Browsing the blog archivesfor the day Saturday, January 3rd, 2015.


Cooking the Public Books

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Budget, Obama Administration, Republican Party

The phrase for today, boys and girls, is “dynamic scoring.” We’ll likely be hearing a lot about dynamic scoring when the new Congress convenes, because dynamic scoring is high on the Republican agenda.

What is dynamic scoring? This has to do with the Congressional Budget Office, the doggedly nonpartisan office that analyzes whatever Congress is up to that might impact the federal budget. The CBO has always used what’s called “static scoring,” which actually isn’t all that static, to make projections.  Edward D. Kleinbard, a law professor at the University of Southern California and a former chief of staff of the Congressional Joint Committee on Taxation, explains:

Whenever new tax legislation is proposed, the nonpartisan Congressional Budget Office “scores” it, to estimate whether the bill would raise more or less revenue than existing law would.

In preparing estimates, scorekeepers try to predict how people will respond to a new tax law. For example, if Congress contemplates raising the excise tax on cigarettes, scorekeepers consider existing trends in cigarette consumption, the likelihood that the higher taxes will induce some smokers to quit, and the prospect that higher prices will increase incentives for cigarette smuggling. There are no truly “static” revenue estimates.

How would dynamic scoring be more dynamic? Might I remind you this is a Republican idea? Could you guess if I told you Paul Ryan is a big fan of dynamic scoring? That’s right, folks — dynamic scoring adds an assumption that tax cuts will raise revenues.

So if Republicans get their way, future CBO projections will will filled with rainbows, unicorns and confidence fairies.

 A lot of Republicans also want to replace the CBO chief to appoint someone who will reliably give them analyses more to their liking. In other words, they want to “capture” the CBO and turn it into a propaganda tool for the Republican Party. Whether they’re going to get away with this isn’t clear. Note that they object to the current guy, Doug Elmendorf, not because CBO projections have been wrong, but because they don’t always fit right-wing narratives.

Elmendorf’s term actually ends today, but apparently he’s going to stay on the job until Congress decides what it is doing. This may take awhile.

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