Apparently, Donald Marron testified to the Senate Budget Committee yesterday – and if the account I’m being told is true, I have a lot more respect for Senator Judd Gregg (Republican-New Hampshire) than I do for Mr. Marron. From a Tax Analyst account of the testimony:
Marron told the committee that the February 1 passage of a budget reconciliation bill in the House would chip about $5 billion from this year’s estimated $337 billion federal budget deficit. Other than that, Marron’s testimony was consistent with the themes he has echoed since the January 26 release of the latest CBO outlook: Over the next 10 years the deficit is projected to improve, the economy should remain strong, and challenges from entitlement programs loom. Marron said those themes and projections assume that mandatory spending programs will continue, that discretionary spending will grow at the rate of inflation, and that tax law will stay as is. In other words, said Budget Committee Chair Judd Gregg, R-N.H., the CBO’s baseline “takes into account things that probably aren’t going to happen.”
Kent Conrad (Democrat-North Dakota) also got in an important objection to Mr. Marron’s testimony:
Conrad dismissed the argument that the president’s tax cuts on capital gains and dividends would generate enough economic growth to offset the revenue loss they cause. Marron agreed: “Pro-growth tax cuts – reducing marginal rates, things that are focused on savings and investment – do help the economy grow, and therefore you get back something from that economic behavior that a purely static estimate wouldn’t account for. But the scenarios being considered do not come close to actually paying for themselves.”
What does President Bush continue to say? Oh yea, we need to give people their money back so they can CONSUME more. Which means national savings decline (yes, I’m assuming that this Congress will continue to only pretend to cut spending). So how does the acting director of the CBO get away with claiming that savings and investment will increase?