NY-22 Minute: Tenney Claims Tax Cuts Have Already Paid for Themselves By Luke Perry
Yesterday morning Claudia Tenney stated The Tax Cuts and Jobs Act has “already been paid for in six months.” Tenney was responding to a question about national debt on Talk of the Town (WUTR radio-Utica) surrounding Ivanka Trump’s recent visit to NY-22. A piece by Patrick Lohmann in Syracuse.com discussed how Suit-Kote, a company visited by Ms. Trump, regularly displays a large banner with the national debt.
Photo by Syracuse.com
“Let me talk about what is not being talked about at Syracuse.com and in liberal, left leaning media,” Tenney replied, “we have already paid for the tax cuts with the growth in the economy, which is not been talked about. The tax cuts have already been paid for in six months.” (9:40 mark) Tenney believes the economy is in “overdrive” and “the so-called deficit” has already been “eclipsed.”
“The debt is very important,” Tenney stated, “and we’re trying to work on eliminating that debt.” Tenney believes the best way to do that is “unleash our economy” by continuing deregulation and tax cuts.
Photo by Natasha Vaughn
After a commercial break, the hosts asked for clarification and the basis of Tenney’s claim the tax cut was already paid for. Tenney responded:
“The growth in the economy is already exceeded 1.5 trillion since the tax cuts were put in place. So that is already, so when we’re when we’re concerned about a deficit being created or a debt being created, the economy has already grown in excess of 1.5 trillion. So the worry about ‘oh geeze, we’re going to be on a low, you know, the deficit decline, we’re going to be at the Obama rate at less than two percent,’ we’re already, we’re seeing the economy roaring, we may even get to four percent at the end of this quarter, and their predicting possibly even over five percent by the end of the year. The growth in the GDP is going to, as predicted, the growth in the GDP, the growth in the economy, is going to eclipse and move past what the deficit would be caused by the tax cuts.”
Co-host Mark Wolber asked if the tax cuts have generated enough tax revenue to offset the loss of revenue resulting from the government collecting less taxes. “Again,” Tenney responded, “the GNP has grown to the level where the concern over increasing the debt and deficit over the tax cuts has been eclipsed.”
Host Jay Aiello concluded the conversation on debt, stating “we haven’t heard that yet so we wanted you to clarify.” “Well, you better, like, I suggest you read the Wall Street Journal," Tenney replied, "that if you read the Wall Street Journal, and The Economist, and any of the other publications, Business Insider, a number of those, they’re all predicting that. You’re not going to find that in the Observer Dispatch and left leaning publications that are committed, you know, to eliminating the Republicans in power.” (15:30 mark)
In December of 2017, The Economist wrote “Republicans’ claim to be the party of balanced budgets is now laughable.” The “frenzied passage” of the Tax Cuts and Jobs Act “revealed the insincerity of the party’s fiscal moralizing. Republicans in Congress do not oppose government borrowing when it suits them.” The tax cut was projected by "budget scorekeepers" to recoup one-third of the $1.5 trillion cost. “This undermined the absurd claim,” the article states, “made by the Republican leadership and the Trump administration that tax cuts would pay for themselves in full. No serious economist ever thought this credible.”
In February of 2018, The Economist wrote “in 2019 and 2020 the deficit is likely to rise to nearly 6 percent of GDP, the largest, outside of times of economic crisis, since the second world war. In his first term, Donald Trump’s deficits will be nearly as large, on average, as those run by Barack Obama during his presidency,” which is “impressive given that Mr. Obama faced the worst economic downturn since the Depression.”
In April of 2018, The Wall Street Journal reported the deficit was $599.71 billion in October through March, based on Treasury Department figures, “14% higher than the deficit during the same period a year earlier.” Reporter Sarah Chaney explained “the revenue drop may reflect the package of corporate and individual tax cuts that Congress enacted in late 2017. In March, revenue from individual tax withholding dropped 2% from a year earlier, and gross corporate tax revenue dropped 41% from March 2017.”
Last month, Chaney documented how “the U.S. government’s budget deficit widened in the first eight months of its fiscal year as spending rose faster than revenues compared with the same period a year earlier.” A recent Treasury Department report “showed the federal budget deficit was $146.80 billion in May, 66 percent wider than the same month a year earlier.”
Luke Perry (@PolSciLukePerry) is Chair and Professor of Government at Utica College.
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