Why has it taken the Democrats nearly a week to question the costs affiliated with President Bush’s trip to the USS Lincoln? I posted about it last week at Presidential Finances! It is now estimated that President Bush’s trip to the USS Lincoln (a ship that was 30 miles offshore and docked the next day in San Diego) cost the taxpayers nearly $1 million dollars to pay for “an extra day of air patrols, keeping the crew at sea, presidential security and flying Bush to the ship.”

From A Taxing Blog:
The Bush Tax Cut and National Saving
It’s been out for a few months, but I just came across Berkeley Econprof Alan Auerbach’s paper on the economic effects of the 2001 tax cuts, “The Bush Tax Cut and National Saving. Auerbach runs the evidence through two models and concludes that “dynamic scoring has a significant impact on estimated revenue losses, but that the tax cut’s impact on national saving is still negative in the long run.”

Tax Cuts and Budget Scoring
Reader Dick Riley emailed in to grumble (his words, not mine) about the “the enactment of tax cuts on a “temporary” basis (i.e., typically with some sunset a few years down the road) for the sole purpose of artificially lowering the calculated revenue cost over the 5-year or 10-year scoring window, with the sponsors knowing (or at least planning) that the provisions will be continually re-enacted.”

Dick points out that this is awfully cynical and a blatant gaming of the system, and of course he’s right.

Who gets hurt: the public, of course. Those inside-the-beltway don’t really get hurt. The scoring conventions are like accounting conventions — if everyone understands the game, and everyone plays by the same rules (i.e. Dems and Republicans alike), then insiders with a deep understanding are not fooled by artificial numbers.

But it does hurt the public. The object of scoring tax cuts should be to give voters an understanding of the true costs of competing proposals. Making an insincere promise to repeal a tax cut is deceptive to voters, who just might think that a $350 billion tax cut is really that, and not a $1 trillion cut in disguise.

Politicians like temporary tax cuts because they know it is easier to extend existing tax relief than to initiate a new tax cut. And so they know that the sunset repeal of a tax, in real politics terms, is unlikely to ever come.

The public is hurt by more than just the deception factor. The public also loses because temporary measures add to the complexity of the tax code and confuse legitimate tax planning.

But since these negative externalities (i.e. indirect bad effects caused by the legislation) are spread across the public, no one has a very strong incentive to lobby against the temporary aspect of the legislation.

The solution, I think, is to change the budget scoring rules. Changes which are likely to be permanent should be treated as such for scoring purposes. Of course, I’d need to do more research on the tax legislative process before coming up with appropriate language. I suspect that, like accounting conventions, scoring conventions need to move away from bright-line rules (which are easy to game) and towards principles (which are vaguer and harder to apply but also harder to cheat).
(emphasis in original)

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