Republicans to push ahead on new math for U.S. taxes, budget
By Kevin Drawbaugh
WASHINGTON Wed Dec 31, 2014 4:41pm EST
(Reuters) - As Republicans assume control of the entire U.S. Congress in the new year, they are expected to push a controversial change to use more macroeconomic projections in determining the impact of tax and budget legislation on the federal deficit.
Critics say wider use of "dynamic scoring," as the Republican-favored approach is known, would introduce new uncertainties into fiscal policy and degrade the value of present analysis now done by Capitol Hill staff experts.
Republican advocates argue it would make fiscal analysis better reflect what they call economic realities. Dynamic scoring, as they envision it, would assumes that lower tax rates boost growth, offsetting some lost revenue.
The "scoring" of tax and budget bills matters because it can influence whether a bill becomes law. Lawmakers shy from measures that would balloon the deficit. So any math that makes scores look less worrisome has political appeal.
Scores currently are based on projected alterations in behavior due to changes in tax law and the budget, but not on changes in the broad economy. For instance, standard JCT scores hold gross domestic product (GDP) constant. GDP measures the economy's total output.
Dynamic scoring, as Republicans urge, would include more projected macroeconomic impacts.
Wednesday, December 31, 2014
Instead of taking a "he said, she said" approach to this story, Reuters decided to go with reality:
Posted by Steve J. at 6:52 PM