House GOP leaders late Tuesday introduced a proposed rules change that would require the Congressional Budget Office (CBO) to apply “dynamic” scoring to major pieces of legislation in the next Congress.
Republicans, preparing to take full control of Congress, have said for weeks that they'll move to force the CBO to evaluate the macroeconomic impacts of fiscal proposals.
Under the new rule, the CBO and the Joint Committee on Taxation (JCT) would be directed to incorporate any macroeconomic effects of legislation into their scoring if the bill is expected to have a significant effect on the economy. The House Rules Committee and the full chamber will likely approve the proposed changes.
Top Republicans have said that "dynamic" scoring is, in the words of incoming House Ways and Means Committee Chairman Paul RyanPaul RyanHealthcare fight pits Trump against Club for Growth High drama for ObamaCare vote Freedom Caucus, Trump reach 'agreement in principle' on ObamaCare repeal bill MORE (R-Wis.), "reality-based." Currently, congressional scorekeepers try to account for how tax legislation can change people's behavior.
But in their officials scores, Congress's nonpartisan analysts don't project that a broad overhaul to the tax code would spur economic growth — and thus more revenue for the Treasury.
“This change will allow CBO and Joint Tax to include the non-partisan economic analysis they are already doing into the official scores,” a spokesman for the Rules panel said. “When the House considers major legislation that will have a significant impact on our economy, Members of Congress and the American people deserve the full picture from our budget scorekeepers."
For major legislation, such as tax reform, the CBO and the JCT would need to assess the budgetary effects of changes in “economic output, employment, capital stock and other macroeconomic variables," the proposal says.
The GOP plan specifically says the rule would only be applied to any spending or tax measures that have budget effects of more than 0.25 percent of gross domestic product, which they say would only amount to a handful of cases.
Democrats and liberals have questioned the use of dynamic scoring for years, saying those sorts of projections are highly uncertain.
But the move could be a boon for Ryan and incoming Senate Finance Committee Chairman Orrin HatchOrrin HatchOvernight Finance: US preps cases linking North Korea to Fed heist | GOP chair says Dodd-Frank a 2017 priority | Chamber pushes lawmakers on Trump's trade pick | Labor nominee faces Senate US Chamber urges quick vote on USTR nominee Lighthizer Live coverage: Day three of Supreme Court nominee hearing MORE (R-Utah), both of whom have made reforming the tax code a priority.
Rep. Dave Camp (R-Mich.), the current House Ways and Means chairman, released a broad tax reform proposal in February, for which the JCT included dynamic scores projecting that the plan would spark between $50 billion and $700 billion in new revenue over a decade.
But Camp did not use that new revenue to lower rates, at least one of the reasons Republicans didn't rush to embrace the proposal.
The news of the new GOP rules follows a report Tuesday that said Republicans won’t be reappointing CBO Director Douglas Elmendorf after his term expires on Jan. 3.
Elmendorf could be reappointed, but some conservative groups have been urging the GOP to use its majority advantage and choose someone with a conservative background to lead the nonpartisan office.
Republicans have complained the CBO has seldom used “dynamic” scoring to evaluate pieces of legislation, but just last week Elmendorf pointed out several instances where that approach was employed. The CBO, for example, has applied it to their analyses of the president’s budgets, GOP budget resolutions and the 2013 Senate immigration bill.
Updated at 11:23 p.m.