Budget Adjustments and Tax Cuts Spark Debate

A former state lawmaker from New York recently challenged Neera Tanden, a former civil servant under the Biden administration, during a discussion. The debate revolved around the 2017 tax cuts enacted by President Donald Trump, which were characterized by Borelli as benefiting “wealthy billionaires.”

The Senate is currently reviewing a budget adjustment bill aimed at making these tax cuts permanent. This legislation proposes to eliminate tip taxes and reduce spending by more than $1.6 trillion. During the conversation on “CNN Newsnight,” Joe Borelli, a former Republican Congressman, took note of Tanden’s past assertions about the 2017 tax legislation, questioning the accuracy of forecasts provided by the Congressional Budget Office (CBO).

Borelli remarked, “This mirrors many discussions, including those from the CBO, regarding the initial tax cuts in 2017, right?”

He went on to say, “Essentially, I believe the CBO was underestimating growth after that. They really did.” Tanden and Borelli examined the CBO’s estimates before bringing up the 2017 projections made by Tanden.

“You have no basis to believe that 2017 would lead to significant growth or an increase in tax revenue. You were mistaken,” Borelli asserted.

Back in 2017, Tanden had expressed skepticism about whether economic growth from lower tax rates could cover the costs, stating, “The idea that economic growth will pay for these tax cuts feels like the usual story we hear from the current administration.”

Borelli’s comments followed remarks by Michael Purvis, chief market strategist, who referred to GDP figures from 2019. Borelli noted, “That’s why I averaged out to about 200 billion people a year, which is essentially accurate. In 2022, that number was undervalued at 800 billion annually; the CBO has a pattern of errors.”

After Tanden’s comments were brought up again, Borelli recounted another statement she had made regarding the 2017 tax cuts. He stated, “You claimed in 2017 that this tax cut would mainly benefit wealthy billionaires and would be funded by the middle class. However, poverty rates have hit the lowest level in fifty years, and families earning under $100,000 received a 16% tax reduction.”

Tanden reiterated her views from 2017, maintaining that Trump’s tax cuts favored corporations and the wealthy. Interestingly, this ongoing debate highlights contrasting perspectives on the impacts of these tax reforms.