In this fact-checking video, CNN’s Jake Tapper examines false and misleading claims made on the Sunday political talk shows by Larry Kudlow, the chief economic adviser to the president, about the Tax Cuts and Jobs Act.
Kudlow said on CBS’ “Face the Nation” that Congressional Budget Office numbers show the “entire $1.5 trillion tax cut is virtually paid for by higher revenues and better nominal GDP.” But that’s not the case, experts told us.
The CBO projected in April that the tax law, factoring in all economic effects, would still add nearly $1.9 trillion to the total deficit between 2018 and 2028.
The CBO does estimate that the tax law will prompt some economic changes, including a boost in the average annual real GDP. But the overall macroeconomic feedback from the law isn’t enough to cover the cost.
“CBO is certainly not projecting that the tax cuts will pay for themselves,” Aparna Mathur, a resident scholar in economic policy studies at the American Enterprise Institute, told FactCheck.org in an email.
On CNN’s “State of the Union,” Kudlow told Tapper that “even the CBO, they’re suggesting we have already paid for two-thirds of the corporate tax cut.”
Mark Mazur, director of the Tax Policy Center, told CNN that he had “no idea” where Kudlow got those numbers. He added: “It’s possible that he is taking the effects of all the economic revisions in CBO’s April projections, many of which did not stem from the TCJA, and saying the budgetary effect of all those changes outweighs the cost of the corporate and business provisions of the bill.”
The White House did not respond to our request for an explanation of Kudlow’s claims.
FactCheck.org and CNN’s “State of the Union” have been collaborating on fact-checking videos since September 2015. This video is based on our story “CBO Didn’t Say Tax Cuts Were ‘Virtually Paid For.’”
All of the fact-checking videos can be found on FactCheck.org.