Portman defends GOP tax cuts
Sen. Rob Portman insisted Thursday that there’s nothing inconsistent about slamming Obama-era deficits in the depths of recession and then, in an economy near full employment, voting for a Republican tax bill that nonpartisan scorekeepers say will add at least $1 trillion to the federal debt.
Portman, an Ohio Republican, was in Columbus to tour Wolf Metals, a steel-fabricating firm whose owner said the Republican tax bill signed last month by President Donald Trump is a godsend to his business.
“It’s going to keep me competitive and keep my guys working,” owner Jim Wolf said on the floor of the West Mound Street business he started in 1972.
Wolf said the bill, which cut business and individual taxes, made it “a no-brainer” to invest in a new, $500,000 piece of equipment.
The visit was one of several Portman is making to Ohio businesses to praise the positive effects of the tax package. On Thursday, Nationwide said it will give employees a $1,000 bonus and increase its 401(k) matching contribution as a consequence of the package.
And nationally, Republican-leaning groups are implementing a multimillion-dollar effort to reverse public sentiment on the unpopular tax plan.
At Camp David on Friday, Trump said the tax package, which has been criticized as heavily slanted toward the very wealthy, is already paying off only two weeks after he signed it.
“The tax cuts are really kicking in, far beyond what anyone thought,” Trump said. “Numerous companies have today come out and announced that have made big payments to their employees, something that nobody really had in mind. So we’re very honored by it. But the market is good. The jobs reports were very good, and we think they’re going to get really good over the next couple of months.”
At Wolf Metals, however, it was unclear how much of the investment Portman was touting actually was due to the tax bill, and how much was due to an already-strong economy.
“Our business is going berserk right now,” Wolf said. “We can’t keep up.”
He said he probably would have invested in new equipment without the tax cut, but less money going out in taxes made the decision much easier.
Talking to the company’s 18 employees, Portman was asked whether the tax package would increase the deficit. Calling himself a “deficit hawk,” Portman said the tax package would so stimulate the economy that new tax revenue would exceed the sum lost from reduced tax rates.
However, a Washington Post fact check found that while tax cuts can provide economic stimulus, no federal tax cut since the 1920s has paid for itself.
In a press release Friday, the bipartisan Committee for a Responsible Federal Budget predicted that won’t be the case with this one, either.
The Joint Committee on Taxation’s “analysis concludes the bill will have a modest impact on growth in the near term but almost no effect after a decade,” the budget group said. “After accounting for this near-term growth, the $1.46 trillion bill will still cost $1.07 trillion. This is consistent with estimates of the previous iterations of the House and Senate bills and inconsistent with claims that the bill will pay for itself or substantially accelerate sustained long-term growth.”
When Barack Obama was president, the group wasn’t shy about slamming the Democrat for deficit spending, either.
And back then, Portman agreed with those criticisms.
On March 18, 2011, he issued a statement about Obama’s 2012 budget: “This latest report paints an even bleaker picture of President Obama’s budget proposal and further demonstrates that lack of leadership from the White House on the country’s unprecedented budget problems.”
Asked if it’s inconsistent to have made similar criticisms of the 2009 stimulus package but support the GOP tax-cut bill, Portman said it’s not.
“Because back then they were talking about tax increases in a stimulus plan that I didn’t think was going to work,” Portman said. “Unfortunately, I was right.”
But Douglas Elmendorf, then the director of the nonpartisan Congressional Budget Office, in 2012 said his agency had concluded the stimulus package “was not a failed program. Our position is that it created higher output and employment than would have occurred without it.”
In terms of taxes, the stimulus bill was a mix — cuts worth $288 billion and an increase of $400 billion on individuals with incomes of $200,000 or more.
Portman said the GOP tax bill is a different animal altogether.
“This is a policy that I believe in my heart is going to result in economic growth, and we’re seeing it,” he said.