Penner on the Budget Baseline

July 3 - Former CBO director Rudolph Penner wrote an article yesterday describing how current models of the budget "baseline" bias spending over tax cuts. Penner defends his argument by pointing out that current spending is projected as if the levels of spending were permanent, even if current law sets them to expire, while sunsetting tax policies and cuts are projected as temporary. Penner suggests:

"A more sensible approach would regard all temporary spending [and] tax policies to be permanent. In addition to leveling the playing field, it would make the baseline a more accurate predictor of future spending and revenues, because almost all temporary tax and spending provisions are, in fact, routinely extended."