House Republicans are moving to increase the use of dynamic scoring through a rules change that would require long-term estimates of the economic effects of major legislation.
The macroeconomic estimates required under the rule would include the projected effects of legislation on economic output, employment and capital stock, resulting in an assessment of how a proposal would cause the economy to expand or contract.
Still unclear is the extent to which the estimate prepared by the Congressional Budget Office or Joint Committee on Taxation would become the official score, or if it would remain a supplementary score. But based on conversations with budget experts, it appears that the decision would rest with the House Budget Committee chairman or JCT chairman or vice chairman.
"Since this is just a House rule, I would conclude it is still a score that would be left up to the Budget Committee and JCT chairs to apply or not," said G. William Hoagland, senior vice president of the Bipartisan Policy Center. The House and Senate Budget committees have authority under the budget law to determine the score or estimated cost of legislation, though they generally rely on CBO or JCT.
Even though the change would be significant, it would not necessarily affect much legislation. because a proposal would generally have to produce a change in revenue, spending or deficits equal to or greater than .25 percent of gross domestic product to qualify for a macroeconomic score.
The CBO generally does not estimate whether legislation would expand or reduce the size of the economy, though it has produced macroeconomic analyses of some bills in the past. Under an existing rule, the JCT prepares supplementary analyses of tax legislation. The proposal would require the CBO and JCT "to the extent practicable" to incorporate the macroeconomic effects of major legislation into their official cost estimates.
The rule defines major legislation as any proposal that would have a budgetary effect equal to or greater than .25 of projected gross domestic product in any fiscal year covered by the budget resolution. Based on current GDP, .25 percent is about $45 billion.
The rule would also allow the House Budget chairman, or in the case of revenue legislation the chair of vice chair of the JCT, to designate other mandatory spending or tax proposals as major legislation requiring a dynamic score.
The estimate would include a "qualitative assessment" of the budgetary effects of legislation in the 20-year period following the customary 10-year window covered by the budget resolution.
The rule is patterned on legislation (HR 1874) by incoming House Budget Chairman Tom Price, R-Ga., that the House passed earlier this year. Price's more limited proposal would have required the CBO to prepare a supplementary macroeconomic analysis for legislation with an estimated budget impact equal to .25 percent of the GDP.
Chris Van Hollen of Maryland, the ranking Democrat on the House Budget Committee, slammed the proposed rule.
"The Republicans’ ‘trickle down’ economic theory – that tax cuts for the wealthy will eventually trickle down to the middle class – has a long and proven record of failure. Yet they are at it again, and now they are rigging the rules against working families and hiding the true costs of their agenda," he said. "Make no mistake: ‘dynamic scoring’ is little more than an attempt to open the door to political manipulation of the budget process and impose debunked trickle-down theories.”
The rule package is scheduled to go before the House GOP conference at 5:30 p.m. on Jan. 5.