Republicans press for change in how CBO tallies cost of legislation
Republicans press for change in how CBO tallies cost of legislation
The 119th Congress is seated and getting on with the business of governing, with tax policy at or near the top of the agenda. But extending the expiring provisions of the 2017 Tax Cuts and Jobs Act, which the GOP wants to do, looks like it would cost about $4 trillion over the 10-year period the Congressional Budget Office likes to use in its estimates.
But many Republican officeholders don’t love that number, so some are pushing for the CBO to change its math.
One way to make an expensive piece of legislation look cheaper — on paper, at least — is a practice called dynamic scoring.
Normally when the Congressional Budget Office is “scoring” the cost of legislation, “CBO takes into account how individuals would respond to policies, but they don’t take into account the effect on the larger economy,” said Chris Towner of the Committee for a Responsible Federal Budget, a Washington think tank.
“But the way that tax cuts, especially, work and especially changes in tax policy that are very large, is they do affect the broader economy quite a bit,” he said.
So groups like the Republican House Freedom Caucus want estimates of economic growth to be factored in, offsetting some of the cost.
“Dynamic scoring is a way of estimating the costs of tax cuts by taking into account the feedback effects that tax cuts have on the economy,” said Philip Rocco, a political science professor at Marquette University.
The problem with this strategy, Rocco argued, is that if politicians still don’t like the number that comes out, they’ll complain that the scoring wasn’t dynamic enough and again dismiss the cost.
Another way to change the price tag on a bill? Act like it doesn’t have one by asking the CBO to base its cost estimates on current policy, with tax cuts in place, rather than post-expiration numbers.
“Members of Congress who are about to vote for legislation that would make deficits bigger don’t want to admit that,” said former CBO Director Douglas Elmendorf, now a Harvard University professor.
He said he gets why this is attractive.
“If they can get CBO to produce some report that sort of calls a big number a small number or zero, then that avoids their having to admit publicly that what they’re doing is making the deficit bigger,” he said.
But it’s risky for Congress to push CBO to change its math just because they don’t like the numbers, Elmendorf said.
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