazy. And the whole pose of stern deficit hawk, when you know that there are real questions about whether your plan actually increases the deficit, is phoniness of a high order.

And about that Tax Policy Center report: it has been five months since that came out. Has Ryan tried, at all, to address the concerns the center raised? As far as I can tell, he's offered nothing but vague assurances of good intentions. Why should we believe him? Because he comes across as a nice guy? So did Bush.

Flimflamming is as flimflamming does. And Paul Ryan shows all the signs.

As a matter of fact, Paul Ryan is willing to work on the revenue side.  And he has explained this--on his web site, in February, when these complaints were first aired.  The short version:

1.  He asked the CBO to do a revenue analysis, and they declined on the grounds that it was the jurisdiction of the JCT.

2.  The JCT couldn't do analysis longer than ten years; period, so they asked for help from Treasury and some outside tax experts. 

My recollection is also that Paul Ryan couldn't get the JCT committee staff time anyway because they were a wee bit busy doing all the forecasts for health care reform, and the Roadmap is not going to pass barring some miracle.  But I was a wee bit busy with health care reform as well, so I could be wrong about that.

At any rate, the answer to Paul Krugman's question "Why didn't he ask" is that "He did, and they said no."

While I remain skeptical that anything like the Roadmap is politically possible, Paul Ryan is doing exactly what any sensible congressional sponsor with limited access to CBO time does; he's saying "Well, when this is getting close to being an actual bill, we'll work with the CBO and the JCT to tweak the tax rates in order to provide the amount of revenue we need."  This is entirely normal, and was, incidentally, how the health care bill that Krugman so loves got its excellent CBO score; as I recall, the nascent plans were deficit busters and cost a lot more money.  That's why the Tax Policy Center blog is defending Ryan.

Though I've only met him once, everything I've heard about Ryan indicates that he genuinely loves this stuff--if he could have more time with the CBO and JCT staff, he'd be in heaven.  I think it's absolutely fair to point out that his Roadmap would be a heroic political sell, and would probably be watered down in ways that would seriously weaken it.  I also think it is absolutely fair to point out that the tax rates needed to raise the necessary revenue would probably--not definitely; the TPC is not omniscient--be considerably less popular than what is outlined in the Roadmap.

But it is not correct to accuse Ryan of deliberate dishonesty; he asked the CBO to score it, and they turned him down.  Nor is it correct to imply that this is somehow out of the ordinary.  If you supported the health care plan, you supported the exact same process that Ryan is now proposing to use to tweak his proposal.  Were they all brazen liars because the tweakery turned out to be a lot harder than they'd hoped?

Update:  I emailed Ryan's people around noon to ask whether my recollection was correct that he was unable to get staff time from the JCT.  Within 30 minutes on a Saturday morning, I had emails from two staffers, one of whom was on vacation.  They affirmed that he asked the JCT for an analysis, and was turned down.  Which tells us a few things:  first, that Paul Ryan's people are exceptionally hard-working and responsive.  Second, that Paul Ryan did his best to get the revenue side as well as the spending side scored. And third, that Paul Krugman could easily have gotten answers to his questions if he had wanted them.


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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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