How Republicans want to change the budget math

The first big fight of the new GOP-controlled Congress began before 2015 even started.

Shortly prior to Christmas recess, Republicans introduced a new change to the House rules that would alter the way the cost of tax legislation is calculated, potentially changing the price tag for one of their biggest priorities in the new Congress. What’s more, GOP leaders are reportedly prepared to dump the House’s official scorekeeper to help make it happen — a move that Harry Reid’s spokesman Adam Jentleson warned could turn it “from the impartial referee it’s always been into a right-wing ideological organization.”

The GOP’s proposed change, known “dynamic scoring,” is the kind of wonky issue that rarely draws an audience outside of the Beltway, but which Republicans have rallied behind for decades. Typically, the official cost of proposed legislation doesn’t factor in the impact that it would have on the broader economy. The rationale is that broader macroeconomic variables are difficult to predict, and outcomes can vary widely depending on the assumptions made.

Republicans believe that it’s unrealistic and inaccurate to assume that legislation will have no effect on the broader economy — particularly when it comes to the tax cuts that are the GOP’s raison d’être. Tax cuts, they argue, can stimulate broader economic growth and increase revenue.

When the JCT used the approach to evaluate outgoing Ways and Means Chair Dave Camp’s tax plan, it found it would raise between $50 billion to $700 billion in additional revenue. That could make it easier for Republicans to cut taxes further while claiming such proposals are revenue-neutral, WSJ’s David Wessel points out.

Both moves have alarmed Democrats, who warn that Republicans will try to use dynamic scoring to mask the real cost of tax cuts and other GOP priorities. “Are Republicans trying to cook the books so they can hock tax cuts for the rich as something other than the system-rigging, anti-middle class budget busters they actually are?” Reid’s spokesman Jentleson wrote, shortly after Bloomberg’s report on Elmendorf.

“Imposing ‘dynamic scoring’ on Congress’ scorekeepers isn’t just an accounting issue. It favors windfall tax breaks to the very wealthy and big corporations who can hire high-priced, well-funded lobbyists,” Rep. Chris Van Hollen, the highest ranking Democrat on the Budget Committee, said in a statement. He added: “Republicans are trying to cook the books and hoping Americans won’t notice.”

Not all on the right agree with the GOP’s strategy. Prominent conservatives have risen to defend Elmendorf. “I think he’s done a great job — he deserves credit as being one of the top one or two CBO directors of all time,” says Doug Holtz-Eakin, who served as CBO director in the Bush administration. Others on the right warn Republicans against politicizing an office that’s traditionally been considered a fair, non-partisan scorekeeper.

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