Tags: bills | economy | dynamic scoring | impact | tax reform

GOP 'Dynamic Scoring' Rule Change Eases Way for Tax Reform

By    |   Wednesday, 07 Jan 2015 08:28 AM

On the first day of the new session of Congress, Republicans approved a rule change that would require all pieces of major legislation to outline the projected impact on the economy.

According to The New York Times, the change, known as "dynamic scoring," will likely have the most impact on the passage of tax cuts as Republicans embark on an agenda of tax reform in the new Congress.

"We're saying, 'If you think a piece of legislation is going to have a big effect on the economy, then include that effect in the official cost estimate,'" Georgia GOP Rep. Tom Price, the new chairman of the House Budget Committee, told the Times.

"So if you think a bill is going to help or hurt the economy, then tell us how much."

The new rule would require nonpartisan congressional scorekeepers — the Joint Committee on Taxation and the Congressional Budget Office — to make a calculation about how major bills will affect the size of the economy, and specifically those measures whose effect could exceed 0.25 percent of the gross domestic product within a 10-year time frame, or in excess of $42 billion.

The House Budget Committee and Ways and Means Committee also have the discretion to require it for other select legislation.

Republicans have been pushing for the change since the 1990s, but Democrats are against it. Some say that the scorekeeping would be politicized and the resulting tax reform will benefit the Republicans' tax agenda.

Shaun Donovan, White House budget director, called for the House not to "upend the level playing field that has existed for decades" and "call into question the accuracy, consistency, and fairness" of the budget estimates.

Others suggest that the exercise is purely theoretical and not possible to make accurate projections.

"The basic problem remains that macroeconomic work is useful in the laboratory but not in the field," Edward Kleinbard, a law professor at the University of Southern California and a longtime chief of staff at the congressional Joint Committee on Taxation, told the Times.

"The models are too simplistic and the range of the possible outcomes so great that it opens the process to too much in the way of political intuitions."

The rule change will not apply to the annual economic stimulus bills, such as infrastructure or education bills.

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On the first day of the new session of Congress, Republicans approved a rule change that would require all pieces of major legislation to outline the projected impact on the economy.
bills, economy, dynamic scoring, impact, tax reform
386
2015-28-07
Wednesday, 07 Jan 2015 08:28 AM
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