Reevaluating Political Claims: A Closer Look at Senator Tim Scott’s Misstatements
“CBO? Incorrect then, incorrect now.”
– Senator Tim Scott (R-South Carolina), in a social media video posted June 12
Amidst the Republican efforts to criticize the nonpartisan Congressional Budget Office (CBO) for its bleak fiscal forecasts concerning the upcoming “One Big Beautiful Bill” – a package of tax cuts and spending reductions in the Senate – Senator Scott released a one-minute video that quickly drew widespread ridicule for its numerous inaccuracies. Our count identified at least nine errors within his remarks, averaging roughly one mistake every 7 seconds. The video even received a community note on the X platform, highlighting its factual issues.
Despite the mounting criticism, Scott, who chairs the Senate Banking Committee, has not removed the video, nor has his spokesperson responded to repeated inquiries. This prompted us to analyze his statements line by line, revealing a pattern of superficial arguments reminiscent of casual chatter at a bar rather than informed policy debate. While it’s common for some Republicans to criticize the CBO, it’s worth noting that the agency is led by a Republican appointed twice by GOP-controlled Congresses.
Misrepresenting the 2017 Tax Cuts
Scott claims, “In 2017, the CBO said the Tax Cuts and Jobs Act would increase the deficit and debt by trillions of dollars. What happened? They were wrong.”
In reality, the CBO’s analysis was accurate, and Scott’s assertion is incorrect. He supported the 2017 tax legislation, which initially aimed to be revenue-neutral but was later shifted to deficit-financed cuts, based on the belief that economic growth would offset the revenue loss. The CBO projected a $1.5 trillion increase in the deficit over a decade, though this estimate was artificially reduced because Congress decided to sunset the tax cuts after nine years – a move that has prompted ongoing efforts to extend them. Updated forecasts in 2018 indicated a revenue loss of approximately $1.9 trillion, with macroeconomic effects reducing the net impact to about $1.4 trillion. These figures clearly show that the tax cuts did not pay for themselves and contributed to rising deficits.
Scott suggests that the deficit did not grow because of the tax cuts, but the facts tell a different story. The deficit surged significantly, exacerbated by pandemic relief measures enacted under Presidents Trump and Biden, which added trillions to the national debt.
Historical Tax Policy Misattributions
Scott states, “Now, this isn’t surprising. They were wrong about the Mellon tax cuts in the 1930s.”
This is factually inaccurate. The CBO was established in 1974 and began forecasting in 1975, so it could not have evaluated the tax policies of Treasury Secretary Andrew Mellon, who served from 1921 to 1932 under Presidents Harding, Coolidge, and Hoover. Moreover, Mellon’s tax cuts occurred in the early 1920s, not the 1930s. The 1930s were marked by the Great Depression, not tax policy shifts by Mellon.
Historian Joseph Thorndike notes that Mellon, a proponent of supply-side economics, implemented tax reductions during the early 1920s to stimulate economic growth. While initial revenue declined due to lower rates, federal income increased during subsequent periods of expansion. Interestingly, Mellon also prioritized balanced budgets; during the Depression, he recommended tax hikes-including estate taxes-to help stabilize the economy, a move that some argue prolonged the downturn.
Mischaracterizing the 1960s Tax Reforms
Scott claims, “They were wrong on the Kennedy tax cuts in the 1960s.”
Again, the CBO did not exist at that time, so it could not have made forecasts about Kennedy’s proposed policies. President John F. Kennedy advocated for tax reductions, and the Revenue Act of 1964-signed into law after his assassination-cut top individual rates from 91% to 70%, with further reductions to 37% today. The legislation aimed to boost economic growth through deficit spending, which was initially controversial among conservatives.
The Reagan Era and Its Fiscal Impact
Scott asserts, “They were wrong on the Reagan tax cuts in the 1980s.”
This is another misstatement. The CBO was operational during Reagan’s presidency and did analyze the impact of his tax policies. Contrary to Scott’s claim, the CBO actually overestimated the revenue gains from Reagan’s tax cuts. The Economic Recovery Tax Act of 1981 reduced top rates from 70% to 50%, leading to a significant decrease in federal revenue-by approximately 2.89% of GDP over four years, according to Treasury estimates. The deficit increased sharply during this period, marking the largest tax cut in U.S. history.
Reagan himself expressed concern about the rising deficit and later signed legislation to raise taxes, aiming to curb the deficit. Successive presidents, including George H.W. Bush and Bill Clinton, continued this trend, with Clinton’s administration restoring revenue levels and ultimately leading to budget surpluses by the late 1990s.
Assessing the 2017 Tax Cuts and Revenue Effects
Scott claims, “When have they been right? I don’t know either. But I can tell you the 2017 TCJA produced a 3% increase in revenues in 2018 and another 3% in 2019.”
This is misleading. The Congressional Budget Office’s estimates for those years were very close to actual revenue figures, slightly overestimating revenue rather than underestimating it. In 2018, CBO projected $3.338 trillion in revenue; actual receipts were $3.330 trillion. In 2019, estimates were $3.490 trillion, with actual collections at $3.463 trillion. These figures demonstrate the agency’s forecasting accuracy, not an overestimation.
The Myth of the Laffer Curve
Scott states, “Because the Laffer curve is correct, lowering taxes always increases revenue.”
This reflects a fundamental misunderstanding. The Laffer curve, named after economist Arthur Laffer, illustrates that there is an optimal tax rate that maximizes revenue. If rates are too high, lowering them can increase revenue; if too low, raising them can do the same. However, the curve does not guarantee that tax cuts will always lead to higher revenue. In fact, empirical evidence shows that most tax cuts, including those in recent history, tend to reduce revenue unless accompanied by significant economic growth.
Conclusion: A Pattern of Misleading Claims
Since every example cited by Scott fails to demonstrate that the CBO was wrong, his concluding statement-“CBO? Wrong then, wrong now”-appears to be an overstatement. Our analysis suggests that his claims are riddled with inaccuracies, earning a rating of Four Pinocchios on our scale.
