Dynamic Scoring: Jeopardizes Budget Accuracy

Jul 28, 2015
Press Release
Republican Gimmick to Diminish Cost of Tax Cuts

WASHINGTON – Joint Economic Committee (JEC) Ranking Member Carolyn Maloney (D-N.Y.) Tuesday asserted that dynamic scoring is an  unreliable Republican budget gimmick designed to mask the real cost of tax cuts.

”There is a serious problem with dynamic scoring – it provides results that are highly uncertain, vary wildly, and could be subject to manipulation,” Maloney said. It “change(s) the rules of the game so my Republican colleagues can get the results they want.

“…An accurate and impartial method of dynamic scoring remains far beyond the reach of economists and budget analysts,” Maloney said. “Until those models improve vastly, there is little justification for using dynamic scoring on either tax bills or spending bills.

“The dynamic scoring rule serves only one purpose. It helps Republicans reach their Holy Grail:  rigging the rules so it’s easier for Congress to cut taxes.”

Dynamic scoring is a method of calculating the budgetary impact of major legislation by accounting for the macroeconomic effects on economic growth. Although dynamic scoring models can be applied to any kind of legislation, new rules on dynamic scoring passed in the House this year are designed to apply almost exclusively to large tax cuts.

The rules will not apply to discretionary spending, such as investments in education and research that could grow the economy.

Dynamic scoring would reduce the estimated revenue losses from tax cuts, imposing greater burdens on the budget deficit. Since no consensus exists among experts on how best to project long-term economic growth and the impact of taxes on the economy, analysts would have to rely on educated guesses.

“Dynamic models force analysts to make assumptions that are based more on theory and sometimes are wildly unrealistic,” Maloney said. “With dynamic scoring, budget analysts will be forced to choose between deeply flawed models.”

Read Congresswoman Maloney’s full statement here

Read the economic experts on dynamic scoring