Even before Republicans had written a bill, Treasury Secretary Steve Mnuchin insisted that their tax cuts would more than cover their own cost with economic growth. “Not only will this tax plan pay for itself, but it will pay down debt,” Mnuchin said in September. Despite this being comically implausible, Mnuchin promised that a crack team of analysts at his department was already looking at the economic effects of various proposals. The bill would be scored by the Treasury department, he said. What’s more, they would show their work. “We have over 100 people working on this, and it will be a completely transparent process,” he told CNBC’s John Harwood at one point.
And yet, as the tax talks advanced, no economic analysis emerged from Treasury. Asked in November if the department was ever going to release its models to back up its claims, Mnuchin bizarrely said it already had, while once again promising transparency.
Well, the New York Times did some digging, and it turns out there was never any modeling to begin with. From Thursday’s piece:
Those inside Treasury’s Office of Tax Policy, which Mr. Mnuchin has credited with running the models, say they have been largely shut out of the process and are not working on the type of detailed analysis that he has mentioned. An economist at the Office of Tax Analysis, who spoke on the condition of anonymity so as not to jeopardize his job, said Treasury had not released a “dynamic” analysis showing that the tax plan would be paid for with economic growth because one did not exist.
Instead of conducting full analyses of tax proposals, staff members have been running numbers on individual provisions or policy ideas, like lowering the tax rate on so-called pass-through businesses and figuring out how many family farms would benefit from the repeal of the estate tax. Activity has picked up more recently as Treasury has sought to provide technical assistance to the Joint Committee on Taxation and the Congressional Budget Office for their estimates.
None of this is particularly shocking. The Treasury Department is full of professionals who take a mainstream approach to economics, and who likely weren’t going to bolster the administration’s wild claims. Moreover, neither the White House nor the Republican Party writ large particularly care what egghead Ph.D.s say about their tax plans, unless those experts happen to be supportive of radically slashing rates on business owners and corporations. GOP politicians are operating in the world of ideology and convenient fantasies that will please their donors. You didn’t need an investigative report to figure that part out (though I’m glad we got one).
But here’s the thing. Mnuchin’s shameless posturing about the administration’s tax plans—at one point he even promised there would be “no absolute tax cut for the upper class,” which was a laugher given every proposal Trump had ever backed—points to a deeper problem. The man regularly says things that just aren’t true. He’s been claiming that there was an analysis underway. There wasn’t. And while a lot of people may roll their eyes about that in the context of a wonky tax debate, his complete lack of credibility is going to be a problem if we ever run into a serious economic or financial crisis. Just ask yourself: If the markets were crashing and Steve Mnuchin held a press conference assuring everybody that the administration had an action plan in the works, would you believe him? His complete detachment from reality has mostly been an infuriating sideshow during this tax push. If stuff ever really hits the fan, though, his reputation for fibbing is going to make things even worse. Just like someone else we know.