Republicans prepare to cook-the-books to justify tax cuts. Most likely, they will simply increase the deficit and then try (yet again) to use that as an excuse to cut social services.
Individual states repeatedly cooked-the-books on pension obligations assuming unrealistic investment returns creating huge unfunded obligations and credit downgrades (New Jersey’s pension problems contributed to that state having the second-lowest credit rating of any State, beaten only by Illinois which also has tremendous unfunded pension obligations.)
The Bush and Reagan tax cuts didn’t spur economic growth and Gov. Brownback has devastated the Kansas budget with tax cuts without growth (and surprise, surprise now proposes cuts in social services). Now the Republicans are preparing to do the same on the Federal level.
For example, last year the JCT estimated that Rep. Dave Camp’s (R-MI) tax bill could generate between $50 billion and $700 billion in additional revenue over a decade thanks to faster growth, but the bigger number included the assumption of large spending cuts that weren’t in his bill. The estimate also didn’t take into account any negative impacts that might arise from those steep cuts. As Chye-Ching Huang and Paul N. Van de Water at the Center for Budget and Policy Priorities write, “If highly optimistic economic and fiscal assumptions like these are included in official cost estimates but then fail to materialize, the result will be higher deficits and debt.”
This is particularly true because there’s little evidence that steep tax cuts will lead to higher economic growth, especially if they end up increasing the deficit. A recent paper from the Brookings Institution found that while tax cuts can have the impact of encouraging people to work, save, and invest, which can generate growth, “if the tax cuts are not financed by immediate spending cuts they will likely also result in an increased federal budget deficit.” For example, it doesn’t find evidence that the Bush tax cuts in 2001 and 2003 led to economic growth. Multiple studies have come to the same conclusion of President Regan’s 1986 tax cuts.