Late last month, the Congressional Research Service released a report entitled “The Economic Effects of the 2017 Tax Revision: Preliminary Observations.” “On the whole, the growth effects tend to show a relatively small (if any) first-year effect on the economy,” the CRS found, adding that “Although examining the growth rates cannot indicate the effects of the tax cut on GDP, it does tend to rule out very large effects in the near term.”
A number of media outlets, as could be expected, went apoplectic, declaring that the Trump tax cuts have nothing to do with the booming economy, and thus also won’t make up any of the revenue lost. With the supply-side tax cuts of Calvin Coolidge, John F. Kennedy, Ronald Reagan
The report gained instant credibility with the press because the CRS operates as Congress’ in-house think tank, allegedly staffed by experts who live in a pristine environment above the political fray.
But while CRS employees might act as apolitical wonks in their day jobs, some among their number
Follow the Money
When the establishment media refer to the CRS they usually precede it with the adjective “non-partisan.” But is it? You can easily check for yourself.
CampaignMoney.com lists some 89 records of political contributions by those identifying as CRS employees, totaling $5,858 for the 2016 election year.
Political and economic analyst Eugene Boyd gave $750 to Philadelphia Democratic Rep. Dwight Evans’ campaign. Section head Douglas Grob gave a total of $500 to Hillary Clinton’s presidential campaign organizations, plus $150 to longtime Democratic congressman and noted congressional fundraiser Chris Van Hollen’s successful 2016 Senate campaign. Sen. Van Hollen is now chairman of the Democratic Senatorial Campaign Committee.
William Kandel, a CRS immigration policy analyst since 2010, gave $500 to the Democratic Congressional Campaign Committee, which Van Hollen ran when he was a House member. Curiously, Federal Election Commission records show that all his 2018 contributions to leftist organizations like the Progressive Turnout Project, ActBlue, It Starts Today, and the League of Conservation Voters Action Fund identify him not as being with the CRS but having as his employer either “GOVT” or “US GOVERNMENT” and his occupation as either “ANALYST” or “RESEARCH.”
Linda Moore, a telecommunications policy specialist, gave $350 to Hillary. Agriculture and biofuel specialist Randy Schnepf gave close to $800 to Hillary, plus modest donations to the Democratic National Committee, his local county and state Democratic Party organizations, and the Democrat who ran unsuccessfully for Congress in his district of residence in 2016.
Legislative attorney Alexandra Wyatt gave more than $800 to Hillary and $325 to the DSCC in 36 separate transactions in 2016. The Federal Election Commission lists some 8,237 contributions from Wyatt for 2017 and 2018 alone. Oddly, 7,972 of them are for two cents to Democratic campaign finance attorney and technology specialist Jonathan Zucker’s new It Starts Today political action committee, making for a modest total just shy of $160. There is a similarly bizarre plethora of $1.98 and 46-cent donations from Wyatt to the Swing Left PAC. Records show she also gave over $1,700 to Act Blue, the big progressive Internet PAC that drove much of Bernie Sanders’ fundraising success in 2016.
PACs like Swing Left and It Starts Today aren’t just partisan; they’re out to transform America. According to the American Prospect, “Zucker predicts that It Starts Today will help overall turnout. He says Democrats can make inroads in the kinds of small, rural communities that have been sending Republicans to Washington, and where Democrats have failed to field challengers for years.”
Zucker believes: “In races where Democrats don’t compete … conservatism turns into fanaticism, and right-wing voters become entrenched right-wing radicals, because voices making progressive counterarguments have been absent for too long.”
Other CRS operatives are listed as employees of the Library of Congress, of which the CRS is part. These include Jonathan Medalia, who has written numerous CRS nuclear weapons analyses, CampaignMoney.com shows he gave $125 to ActBlue and $825 to Van Hollen in 2016, CRS banking analyst Rena Miller gave $554 to Hillary. Economist Nonna Noto gave $500 to the DSCC. Foreign policy analyst Jonathan Sanford gave $200 to the DCCC. Middle East specialist Jeremy Sharp gave $250 to Hillary. Immigration policy senior analyst Alison Siskin gave $1,750 to Hillary. Foreign policy analyst Mark Sullivan gave $300 to Hillary.
That brings the total to over $10,000. Apparently the only CRS employee who gave to Republicans in 2016 was American national government specialist Tom Neale, who gave $400 to Pennsylvania Sen. Pat Toomey and $250 to defeated New Hampshire Sen. Kelly Ayotte.
These are not the actions of some sort of congressional equivalent of certified public accountants “providing comprehensive and reliable legislative research and analysis” that’s “objective” and “authoritative,” as CRS’s mission statement puts it.
Moreover, criticism of the CRS’s claimed lack of bias is nothing new, and not limited to economic policy.
Trustworthy on Trump’s Tax Cuts?
All of which should be taken into account when considering the CRS’s assessment of the President’s tax cuts.
The authors of the Trump tax cut report are identified as 50-year CRS veteran Jane Gravelle, Senior Specialist in Economic Policy, and Donald Marples, Specialist in Public Finance. An indication of the lack of exactitude of this whole business can be found in an interview Gravelle gave an American Bar Association tax publication in 2015. She was asked if cuts in the tax rates on capital gains and dividends during the George W. Bush administration lost “more revenue than predicted.”
Gravelle’s response, more than six years after Bush left office, was: “I really have not looked closely at capital gains since then and you cannot always tell just by looking at a time series how much revenue has changed … I really think when you cut the capital gains tax you lost revenue, definitely you lost it with the reduced taxation of dividends, which do not have that kind of realizations response. So I think those preferences lost revenue.”
Think? The record shows the estimators either got it right or got it wrong, by a little or by a lot. Government econometric analysts enjoy the aura of mathematician, but a mathematician doesn’t “really think” what two times two equals. Gravelle has been employed by U.S. taxpayers at the CRS since 1969, and the notion that someone who scrutinizes revenue estimates for a living has “not looked closely” at whether they got it right or not is disingenuous at best.
Tax Cuts Work
Taxation is but one ingredient in a stew with fiscal, regulatory and monetary components, all of which affect GDP and employment, so in quantifying the effects of changes in any of these policies the
As much as Marxists imagine the rich empowered to buy more mink coats and Rolls Royces, they’re already able to afford the luxuries they desire; what’s left over after their shopping sprees gets invested. Tax cuts add to that wealth available to invest – and engineer job growth – rather than adding to purchases of more baubles.
Curtis Dubay, then of the Heritage Foundation, noted, “when it comes to energy consumption, carbon production, cigarette smoking, and countless other liberal bugaboos, their answer is always the same: raise taxes on the behavior to cause people to cut back on it. Liberals can’t seem to apply the straightforward converse of this logic to economic growth, for some reason.”
The CRS does much good work, just as the various think tanks of differing philosophical shades outside government do. Like them, it is neither apolitical nor infallible. And it shouldn’t pretend to be, or be viewed by the press and politicians as immune from scrutiny.
Perhaps a dose of increased political diversity in the composition of CRS staff would bring with it some realistic analysis of the growth effects of tax reduction, acknowledging the historical record — and reduce in number the agency’s endorsements of the talking points of the party to which so very many CRS analysts write checks.
Editor’s note: This has been updated to more accurately reflect Curtis Dubay’s affiliation when he wrote his article on the CRS.
Issues & Insights is a new site formed by the seasoned journalists behind the legendary IBD Editorials page. We’re just getting started, and we’ll be adding new features as time permits. We’re doing this on a voluntary basis because we believe the nation needs the kind of cogent, rational, data-driven, fact-based commentary that we can provide.
Be sure to tell all your friends! And if you’d like to make a contribution to support our effort, feel free to click the Tip Jar over on the right.
