GOP congressional majority likely to change way it crunches numbers
The incoming Republican majority in Congress is preparing to give number-crunching a controversial twist, and the new math could make it easier for the GOP to cut taxes.
For years, leading GOP lawmakers have wanted to change the way that the nonpartisan congressional staff calculates or, in Washington parlance, scores the budgetary cost of changes to the tax code.
Budget scoring now is fairly straightforward: Just figure out how much more money a tax increase would produce for the Treasury or how much a tax cut would cost in lost revenue.
Republicans, however, want two key congressional offices to use complex models to try to predict the broader effect of hikes and cuts on the economy. The process is called dynamic scoring.
"I prefer to call it reality-based scoring," Rep. Paul D. Ryan (R-Wis.), the incoming chairman of the tax-writing Ways and Means Committee, said in a recent speech to financial executives.
He and other Republicans said the current process fails to take into account the idea that tax cuts can increase economic growth and therefore government revenue by encouraging businesses and individuals to invest more.
"We can do so much more in measuring effects of tax changes," Ryan said.
But Democrats have their own description of dynamic scoring. They call it voodoo economics, a term dating to the Reagan administration's trickle-down economic theory in the 1980s, holding that more money for the wealthiest eventually makes its way to everybody else.
"What's dynamic about it?" asked Rep. Sander M. Levin (D-Mich.), the panel's top Democrat. "It can backfire."
The Congressional Budget Office and the Joint Committee on Taxation produce cost estimates for legislation that typically assume the overall size of the economy and the workforce remain fixed. That provides a baseline with which to compare different types of legislation.
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GOP congressional majority likely to change way it crunches numbers