Do Tax Cuts Receive Unfair Treatment Under the Baseline Rules?
Some argue that the baseline rules treat expiring tax provisions unfairly compared to how expiring entitlement programs are handled in the baseline. They point out that if a new entitlement program is authorized for a few years and needs to be extended, the cost of continuing it is assumed in the baseline, and legislation to extend the program is considered to have no cost. In its budget documents, the Administration makes this argument, asserting that its proposed change to the baseline rules for the expiring 2001 and 2003 tax cuts would merely conform their treatment under the baseline to the treatment already accorded to entitlement programs. But this argument is disingenuous. It glosses over a critical fact. If legislation to create an entitlement is written so that the entitlement sunsets after a few years, CBO still counts the full cost of that entitlement proposal for every year of the next ten years, as if the sunset would not occur. As a result, Congress cannot artificially lo
