A team of economic heavy-hitters wants to shake up how Washington thinks about the budget, just in time for next year’s tax reform brawl. MM has a first look at what they’re launching today. The new initiative, the Budget Lab at Yale, is an attempt to widen the aperture of how policymakers weigh proposals that could have a major impact on the government’s finances. It aims to go beyond what existing go-to sources like the Congressional Budget Office and the Joint Committee on Taxation can offer. Spearheading the nonpartisan research center are Budget Lab president Natasha Sarin, a Yale Law School professor who served as a counselor to Treasury Secretary Janet Yellen; chief economist Danny Yagan, an associate professor of economics at UC Berkeley who was chief economist at OMB; and executive director Martha Gimbel, a former senior adviser at the White House Council of Economic Advisers. Their team also includes former CEA chief economist Ernie Tedeschi, Penn Wharton Budget Model and Treasury alum Rich Prisinzano, former PWBM and IMF analyst John Ricco and Harris Eppsteiner, formerly of the CEA. The Budget Lab’s pitch is that it will look at issues not included in current budget policy assessment methods, in an attempt to account for a broader scope of costs and returns. Priority issues include the child tax credit, tax cuts, paid family leave, deficit reduction and universal pre-K. It’s aiming to deliver “rapid responses” as policy debates arise. “If you care about thinking about investments in kids and parental leave and the child tax credit, we need to understand what those investments actually deliver to you over a period that’s longer than the budget window,” Sarin told MM. “This isn’t the fault of scorekeepers that they’re not doing this work. It’s actually not their mandate. They’re asked to produce something very precise which is produce cost estimates in the budget window.” Sarin noted that the JCT, for example, is capacity constrained. “If you’re not majority leader or one of the leaders of one of the tax-writing committees, trying to get your tax proposal in front of CBO and JCT with a score attached to them is just hard to do, and they acknowledge that,” she said. “They wish they had more people, they wish they had more infrastructure.” Budget Lab is out with two initial reports looking at the impacts of potential reforms to the Tax Cut and Jobs Act, which has provisions that expire at the end of next year, and the Child Tax Credit. The scenarios for addressing TCJA — full extension, a Biden-esque partial extension and a deficit-reduction proposal from Sarin and Kimberly Clausing — include examinations of the effects on short- and long-term GDP, tax compliance and income inequality. “Part of what we hope to develop the capacity to do is to really be able to say, if you take Trump at face value and he’s cutting the corporate rate and raising tariffs across the board by 10 percent, what does that mean and how do we quantify the impact of that?” Sarin said. “Similarly, if you are entering the 2025 tax debate with the Biden Greenbook as your framework, what does that mean?” Budget Lab’s site features a “TCJA extension simulator” that allows users to see the impacts of extending or modifying provisions of the law. The group also plans to publicly share the code used to produce its analysis. “Nothing we are doing is secret sauce,” Gimbel said. “We’re using publicly available models. We’re making our code available so other people can do it. We feel very strongly we do not have a secret sauce. We are not McDonald’s.” Budget Lab is having a kick-off event at the National Press Club today that’s scheduled to feature remarks by OMB Director Shalanda Young, former Bush OMB director Joshua Bolten and former CBO director Douglas Holtz-Eakin. Happy Friday — Send tips to zwarmbrodt@politico.com.
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