On Saturday, I wrote a Swampland post about the difference between the Congressional Budget Office score of the House stimulus bill and the original goals for the plan proposed by President Obama’s team. (While Obama had proposed $300 billion in tax cuts, the CBO said the House plan only contained $182 billion in tax cuts.) On Monday, at the press briefing, I asked White House Spokesman Robert Gibbs about this disparity.
“I don’t think what ultimately passed was markedly different than what the president proposed,” Gibbs said, in response. “The figures I saw today are different than what you mentioned in CBO, but that’s not surprising. We’ve kind of had a little bit of a running debate with some of the figures that have been birthed by the CBO.”
The biggest issue here, it turns out, is one of accounting. For example, the CBO does not count as tax measures refunds like the $45.5 billion “Making Work Pay” refundable tax credit ($500 per individual, $1,000 per couple), even though that provision comes out of the tax code. The money is considered an “outlay” of money. The Obama Administration, and the congressional Joint Committee On Taxation, do count that money as a tax cut. (For an explanation of this, see footnote 3, in this JCT report (pdf), which sets the total tax effect of the House bill at $304 billion.) This means that comparing the CBO numbers to the initial Obama tax goals is like comparing apples to oranges–it don’t work. I will correct Saturday’s Swampland post to make this clear.
In the meantime, the public is left to sort through several different accountings of the stimulus package. (Disputes between the White House, the JCT and the more orthodox and non-partisan CBO are nothing new.) Republicans opposing the bill will likely cite the CBO numbers in estimating the tax cut, and the Democrats supporting it will use the JCT numbers, or the numbers produced by the White House’s own Office of Management and Budget. Whether or not a one-time gift of money through the tax code is an expense or a tax cut is, it must be said, sort of a judgement call in the end. Either way, it’s giving away money that the government must borrow in an attempt to reinflate a withering economy.