Policymakers May Double Down on Baseline Manipulation

Policymakers are considering enacting several new tax cuts on top of the Tax Cuts and Jobs Act (TCJA) extension in the forthcoming reconciliation bill, including no taxes on tips, Social Security benefits, and overtime pay. According to press reports, they may set these new policies to expire after only four years – presumably to reduce their budgetary score.  

It appears then that lawmakers in the Senate intend to use a “current policy” baseline to score the extension of parts of the TCJA – which implies that permanently extending a temporary policy has no fiscal impact – while simultaneously using a current law baseline to score their new tax cuts – which implies savings from making them temporary.  

This would be the first time lawmakers used a current policy baseline in a reconciliation bill and perhaps the only time they’ve used two different baseline conventions to score different parts of the same bill.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:  

This ad-hoc, inconsistent, manipulative, and disingenuous approach to budgeting is enough to make your head explode, and it is going to make the debt explode.  Congress isn’t even pretending to do honest budgeting at this point. The whole argument behind the current policy baseline was that temporary policies should be counted as permanent – and yet here they are trying to count some of them as temporary.

Any half-honest effort at adopting a current policy baseline would acknowledge that if policy extensions are costless, temporary policy enactments should be scored as permanent.

The problem with the use of a current policy baseline in this bill is that they are using it to extend provisions originally scored under current law back in 2017 to bring down their score. This two-step would allow policymakers to avoid ever acknowledging the deficit impact of the TCJA for 2026 and beyond.

Enacting more temporary policies and scoring them against current law in the same exact bill that scores extensions against current policy turns a gimmick into a double gimmick and allows them to play the current policy game all over again.

Lawmakers are telling on themselves – they don’t want a better baseline, they just want to mix and match whatever rules get them the most tax cuts with the fewest offsets.  

Ignoring the rules, changing the rules and making up the rules as you go along does not create the certainty we need from the tax code – it creates chaos and sets a dangerous precedent. The bond market has been warning us: adding more to our already dangerously high level of borrowing could cause the US huge problems.  

And in the process, they’re creating even more uncertainty in the tax code by enacting even more policies that will either expire or have to be extended in a few years.

This hypocrisy simply exposes the current policy gimmick for what it is: a blatant attempt to add to the debt and fool the American people. With a national debt rapidly approaching an all-time high, we cannot afford to have our policymakers playing dishonest games with the federal budget.  

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For more information, please contact Matt Klucher, Assistant Director of Media Relations, at klucher@crfb.org. 

You can see more of our recent work on the Fiscal Year 2025 budget resolution, the forthcoming reconciliation bill, and baseline gimmicks here.