Thursday, January 8, 2015

GOP House Requires CBO To Use Dynamic Scoring On Tax Bills

As predicted, one of the first actions taken by the GOP House was to require the Congressional Budget Office to dynamically score tax policy changes.  The problem with dynamic scoring is that it almost impossible to determine the economic impact of a change in tax policy.  The GOP would like to cut taxes and use dynamic scoring to argue that the tax cut would not increase the federal budget deficit.  The dynamic scoring would show that the tax cuts produced enough economic growth to replace the tax revenue lost by the tax cut.  They will not allow dynamic scoring to be used to show that an increase in federal spending, for example on infrastructure, will pay for itself by stimulating economic growth.  The director of the CBO, who will be appointed by the GOP House, will be the judge in measuring the economic impact of tax cuts.  The fox will be put in charge of defending the hen house.

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