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Penn Wharton Budget Model enjoys public lashings from both the Biden and Trump administrations

Erin Arvedlund, The Philadelphia Inquirer on

Published in Business News

Numbers tell the truth, but the White House doesn't always want to hear it.

The Penn Wharton Budget Model has made a name for itself as a non-partisan budget modeling outfit crunching economic analysis of fiscal impact from public policy, housed at the Wharton School of the University of Pennsylvania.

The group applied its rigor to the roughly $2.1 trillion Build Back Better Act currently before Congress, and found the 10-year deficit to be $274 billion.

That ticked off the Biden administration, which claimed the measure was revenue neutral. An administration spokesperson lashed out at the Penn Wharton team, questioning its math and dismissing it as right-wing.

Kent Smetters, the leader of the Penn Wharton group, has heard it all before, noting that past estimates also came under fire from the previous administration.,

Indeed, the Wharton group got some support late last week when the widely anticipated Congressional Budget Office released its estimates of the bill and also found big deficits.

 

The CBO put the Build Back Better Act's deficit at $367 billion over the years 2022 to 2031. Importantly, Smetters noted, the CBO didn't include revenue expected from increased IRS enforcement of tax laws.

In fact, the CBO forecasts a deficit over 10 years of $160 billion with IRS enforcement.

"By tradition, a score does not include IRS enforcement effects since the score already assumes that people comply with the law," said Smetters who worked for the CBO from 1995 to 1998. Hence the different numbers.

The White House then immediately claimed on Friday that the CBO analysis confirms a 10-year surplus — but also acknowledged that it replaced figures for IRS enforcement that it didn't like from CBO with its own figures, said Smetters.

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