Quigley Questions Mnuchin About GOP Tax Cuts Exploding National Deficit
Today, U.S. Representative Mike Quigley (IL-05), Chair of the Subcommittee on Financial Services and General Government, questioned Treasury Secretary Steve Mnuchin during a hearing on the Department of the Treasury’s Fiscal Year 2021 budget request. Quigley’s questions focused on the exorbitant cost of tax reform and the effectiveness of the Russian sanctions for election interference in light of their continued inference.
Quigley pointed out that the enacted Tax Cuts and Jobs Act of 2017, will increase the deficit by $1.9 trillion over ten years despite Republicans, including Mnuchin, claiming that the bill would pay for itself. Secretary Mnuchin again repeated this disingenuous narrative, which is in direct contrast to what economists across the political spectrum and independent analyses by the Tax Policy Center, Tax Foundation, the Peter G. Peterson Foundation, and the Center for a Responsible Budget have found. Their definitive conclusion has been that tax reform is not deficit-neutral.
Video of Quigley’s questioning is available here and a transcript is provided below.
QUIGLEY: The insight you have that these institutions and the CBO doesn't have as to why you disagree with such a wide-ranging number.
MNUCHIN: Well here's the good news, this is just math and ultimately eight years from now and I say eight years because we're two years in, it will be very clear what these numbers are. I think that for the first two years, we're right on our internal projections. Every year we go by, we will have more certainty so, yes, I stand behind my projection. It's just math. If we increase the growth rate by a certain amount that will generate more revenue, which will pay for the tax cuts. As I said, I look forward to coming back to this committee down the road.
QUIGLEY: Have you analyzed the analysis of CBO and all of these other institutes?
MNUCHIN: We have and it's relatively simple. It's just a different...
QUIGLEY: How are they wrong and you're right?
MNUCHIN: Again, it's math. So based upon ...
QUIGLEY: I get math, but which math?
MNUCHIN: Depending on what you think the growth rate will be, what the addition of growth is.
QUIGLEY: And I respect that, you're saying that it's all the difference in growth rate.
QUIGLEY: Nothing to do with the loss of the revenues?
MNUCHIN: No, I mean as you said, let's put aside spending.
QUIGLEY: Well they took it into consideration obviously.
MNUCHIN: Again, what I've said, I just want to be clear. I've always said the Tax Act will pay for the tax cuts. There was additional spending increases as result of both military spending and non-military spending that had nothing to do with the tax cuts. So, when people talk about the current deficit, let me just make the comment that a huge component of the current deficit is additional spending. The other part of the current deficit is focused on, when we calculate the tax cuts over the 10 years, we've always said that the incentives were there are tax cuts in the first 5 years and then significant additions in tax revenues in the next 5 years. So again, I would just say, it's not a question of I'm right and someone else is wrong, time will tell if indeed we get the growth that I think we will get, this will more than pay for itself.
QUIGLEY: Obviously, extraordinary room for disagreement on something of extraordinary quality in nature. Mr. Graves.