Once Congress abandons consistency and transparency in baseline projections, there’s no going back.
As Congress hurtles toward its next major fiscal showdown — the expiration of key TCJA provisions — lawmakers face a critical choice: uphold budget discipline with a current law baseline or use a current policy baseline to mask the true cost of tax extensions. News reports emerging this week indicate that Republicans are moving forward with a plan to sidestep the Senate Parliamentarian to assume away the true deficit impacts of tax cut extensions through a current policy baseline.
The appeal of using current policy is obvious: Republicans get their tax cuts, fiscal hawks get to claim even larger deficit reduction, and everyone walks away declaring victory. But a deal that trades away baseline integrity for a near-term win on tax cuts could prove to be a costly mistake. It would set a disastrous precedent making it even harder to maintain fiscal discipline in the future. Congress already plays too many budget scoring games that contribute to our unsustainable debt. Making it easier to hide costs with baseline tricks means blindfolding the very people we need to chart a path to a stronger fiscal future.
Changing the score doesn’t change the actual deficit impact
In the next few decades, the fiscal consequences of ignoring the cost would be hard to ignore. Thanks to a letter from Rep. David Schweikert (R‑AZ), who referred to the notion of a current policy baseline as “intellectually a fraud,” the Congressional Budget Office projected the national debt under two scenarios: 1) if TCJA were extended without offsets and 2) if TCJA were extended without offsets in a higher interest rate environment. These prompts demonstrate the long-term debt environment no matter what baseline you use, and the results are staggering.
Using one approach over another does nothing to change how much we spend, how much revenue comes in, and how much debt we need to float to cover the difference between the two. Utilizing a current policy baseline is the equivalent of telling your bathroom scale that certain calories don’t count: it might make justifying excess easier, but it does not change the underlying measurement on which one’s health depends.
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