The process was allegedly designed to promote fiscal sanity, such as curbing the nation's appetite for debt. Well, that didn't work. Federal debt in public hands was about 23 percent of GDP (gross domestic product) back in the mid-1970s. Today it is about 77 percent of national income. Not much discipline there.
But the key problem with reconciliation is the highly flawed economic model used to score tax bills. Namely, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) score tax relief as a revenue loser and tax increases as revenue gainers. Clearly, such modelling makes it very difficult to reduce marginal tax rates.
And in recent years, this static modelling has led to the notion that tax cuts need a "pay-for." If you don't cut the budget enough, you don't get your tax cut.
Almost weirdly, the scorekeepers are happy with tax hikes, allegedly to balance the budget. But tax hikes depress economic growth, which reduces GDP. And with a smaller income base, actual revenues decline, simply because almost everybody is worse off.
In truth, the best way to balance the budget is to reduce tax rates and provide new incentives for faster growth, which then expands the income base and throws off more revenues.
In our book, "JFK and the Reagan Revolution", Brian Domitrovic and I quote Democrat John F. Kennedy in his 1962 speech to the New York Economics Club. With high drama, JFK turned against the New Deal, saying, "it is a paradoxical truth that tax rates are too high today (91 percent top rate) and tax revenues too low, and the soundest way to raise revenues in the long run is to cut rates now ... The reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment."
Twenty years later, Republican Ronald Reagan duplicated the JFK tax cuts to liberate a stagflationary economy. Today, the JFK-Reagan approach would rescue a stagnant economy.
But the scorekeepers stand in the way. They're part of the swamp. They're telling Trump you cannot lower tax rates without pay-fors.
So I'd say it's time for a "tactical nuclear option inside reconciliation," as playfully put by Wall Street Journal reporter Richard Rubin. Throw out the static models and replace them with dynamic scoring that recognizes the positive impact of lower tax-rate incentives on growth.
The CBO estimates real economic growth over the next 10 years will continue to stagnate at a 1.8 percent annual pace. However, looking at history, we know that growth will increase with more take-home pay and handsome rewards for business.