Legislation

Treasury Inspector General Finds No Political Meddling in Tax Analysis

In a letter outlining the report, Eric M. Thorson, the inspector general, said that Office of Tax Analysis officials said their analyses were not released publicly because the office had gotten the impression, as the legislative drafting process picked up, that Congressional staff and lawmakers were “less interested in getting OTA’s input.”

The report, which is based primarily on an interview with the department’s top tax expert, James Mackie, said that Mr. Mackie appeared to agree with Joint Committee on Taxation analysis that showed the Senate’s version of the legislation would add $1 trillion to the deficit over a decade, even when factoring in additional economic growth.

Mr. Mackie, the director of the Office of Tax Analysis, had no official position on the estimates but told the inspector general that they are “widely considered to be reasonable,” according to the report. Mr. Mackie is retiring from the department this month.

Treasury ultimately released a one-page analysis on Dec. 11 showing that the tax plan would more than pay for itself when using the Trump administration’s optimistic economic growth assumptions that factored in future economic policies. Tax experts from conservative and liberal think tanks criticized that report, which estimated a 2.9 percent growth rate, for using unrealistic projections.

The inspector general said that Mr. Mackie “declined to give a substantive answer” as to the likelihood of the 2.9 percent economic growth rate, but the report points out that such growth is “rare.”

“Bureau of Economic Analysis data indicate that such a run, in duration and magnitude, would be greater than has been the case in the U.S. since World War II,” the report said.

The Treasury inquiry was requested by two Democratic senators, Elizabeth Warren of Massachusetts and Ron Wyden of Oregon, the ranking Democrat on the finance committee. They said the report shows that Treasury was hiding the truth about the cost of the Republican tax cuts.

“This report confirms that congressional Republicans had no interest in unbiased analysis of the final tax bill by Treasury experts, and makes clear that Republicans sold the bill based on unsubstantiated and unrealistic assumptions so they could give a $1.5 trillion giveaway to their donors,” Ms. Warren said.

Mr. Wyden was unconvinced by the conclusion that the Treasury career staff members were free from interference.

“This political meddling has left a black mark on the once-sterling reputation of the career employees at the Treasury Department,” he said.

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