Taxes, Spending, the Fiscal Cliff, and Austerity

[catatomic]

I guess not.

 

[oldfart]

The CBO uses static scoring, assuming people do not change their behavior in response to changes in tax law. IN the real world that doesnt happen. Obama himself acknowledges that higher cap gains rates produce less revenue, not more. Is Obama lying?

Where do you get the idea that the CBO uses static scoring? http://cbo.gov/sites/default/files/cbofiles/ftpdocs/33xx/doc3373/1995doc18.pdf

The budget estimates are also based on numerous assumptions about the
microeconomic effects of the proposed policies-that is, how those policies might
change individual behavior in response to new economic incentives. These
behavioral and other technical estimating assumptions cover a wide variety of effects
and reflect recent research and the best available estimating practices. For example,
the estimate of a proposal to subsidize health insurance for early retirees would
include the cost associated with the increase in the number of Social Security
beneficiaries that would occur. Similarly, the estimate of a proposal to increase the
excise tax on tobacco products would take into account the resulting decrease in
consumption of cigarettes.

 

[nodoginnafight]

Arguments like this unfortunately miss the big picture. When you argue for increasing government revenue one has to do so under the assumption that the government actually needs more money. That is the assumption that needs to be tackled first if we're ever going to get out of this. Instead of trying to figure out how to get the government more money, we should first be trying to figure out what does government actually need. Once we figure that out we can then devise a tax policy that ensures they get it.

This argument is simply an effort to re-write 50 to 60 years of legislation and redefine the contract between government and the governed in three weeks. It's an effort to re-vote on every issue that you already lost the argument on a long time ago.

 

[The Rabbi]

The CBO uses static scoring, assuming people do not change their behavior in response to changes in tax law. IN the real world that doesnt happen. Obama himself acknowledges that higher cap gains rates produce less revenue, not more. Is Obama lying?

Where do you get the idea that the CBO uses static scoring? http://cbo.gov/sites/default/files/cbofiles/ftpdocs/33xx/doc3373/1995doc18.pdf

The budget estimates are also based on numerous assumptions about the
microeconomic effects of the proposed policies-that is, how those policies might
change individual behavior in response to new economic incentives. These
behavioral and other technical estimating assumptions cover a wide variety of effects
and reflect recent research and the best available estimating practices. For example,
the estimate of a proposal to subsidize health insurance for early retirees would
include the cost associated with the increase in the number of Social Security
beneficiaries that would occur. Similarly, the estimate of a proposal to increase the
excise tax on tobacco products would take into account the resulting decrease in
consumption of cigarettes.

taxanalysts.com: Press Releases -- Martin A. Sullivan: Congressional Budget Office Offers Nod to

Dynamic Scoring: Not so Fast!

Bruce Bartlett on CBO Static/Dynamic Scoring on NRO Financial

etc.

 

[oldfart]

taxanalysts.com: Press Releases -- Martin A. Sullivan: Congressional Budget Office Offers Nod to

Dynamic Scoring: Not so Fast!

Bruce Bartlett on CBO Static/Dynamic Scoring on NRO Financial

OK, let me summarize the cited links. First the CBO in a methodological paper from 1995 indicates it has been using dynamic analysis for several years prior to that date. The first link you cited is from a non-profit which provides tax analysis. Mr. Sullivan discusses CBO's efforts to incorporate dynamic analysis in its scoring with approval and then bemoans the fact that the Joint Committee on Taxation is not doing likewise.

The second link is the famous Tax Policy Center which Republicans seem to alternately love and hate. This 2006 article refers to the CBO and JCT use of dynamic scoring and notes that time considerations sometimes make it impractical to do dynamic scoring, but that static scoring in many cases is an acceptable approximation, with a 14% variance fo a ten year projection in the case studied.

Finally Mr. Bartlett in the third article published in 2002 refers to increasing efforts of CBO to increase the use of dynamic analysis.

Note that all four sources refer to CBO as using dynamic analysis in budget scoring, and nowhere is there a claim that CBO uses static analysis when dynamic analysis is feasible.

So again, where is the evidence that CBO scoring is not usng dynamic analysis?

 

[Sactowndog]

This makes absolutely no sense at all. Arbitrage? Are you talking labor disputes with a union? Who's gonna buy a company in the middle of a labor dispute? Who's gonna sell out if there's more profit to be made elsewhere? I do not understand your position at all.

Can any of you read? I have said the taxes are paid where you live. But that doesn't have anything to do where I am going to invest. Yes at some point a higher capital gains tax limits taking more risk but the capital gains tax here has no affect on if I invest in the US or China. In either case, I pay he same tax. What would impact investing here or in China is the Corporate Income tax here versus the corporate income tax in China.

We can reduce the capital gains rate all day and investors will still send more money to China if their income tax rate is lower (assuming Taxes are a key decision factor which is debatable)

It doesn't matter where you live. If you are a U.S. citizen, your income must still be reported to the U.S. IRS. In most cases, if the country where you are living requires taxes at least some of taxes paid there can be a credit to your U.S. taxes owed. And, as I previously posted, those doing business in other countries can tack advantage of a foreign tax credit.

Yes this is true assuming you aren't willing to renounce your US citizenship and relocate to another country which some wealthy have done. Again what would drive this behaviour would be capital gains tax and where they invest would be Corporate Income Tax.

So for an extreme example should the use raise capital gains taxes to France like numbers of 80-90% and simultaneously reduce Corporate income taxes to 0% the likely behaviour by the rich would be to move to an country with a lower capital gains tax (as many french are today) but increase investment in the US because earnings on those dollars could now be reinvested tax free.

 

[The Rabbi]

taxanalysts.com: Press Releases -- Martin A. Sullivan: Congressional Budget Office Offers Nod to

Dynamic Scoring: Not so Fast!

Bruce Bartlett on CBO Static/Dynamic Scoring on NRO Financial

OK, let me summarize the cited links. First the CBO in a methodological paper from 1995 indicates it has been using dynamic analysis for several years prior to that date. The first link you cited is from a non-profit which provides tax analysis. Mr. Sullivan discusses CBO's efforts to incorporate dynamic analysis in its scoring with approval and then bemoans the fact that the Joint Committee on Taxation is not doing likewise.

The second link is the famous Tax Policy Center which Republicans seem to alternately love and hate. This 2006 article refers to the CBO and JCT use of dynamic scoring and notes that time considerations sometimes make it impractical to do dynamic scoring, but that static scoring in many cases is an acceptable approximation, with a 14% variance fo a ten year projection in the case studied.

Finally Mr. Bartlett in the third article published in 2002 refers to increasing efforts of CBO to increase the use of dynamic analysis.

Note that all four sources refer to CBO as using dynamic analysis in budget scoring, and nowhere is there a claim that CBO uses static analysis when dynamic analysis is feasible.

So again, where is the evidence that CBO scoring is not usng dynamic analysis?

Every article basically says CBO is moving to dynamic analysis but none of them says this is what they do.

 

[Wiseacre]

" So for an extreme example should the use raise capital gains taxes to France like numbers of 80-90% and simultaneously reduce Corporate income taxes to 0% the likely behaviour by the rich would be to move to an country with a lower capital gains tax (as many french are today) but increase investment in the US because earnings on those dollars could now be reinvested tax free. "


Not understanding, the earnings from investments in the US are subject to taxes here no matter who the investor is or where he/she lives.

 

[Sactowndog]

Clinton raised taxes on the rich in '92. And the economy cratered, right? Not quite. Longest sustained economic boom in our naton's history.

Then Bushie Baby cut taxes, while engaged in two wars. And the economy did great, right? LOL. 16 trillion in homeowners value and 401Ks lost in two years, from 2007 to 2009.

So, what are we to believe? Recent history or rightwing ideology?

There are so many problems when looking at this from any perspective. First off, there is some merit to the idea that raising taxes will hurt more than help, at least in the short term. The problem is that we have gotten ourselves into a severe pickle because we have used tax cuts over the past decade plus as a way to stimulate the economy. Problem is, the tax cuts only helped in short stints, but in the long run, it did nothing. We can't cut taxes any further to stimulate the economy because revenue has hit rock bottom due to the already low tax rates.

So what about spending? Well, we could cut some here and there, but nobody can agree where to cut. In the end, there is not going to be a simple solution, and this storm is going to be with us for some time; we're going to just have to ride it out. My thoughts are that we end the payroll tax cut, and raise the tax rate on anyone making over $100,000 per year. The rate increase does not need to be massive. Secondly, raise the tax rate on capital gains to 20% with the idea of raising it higher once the economy gets rolling again, if necessary. As for cuts, the easiest way to cut spending is to freeze it across the board, other than for SS and Medicare. As for the long term, SS and Medicare spending must be reduced in comparison to what we are expecting to pay out. We can't cut spending on those programs because we have more and more people retiring. What we can do is raise the retirement age gradually for everyone until we hit a point where revenue and payouts are close to being balanced for the long term.

One thing nobody thinks about is that if we do what needs to be done to get spending under control, even if it is done slowly, the economy is going to pick up eventually. There are two factors to look at that have nothing to do with politicians, taxation, or government spending. The baby boomers are all retiring. Even if they haven't retired yet, they are downsizing and not spending as much money anymore. This wouldn't be such a problem but for the fact that their kids have delayed starting their own families. While there are reasons for this, mostly economic, they are starting to hit the age where they have to begin getting married and having kids. My thought is that within the next ten years, we are going to see a boom in child births which will lead to a lot of younger people needing to buy homes and bigger cars. The spending cycle will kick into high gear once again, and then we will see things improve dramatically.

Arguments like this unfortunately miss the big picture. When you argue for increasing government revenue one has to do so under the assumption that the government actually needs more money. That is the assumption that needs to be tackled first if we're ever going to get out of this. Instead of trying to figure out how to get the government more money, we should first be trying to figure out what does government actually need. Once we figure that out we can then devise a tax policy that ensures they get it.

Actually this is pretty much known. Most people look at ~19-20% of GDP as the amount of spending needed. A little less in good times and a little more in a recession. Revenues are currently in the 16-17% of GDP and have to come up for us to get to a balanced budget and maintain the things we currently say we want to have.

Now if we want to go back to an isolationist defense policy or eliminate Medicare or Social Security then we could drop the percentage but with those priorities you are in the 19-20% range.

 

[Wiseacre]

" Revenues are currently in the 16-17% of GDP and have to come up for us to get to a balanced budget and maintain the things we currently say we want to have. "


This is the crux of the issue over raising taxes. Democrats want to raise the rate, and republicans believe doing that could adversely affect economic growth and the creation of new jobs. Especially if the cap gains and dividend taxes are increased. The GOP would rather would rather reform the tax code to disallow certain big income earners from reducing or eliminating their tax burden, but in so doing could also broaden the tax base. Maybe you don't get as much new revenue that way, but revenue isn't the major driven of debt/deficits anyway.

Far more central to the issue of deficit reduction is spending cuts, which neither side wants to talk about. I'm not talking about spending cuts in defense due to the end of the Iraq and Afdghan wars, those are gonna happen anyway. T want to see real entitlement reform that will make those programs sustainable well into the future; I know a lot of people in their 30s who don't believe the system as it is today will exist when their turn comes up. I'm okay with defense taking their fair share of the hit, I think they're already doing that to some extent.

 

[Sactowndog]

" So for an extreme example should the use raise capital gains taxes to France like numbers of 80-90% and simultaneously reduce Corporate income taxes to 0% the likely behaviour by the rich would be to move to an country with a lower capital gains tax (as many french are today) but increase investment in the US because earnings on those dollars could now be reinvested tax free. "


Not understanding, the earnings from investments in the US are subject to taxes here no matter who the investor is or where he/she lives.

So I am assuming the inverse of US laws and perhaps an accountant can chime in here....

If I move to say the Cayman Islands and give up my US citizenship for Cayman Citizenship..... the Cayman Island capital gains taxes would apply (assume they are 15%). So I would save on my capital gains taxes. I am assuming, perhaps incorrectly that any capital gains on the stock will pay local country capital gains taxes and not US capital gains taxes.

Meanwhile the US has lowered Corporate Income taxes to zero.. Any earnings by the company which are reinvested into the company grow tax free. So if I invest a dollar into the company and it generates .06 in income those retained earning can be reinvested into the business with no tax. That increases earnings after taxes and interest and therefore the value of my stock. In essence company's act like giant 401K's.

Now assume I raise capital gains taxes and lower corporate income taxes by the same amount. What are the effects......

US investors investing in US investments are a wash. The increase in capital gains taxes are balanced with the decrease in corporate income taxes. The double taxation as Republicans like to point out essentially cancels each other out.

US investors investing in China are punished. They pay more in capital gains taxes but corporate income taxes in China remain the same so their net tax load increases. If the net tax load increases per Republican dogma the incentive to invest in China is decreased.

Japanese investors investing in the US are rewarded. The local capital gains tax in Japan stays the same while the corporate income tax is reduced so the net tax load is decreased. If the net tax load decreases per Republican dogma the incentive to invest in he US is increased.

So by raising capital gains and lowering the Corporate income tax I in effect create more investment in the US which equates to more jobs. Get it now??

 

[Sactowndog]

" Revenues are currently in the 16-17% of GDP and have to come up for us to get to a balanced budget and maintain the things we currently say we want to have. "


This is the crux of the issue over raising taxes. Democrats want to raise the rate, and republicans believe doing that could adversely affect economic growth and the creation of new jobs. Especially if the cap gains and dividend taxes are increased. The GOP would rather would rather reform the tax code to disallow certain big income earners from reducing or eliminating their tax burden, but in so doing could also broaden the tax base. Maybe you don't get as much new revenue that way, but revenue isn't the major driven of debt/deficits anyway.

Far more central to the issue of deficit reduction is spending cuts, which neither side wants to talk about. I'm not talking about spending cuts in defense due to the end of the Iraq and Afdghan wars, those are gonna happen anyway. T want to see real entitlement reform that will make those programs sustainable well into the future; I know a lot of people in their 30s who don't believe the system as it is today will exist when their turn comes up. I'm okay with defense taking their fair share of the hit, I think they're already doing that to some extent.

I don't disagree. If I were king, I would change the tax structure and make capital gains taxes higher and replace the corporate income tax with a capital exportation tax.

But the fact is I am not and we need to raise revenue. Obama won the election over Bush and this questions was central to the election. Get over it.....

Raise taxes on the wealthy and reform entitltements as you ask. This isn't really that hard.

 

[oldfart]

Every article basically says CBO is moving to dynamic analysis but none of them says this is what they do.
I am sorry your reading skills are poor.

You may want to re-read your own links. Every one gives examples of CBO using dynamic analysis. Did you post them without reading them? Anyway enough of this. Everyone can follow the four links and draw their own conclusions.

 

[Wiseacre]

" So for an extreme example should the use raise capital gains taxes to France like numbers of 80-90% and simultaneously reduce Corporate income taxes to 0% the likely behaviour by the rich would be to move to an country with a lower capital gains tax (as many french are today) but increase investment in the US because earnings on those dollars could now be reinvested tax free. "


Not understanding, the earnings from investments in the US are subject to taxes here no matter who the investor is or where he/she lives.

So I am assuming the inverse of US laws and perhaps an accountant can chime in here....

If I move to say the Cayman Islands and give up my US citizenship for Cayman Citizenship..... the Cayman Island capital gains taxes would apply (assume they are 15%). So I would save on my capital gains taxes. I am assuming, perhaps incorrectly that any capital gains on the stock will pay local country capital gains taxes and not US capital gains taxes.

Meanwhile the US has lowered Corporate Income taxes to zero.. Any earnings by the company which are reinvested into the company grow tax free. So if I invest a dollar into the company and it generates .06 in income those retained earning can be reinvested into the business with no tax. That increases earnings after taxes and interest and therefore the value of my stock. In essence company's act like giant 401K's.

Now assume I raise capital gains taxes and lower corporate income taxes by the same amount. What are the effects......

US investors investing in US investments are a wash. The increase in capital gains taxes are balanced with the decrease in corporate income taxes. The double taxation as Republicans like to point out essentially cancels each other out.

US investors investing in China are punished. They pay more in capital gains taxes but corporate income taxes in China remain the same so their net tax load increases. If the net tax load increases per Republican dogma the incentive to invest in China is decreased.

Japanese investors investing in the US are rewarded. The local capital gains tax in Japan stays the same while the corporate income tax is reduced so the net tax load is decreased. If the net tax load decreases per Republican dogma the incentive to invest in he US is increased.

So by raising capital gains and lowering the Corporate income tax I in effect create more investment in the US which equates to more jobs. Get it now??

Well, sorta, I got lost in your scenario fairly quickly. I ain't the sharpest knife in the drawer, and this stuff rapidly gets complicated. I'm not an accountant or a tax expert, or even an economist, just trying to understand this whole deal. That said, my understanding is that if you are a non-resident alien then you don't pay taxes here on capital gains, you do that in your own country whatever the CG rate is there. That means you had to renounce your US citizenship, which is happening these days, over a thousand a year. I think you gotta be out of the country for at least 3 years though. Anyway, if rich folks are renouncing their US citizneship for tax purposes because the income taxes or CG taxes are too high, that's a negative for the economy and jobs. Cuz those people ain't here spending money and investing as US citizens any more.

If you are an American, you pay our taxes no matter where you live or where you earn your income. Same deal if you are a resident alien living here, you are subject to the same tax rates as the rest of us. Sorry 'bout that. Which is one reason why higher CG and income rates discourage resident aliens from investing and staying here. I do not believe this is trivial either, over the past 30 years or so foreign investors have provided a significant chunk of capital into our economy.

Same deal with American investors, wherever they live. A higher cap gains rate disincentivizes them to put their money to good use on our economy. Maybe they don't invest it overseas, but we lose if that money if it's not invested here. Maybe they put it in tax free investments, or find creative ways to lower their tax burden. Long story short, there's no way a higher CG tax rate can be beneficial to an economy unless you're fighting inflation or the economy is overheating.

The corp tax rate thing kinda muddied the waters a little for me. Don't quite see the link with cap gains, one is for investors and the other is for employees. A lower corp tax rate definitely makes a country more attractive for entrepeneurs to startup a business or expand one ormaybe even relocate one. There's a lotta other factors to that though, but the fact is that many countries and US states are trying to do exactly that, attractmore business and hence more jobs and hence more revenue.

 

[Wiseacre]

" Revenues are currently in the 16-17% of GDP and have to come up for us to get to a balanced budget and maintain the things we currently say we want to have. "


This is the crux of the issue over raising taxes. Democrats want to raise the rate, and republicans believe doing that could adversely affect economic growth and the creation of new jobs. Especially if the cap gains and dividend taxes are increased. The GOP would rather would rather reform the tax code to disallow certain big income earners from reducing or eliminating their tax burden, but in so doing could also broaden the tax base. Maybe you don't get as much new revenue that way, but revenue isn't the major driven of debt/deficits anyway.

Far more central to the issue of deficit reduction is spending cuts, which neither side wants to talk about. I'm not talking about spending cuts in defense due to the end of the Iraq and Afdghan wars, those are gonna happen anyway. T want to see real entitlement reform that will make those programs sustainable well into the future; I know a lot of people in their 30s who don't believe the system as it is today will exist when their turn comes up. I'm okay with defense taking their fair share of the hit, I think they're already doing that to some extent.

I don't disagree. If I were king, I would change the tax structure and make capital gains taxes higher and replace the corporate income tax with a capital exportation tax.

But the fact is I am not and we need to raise revenue. Obama won the election over Bush and this questions was central to the election. Get over it.....

Raise taxes on the wealthy and reform entitltements as you ask. This isn't really that hard.

LOL, did I advocate raising taxes on the wealthy? Must've mistyped something somewhere. Look, I'd do it if it meant getting entitlement reforms done. I'd rather leave the rates the way they are and reform the tax code first so some rich guys don't get out of paying what everyone else pays in their income bracket. Frankly, I'd rather see a flat tax with a slight progressive slant to it with no deductions at all. Our tax code is too damn difficult to follow IMHO.

 

[catatomic]

I don't know Rabbi...

After I looked at the fourth paragraph of "Dynamic Scoring: Not so fast" it says,

The JCT has done similar studies of other tax options, as well. The Congressional Budget Office (CBO) also routinely conducts dynamic analyses.

Also in the first link it says congress has made increasing something or other for dynamic scoring, which to me clearly reads as "They have been getting better and better at it" and not, "They aren't getting any and put more and more pressure from it."

And I looked up Bruce Barlett's history. That article was from Aug 19, 2002. Bruce Bartlett has completely changed around by then.

I am sure that they have a good level of dynamic scoring and not just static scoring.

 

[Foxfyre]

I don't know Rabbi...

After I looked at the fourth paragraph of "Dynamic Scoring: Not so fast" it says,

The JCT has done similar studies of other tax options, as well. The Congressional Budget Office (CBO) also routinely conducts dynamic analyses.

Also in the first link it says congress has made increasing something or other for dynamic scoring, which to me clearly reads as "They have been getting better and better at it" and not, "They aren't getting any and put more and more pressure from it."

I am sure that they have a good level of dynamic scoring and not just static scoring.

CBO is required to score using the numbers furnished to it by the President or Congress or sub group requesting an analysis. And usually that is using the static system, though conservaties will always push for the dynamic approach on the theory that tax policy does change the way people behave with their finances and does change the way they do business. Ditto regulatory policy and various mandates.

As long as Congress and the President, whether Democrat or Republican, continues to use the smoke and mirrors approach of baseline budgeting, they will continue to be dishonest re spending increases, spending cuts, and other money management issues. It also ensures that economy will never be utilized by any bureaucracy or spending group and that maximum spending possible will be the rule.

So it really doesn't matter how anything is scored, does it.

 

[catatomic]

I don't know Rabbi...

After I looked at the fourth paragraph of "Dynamic Scoring: Not so fast" it says,

The JCT has done similar studies of other tax options, as well. The Congressional Budget Office (CBO) also routinely conducts dynamic analyses.

Also in the first link it says congress has made increasing something or other for dynamic scoring, which to me clearly reads as "They have been getting better and better at it" and not, "They aren't getting any and put more and more pressure from it."

I am sure that they have a good level of dynamic scoring and not just static scoring.

CBO is required to score using the numbers furnished to it by the President or Congress or sub group requesting an analysis.

Yes that is called raw data. Of course they have it correctly to them.

And usually that is using the static system, though conservaties will always push for the dynamic approach on the theory that tax policy does change the way people behave with their finances and does change the way they do business.

No the data is just data. The analysis is what we are talking about being the static or dynamic system.

Ditto regulatory policy and various mandates.

As long as Congress and the President, whether Democrat or Republican, continues to use the smoke and mirrors approach of baseline budgeting, they will continue to be dishonest re spending increases, spending cuts, and other money management issues.

Dishonest together?

It also ensures that economy will never be utilized by any bureaucracy or spending group and that maximum spending possible will be the rule.

Actually it says that tax hikes and spending cuts relieve the debt to a certain extent and that spending cuts are twice as important as tax increases, hardly what Barack Obama or Republicans probably wants to say. I said this in my first post.

So it really doesn't matter how anything is scored, does it.

Yes it does.

 

[Foxfyre]

I don't know Rabbi...

After I looked at the fourth paragraph of "Dynamic Scoring: Not so fast" it says,

The JCT has done similar studies of other tax options, as well. The Congressional Budget Office (CBO) also routinely conducts dynamic analyses.

Also in the first link it says congress has made increasing something or other for dynamic scoring, which to me clearly reads as "They have been getting better and better at it" and not, "They aren't getting any and put more and more pressure from it."

I am sure that they have a good level of dynamic scoring and not just static scoring.

Yes that is called raw data. Of course they have it correctly to them.



No the data is just data. The analysis is what we are talking about being the static or dynamic system.



Dishonest together?



Actually it says that tax hikes and spending cuts relieve the debt to a certain extent and that spending cuts are twice as important as tax increases, hardly what Barack Obama or Republicans probably wants to say. I said this in my first post.

So it really doesn't matter how anything is scored, does it.

Yes it does.

Yes dishonest together, and no, the Republicans are not exempt from that either. The point is, that as long as they use static methods for scoring, and baseline budgeting methods to determine spending, it doesn't matter how anything is scored. Can you name any significant spending program that has EVER even remotely resembled the CBO scoring after it was all said and done? Or any program that they ever looked back at the original scoring and said, wow, we sure got that wrong.

Nope they just use the new amount to budget for the next round of spending. And that is true even if something was budgeted to be a one time expenditure. Don't need as much money in Iraq? It is never, well we don't have to spend that now. It is, well, we have all that savings now to spend on something else.

Cut spending a trillion dollars over the next 10 years? That is $100 billion per year against $1 trillion deficits as far as the eye can see. Cut spending $5 trillion over 10 years? That would cut the deficitt in half assuming that new spending was not added at the other end. Which it always is.

And even if future Congresses honor the intent, budget cuts are illusionary because it is cuts from a budget developed from the baseline; i.e. the current year's expenditures. It is a presumed reduction in the projected increase and not a real cut at all.

 

[catatomic]

I understand your disillusionment but I'm not convinced it's so static.