A Conservative Tax Analyst On The GOP Tax Plan
SCOTT SIMON, HOST:
The Republican effort to change the federal tax code continues in the Senate after the House passed their version. Congressional Republicans have argued that the tax cuts in their plan will spur enough economic growth and that revenue will allow the cuts to pay for themselves. But a new survey finds that 38 of the country's top economic experts are unanimous in saying the cuts would not pay for themselves and would increase the national debt. That's a problem for many Republicans, including Bob Corker of Tennessee.
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BOB CORKER: Unless this bill reduces deficits and does not add to deficits with reasonable and responsible growth models, I don't have any interest in it.
SIMON: We're joined now by Scott Greenberg. He's a senior analyst at the conservative Tax Foundation.
Mr. Greenberg, thanks so much for being with us.
SCOTT GREENBERG: Thanks for having me.
SIMON: Isn't it an article of conservative faith that tax cuts promote more spending - that creates growth, jobs and, ultimately, tax revenue?
GREENBERG: I wouldn't say that's the article of conservative faith. I think that a number of conservatives believe that an appropriately designed tax bill could increase incentives for households and businesses to work and invest and that this could have a positive effect on the economy.
SIMON: Well, what do you think of the tax bill that you've seen?
GREENBERG: I think that there are a number of elements in both the House and Senate bills that could encourage both work and investment on the parts of households and businesses. The lower corporate rate, the 20 percent, will reduce the cost of investing in the United States. And we should expect a larger U.S. economy because of that.
SIMON: But you have a concern about deficits at the same time?
GREENBERG: Absolutely. Even when accounting for the increased economic growth under the Senate plan, there's reason to believe that it would indeed add to federal deficits.
SIMON: And - I'm sorry if this sounds naive - but what's your concern about adding to the federal deficit? Because it does seem that a lot of Republicans, if I might put it this way, have gotten over that in the past couple of decades.
GREENBERG: That's an interesting point. After all, there are two hypothesized downsides of adding to the federal deficit. The first downside is that because the government would need to borrow more, that could crowd out private savings and investment. And the second concern is that it could undermine the credit of the United States in the long run. It might be that these effects are not actually so serious. After all, we haven't seen so much evidence of crowding out from federal debts over the last decade or so.
And there might not be so much reason to worry about the stability of the United States' credit in the long run, given that many people appear to continue to be very interested in U.S. debt as an investment. That being said, a number of Republicans do continue to be worried about the size of the U.S. debt. And as a result, it's worth paying attention to that number in order to see whether a bill will be able to assuage their concerns or not.
SIMON: Mr. Greenberg, do you, at this moment, foresee a tax bill passing?
GREENBERG: I think it's a very difficult road ahead of Republicans in Congress. There are a number of senators that have raised concerns about the Senate tax bill. Senator Corker, who was quoted earlier, as well as Senators Flake and Lankford have raised concerns that the tax plan would increase the U.S. debt too much. Meanwhile, other senators, like Senator Collins, have expressed concern that the Senate bill repeals the individual mandate, which is a health care provision that penalizes people for not buying health insurance. Overall, there's a very thin majority for Republicans in the Senate. And as a result, that makes passage of this bill a very difficult prospect.
SIMON: Scott Greenberg is a senior analyst at the conservative Tax Foundation. Thanks so much for being with us, sir.
GREENBERG: Thanks so much for having me. Transcript provided by NPR, Copyright NPR.