The Republicans’ growth plan doesn’t add up. That’s an opening for Democrats. – Washington Post
By Jared Bernstein By Jared Bernstein July 24 at 6:00 AM
Jared Bernstein, a former chief economist to Vice President Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of the new book 'The Reconnection Agenda: Reuniting Growth and Prosperity.'
Last week, four A-list Republican economists published a validator document to support the contention that economic plans by the Trump administration and congressional Republicans will boost the real GDP growth rate from 2 percent to 3 percent.
This is the sort of piece you get when policymakers, having put forth a plan that they say will accomplish something, ask their allies on the outside to publish a document validating their claim (I dont know if thats the origin of this particular piece). Such documents do not necessarily argue that 2 + 2 = 5; validators can be honest or phony, and an honest validation doc can be a useful tool, one that helps the media, for example, to assess the credibility of the underlying claim.
For reasons Ill share in a moment, the piece is unconvincing. But when Steve Liesman and I discussed it on CNBC the other day, he posed an interesting challenge. Steve granted my rap about why these guys are wrong. But whats wrong with trying? he asked. Shouldnt Democrats also be for faster growth (assume for the purposes of this discussion that such growth is environmentally sustainable)?
Its a fair question.
The fundamental problem with the study is its lack of evidence to back up the authors claims. As regards the administrations vague agenda to boost the growth rate by half, the authors merely assert (my italics): We believe it can. We judge that such a policy package, in part by encouraging firms to expand by bringing new investment to production, can help raise trend labor productivity growth to around 2.3 percent per year in the non-farm business economy and perhaps higher
The piece offers no evidence to support such beliefs or judgments. They instead assert that high marginal tax rates, especially those on capital formation and business enterprises, costly new labor market and other regulations, high debt-financed government spending (largely to fund income transfer payments), and the lack of a clear monetary strategy have discouraged real business investment and reduced both the supply of and the demand for labor.
But theres no such simple, empirical relationship between high marginal rates and investment, productivity, or GDP growth, either over time in the United States or across countries (see scatterplots here and on page 256here). President Bill Clinton raised high-end tax rates in the 1990s and productivity boomed later in the decade (2.5 percent per year, 1995 to 2000); President George W. Bush lowered top rates and, a few years later, productivity growth started to slow. To be clear, Im not saying that higher taxes boost growth. Instead, Im strongly warning you to reject simplistic claims either way.
That lack of a clear monetary strategy bit is a swipe at the Fed, again offered without evidence. In fact, as I show in this recent testimony, the Feds aggressive response to the Great Recession was effective in lowering key interest rates in the economy and thereby helping to pull the recovery forward.
A more credible attempt at calibrating the growth effects from the Trump budget comes from the recent Congressional Budget Office evaluation. As opposed to more than tripling the rate of productivity growth, the budget office finds that (my bold) average growth in inflation-adjusted GDP over the 20182027 period would be about 0.1 percentage point higher under the presidents proposals than under CBOs baseline.And they get that small increment to growth only by accepting team Trumps promise that theyll offset their tax cuts with increases to be named later (the old magic asterisk approach).
But heres where Liesmans challenge comes in. Democrats should not take the above to imply that better policies cant lead to at least somewhat faster growth, and most important, growth that reaches the poor and the middle class.
Its tempting for progressives to conclude that if Trump is pushing it, we must push against it. But being against Trump doesnt mean were against growth. To the contrary, Democrats need their own growth agenda, one thats evidence-based and inclusive. The rap on Democrats is that they care only about redistribution, never about growth. Thats demonstrably false, and progressives shouldnt let ourselves be painted into that corner.
(We could, for the record, point out that growth has, in fact, done better under Democrats, but sorry, I just dont think theres much of a substantive argument there.)
So, whats a pro-growth Democratic agenda? Funny you should ask, because congressional Democrats are rolling out their Better Deal agenda this week. As I understand it, its a plan to increase jobs and pay, reduce the cost of some of the more expensive parts of the lives of moderate-income families (e.g., prescription drugs, higher ed, child care), and to help workers whove been stuck on the job-market sidelines by boosting apprenticeships (earn while you learn), and incentivizing companies to train and then hire workers whose skills need an upgrade.
Im not here to write a validator paper on their agenda, although Ill let you know what I think as I learn more about it. I can tell you that these measures have a much better chance of reaching those who need an economic boost than trickle-down tax cuts. In terms of growth, improved quality of the labor force is an input into faster productivity growth; family-friendly labor policies have been shown to significantly boost labor supply, especially of working moms.
Whats more, such ideas exist at that rarefied intersection of good politics and good policy. Republicans claim to be at that intersection, but as the health-care debate revealed, theyre way on the other side of town. That leaves a vacancy the other side needs to fill.
View post:
The Republicans' growth plan doesn't add up. That's an opening for Democrats. - Washington Post
- 'Long overdue': Senate Republicans ram through Trump's clawback package with cuts to foreign aid, NPR - Fox News - July 18th, 2025 [July 18th, 2025]
- Senate Judiciary Committee Republicans advance nomination of former Trump lawyer Emil Bove as Democrats walk out - CNN - July 18th, 2025 [July 18th, 2025]
- Governor Hochul Convenes Cabinet Meeting on Devastating Impacts of Republicans Big Ugly Bill on New York State - Governor Kathy Hochul (.gov) - July 18th, 2025 [July 18th, 2025]
- Trump blasts 'stupid' and 'foolish' Republicans amid calls to reveal more Epstein files - ABC News - Breaking News, Latest News and Videos - July 18th, 2025 [July 18th, 2025]
- A risky bet? Texas Republicans poised to redraw congressional map on Trumps orders - The Guardian - July 18th, 2025 [July 18th, 2025]
- Republicans to tee up House vote on Epstein resolution - The Hill - July 18th, 2025 [July 18th, 2025]
- Republicans are split over the Trump administrations handling of Epstein files - Politico - July 18th, 2025 [July 18th, 2025]
- Republicans Fretted Over Ceding Spending Power to Trump. Then They Voted to Do It. - The New York Times - July 18th, 2025 [July 18th, 2025]
- These are the Republicans who voted against Trump's $9 billion clawback of foreign aid, NPR funding - Fox News - July 18th, 2025 [July 18th, 2025]
- Republicans Introduce Bill to Revoke the Charter of Largest US Teachers Union - Truthout - July 18th, 2025 [July 18th, 2025]
- Trump pushes Texas Republicans to redraw congressional maps to help defend GOP's House majority - Fox News - July 18th, 2025 [July 18th, 2025]
- Is This Restaurant the Only Thing Democrats and Republicans Agree On? - The New York Times - July 18th, 2025 [July 18th, 2025]
- Youre Irrelevant: House Republicans Roll Their Eyes at the Freedom Caucus - NOTUS - July 18th, 2025 [July 18th, 2025]
- Republicans plow ahead on cuts to PBS and foreign aid - Axios - July 18th, 2025 [July 18th, 2025]
- Susan Collins finally got her dream job. Fellow Republicans are making it a nightmare. - Politico - July 16th, 2025 [July 16th, 2025]
- Republicans in Congress Shift to Backing Ukraine, Matching Trumps Reversal - The New York Times - July 16th, 2025 [July 16th, 2025]
- House Speaker Johnson joins growing number of Republicans pressing Trump administration for more transparency on Epstein case - CNN - July 16th, 2025 [July 16th, 2025]
- Trump tells Texas Republicans to redraw the state congressional map to help keep House majority - AP News - July 16th, 2025 [July 16th, 2025]
- Behind Republicans Risky Bid to Draw Themselves Five More Seats in Texas - Cook Political Report - July 16th, 2025 [July 16th, 2025]
- A closer look at where Senate Republicans stand on Trumps rescission request - PBS - July 16th, 2025 [July 16th, 2025]
- Senate Republicans narrowly advance Trump's $9 billion spending cut package - NBC News - July 16th, 2025 [July 16th, 2025]
- House Republicans block Democratic maneuver to force release of Epstein files - Axios - July 16th, 2025 [July 16th, 2025]
- For Some Republicans, Trumps Shift on Epstein Is Just the Latest Breach - The New York Times - July 16th, 2025 [July 16th, 2025]
- Republicans race to slash $9bn for public broadcasting and foreign aid - The Guardian - July 16th, 2025 [July 16th, 2025]
- Speaker Mike Johnson and other Republicans break with Trump on Epstein - The Washington Post - July 16th, 2025 [July 16th, 2025]
- Republicans move to block Democratic effort to force release of Epstein files - The Guardian - July 16th, 2025 [July 16th, 2025]
- Republicans renew a bid to remove noncitizens from the census tally behind voting maps - NPR - July 16th, 2025 [July 16th, 2025]
- These Republicans Want More Details Over Handling of Epstein Files - Newsweek - July 16th, 2025 [July 16th, 2025]
- Opinion | Mamdani for Mayor (if You Want to Help the Republicans) - The New York Times - July 16th, 2025 [July 16th, 2025]
- Republicans Proceed with Bill to Increase Energy Costs and Make Americans More Vulnerable to Nuclear Threats - House.gov - July 16th, 2025 [July 16th, 2025]
- Texas Redistricting Maneuver May Harm Republicans More Than It Helps - The American Prospect - July 16th, 2025 [July 16th, 2025]
- Texas Republicans Oldest Trick In The Book - split-ticket.org - July 16th, 2025 [July 16th, 2025]
- Republicans in Congress break with Trump on his handling of the Epstein files - NBC News - July 16th, 2025 [July 16th, 2025]
- Republicans declared it crypto week in the House. Its not going as planned - AP News - July 16th, 2025 [July 16th, 2025]
- Republicans declared it crypto week in the House. Its not going as planned - WHEC.com - July 16th, 2025 [July 16th, 2025]
- Ohio House Republicans will try to override Gov. DeWine property tax vetoes - Ohio Capital Journal - July 16th, 2025 [July 16th, 2025]
- 211 House Republicans Vote to Block Release of Epstein Files - The New Republic - July 16th, 2025 [July 16th, 2025]
- NC Republicans in Congress respond to Gov. Stein's letter on Trump budget - WRAL.com - July 16th, 2025 [July 16th, 2025]
- Senate Republicans divided over looming vote to rescind $9 billion in spending - The Spokesman-Review - July 16th, 2025 [July 16th, 2025]
- Republicans confirm Whitney Hermandorfer, the first judge of Trumps second term - MSNBC News - July 16th, 2025 [July 16th, 2025]
- Trump is crushing it, but the Republicans can still blow it in 2026 and 2028 - The Hill - July 14th, 2025 [July 14th, 2025]
- Jan. 6 Rioters Are the New Hot Event in Town for Republicans - The Wall Street Journal - July 14th, 2025 [July 14th, 2025]
- Republicans and Democrats visited Alligator Alcatraz for the first time. Heres what they saw. - Politico - July 14th, 2025 [July 14th, 2025]
- Pollster: Republicans outnumber Democrats in number of active registered voters in Louisiana for first time - louisianaradionetwork.com - July 14th, 2025 [July 14th, 2025]
- Cortez Masto Blasts Republicans for Refusing to Fix the Provision in Their Tax Bill that Limits the Wagering Loss Deduction - Senator Catherine Cortez... - July 14th, 2025 [July 14th, 2025]
- Karoline Leavitt Just Made A Trump Claim So Ridiculous That Even Republicans Are Calling It Out - Yahoo - July 14th, 2025 [July 14th, 2025]
- Republicans Blame Canada for Wildfire Smoke Suffocating the U.S. - The New York Times - July 12th, 2025 [July 12th, 2025]
- Senate Republicans block attempt to roll back massive tax hike on professional gamblers - AP News - July 12th, 2025 [July 12th, 2025]
- Republicans run a risky strategy for holding the House that rests on redrawn maps - Politico - July 12th, 2025 [July 12th, 2025]
- As Texas Republicans prepare for mid-decade redistricting, cautionary tales loom from the past - The Texas Tribune - July 12th, 2025 [July 12th, 2025]
- Trump warns Republicans against rejecting cuts to PBS and NPR - The Hill - July 12th, 2025 [July 12th, 2025]
- Republicans probably shouldve read their far-right megabill before passing it - MSNBC News - July 12th, 2025 [July 12th, 2025]
- Republicans Are Changing Their Tune on Immigration: Poll - Newsweek - July 12th, 2025 [July 12th, 2025]
- Kelly: Republicans cut health care and food for AZ families so the wealthy could pay lower taxes - Arizona Mirror - July 12th, 2025 [July 12th, 2025]
- Think Democrats and Republicans can't work together? On sealing eviction records, they do. - Stateline - July 12th, 2025 [July 12th, 2025]
- How Republicans Rejected A Texas Flood Warning System - The Lever - July 12th, 2025 [July 12th, 2025]
- Texas Republicans have a brazen new plan to block Democrats from retaking the House in 2026 - Mother Jones - July 12th, 2025 [July 12th, 2025]
- Ron Faucheux: Will the Big Beautiful Bill sink Republicans? - NOLA.com - July 12th, 2025 [July 12th, 2025]
- The big, beautiful bill could get ugly for Republicans - The Hill - July 12th, 2025 [July 12th, 2025]
- Republicans push for business sanction on sanctuary cities - NJ Spotlight News - July 12th, 2025 [July 12th, 2025]
- Nicolle Wallace: Trump 'has turned Republicans in the Senate into ghosts' - MSN - July 12th, 2025 [July 12th, 2025]
- Jury finds former head of Island County Republicans guilty in Elections Office mask mandate case - Whidbey News-Times - July 12th, 2025 [July 12th, 2025]
- Charlie Kirk sounds the alarm on the biggest threat to Republicans holding the White House in 2028 - Fox News - July 12th, 2025 [July 12th, 2025]
- Jon Stewart Rips Republicans for Trying to Jedi Mind Trick Americans Into Thinking There Never Was an Epstein List | Video - Yahoo - July 12th, 2025 [July 12th, 2025]
- Republicans toe Trump line even in aftermath of deadly Texas floods - The Guardian - July 10th, 2025 [July 10th, 2025]
- Opinion | How Republicans can defy history and survive the midterms - The Washington Post - July 10th, 2025 [July 10th, 2025]
- What the Big, Beautiful Bill Reveals About Republicans - Slate Magazine - July 10th, 2025 [July 10th, 2025]
- Are Republicans bowing to Trump even more than they used to? - KCRW - July 10th, 2025 [July 10th, 2025]
- How Republicans sidelined the health care industry and pushed through historic Medicaid cuts - STAT - July 10th, 2025 [July 10th, 2025]
- Republicans urge US universities to cut ties with 'nefarious' Chinese-backed scholarship program - ABC News - Breaking News, Latest News and Videos - July 10th, 2025 [July 10th, 2025]
- Full List of Republicans Who Voted To Slash Weather Forecasting Funding - Newsweek - July 10th, 2025 [July 10th, 2025]
- Republicans are already getting hammered over the OBBB - Punchbowl News - July 10th, 2025 [July 10th, 2025]
- Will Republicans in Virginia pay a price for the One Big Beautiful Bill? Here's what the math shows. - Cardinal News - July 10th, 2025 [July 10th, 2025]
- These Republicans fought for green energy tax credits. Trumps latest order could threaten them - Deseret News - July 10th, 2025 [July 10th, 2025]
- 'Nefarious mechanism': Republicans issue stern warning to US universities against Chinese scholarship pro - Times of India - July 10th, 2025 [July 10th, 2025]
- Republicans Are Already Licking Their Lips at the Chance of Another Reconciliation Bill - NOTUS - July 10th, 2025 [July 10th, 2025]
- Republicans say 'big, beautiful bill' will address states with high SNAP payment error, including Colorado - Denver7 - July 10th, 2025 [July 10th, 2025]
- Opinion | Everyone Hates This Bill. Dan Osborn Could Make Republicans Pay for It. - The New York Times - July 8th, 2025 [July 8th, 2025]
- 'Big, Beautiful Bill': Which House Republicans voted against the bill? - FOX 5 DC - July 8th, 2025 [July 8th, 2025]
- 2 Ohio Republicans taking on their own party to protect access to marijuana - News 5 Cleveland WEWS - July 8th, 2025 [July 8th, 2025]