Rep. Paul Ryan would love tax reform based on "dynamic scoring" because
it can to be used to make his screw-the-average-American proposals look beneficial.
From their new majority perch in Congress, Republican lawmakers are eager to mandate a change in the way the Congressional Budget Office evaluates the potential impact of tax legislation on federal revenue. To get their way, they may
dump CBO chief Douglas Elmendorf, who has held the post since 2009.
The evaluation technique they prefer, and that the CBO under Elmendorf has only occasionally used, is called "dynamic scoring." In a Friday New York Times op-ed headlined "A Republican Ruse to Make Tax Cuts Look Good," Law Professor Edward Kleinbard ripped the idea, saying it provides “…greater exposure to the risk of a political thumb on the scale.”
The CBO currently uses "static scoring" to make its evaluations of whether proposed legislation will raise more or less revenue than existing law. It's not actually "static," however. The office derives its scores from a look at current consumption trends and other possible changes from the tax changes being evaluated. But it does not include, Kleinbard writes, "any indirect feedback effects that tax law changes might have on overall national income. In other words, they do not incorporate macroeconomic behavioral changes."
But "dynamic scoring" does. And its backers claim it will provide better results. In fact, it opens the door to cherry-picking. You can expect the backers of tax cuts to favor the projected "dynamically scored" outcome that shows the greatest potential benefit from those cuts. But, as Kleinbard and other liberal critics argue, macroeconomic forecasts are highly uncertain. Conservatives like "dynamic scoring" because it means they can pretend that their tax plans don't need to raise as much revenue as static scoring shows because the indirect effects of economic growth from their legislation will bring more money into the Treasury. In other words, it's a scam.
Enter Democratic Reps. Chris Van Hollen of Maryland and Louise Slaughter of New York. In a Politico op-ed titled "‘Dynamic Scoring’ Cooks the Books" and sprinkled with populist points, they write that behind the proposed change is just more of the same old "trickle-down" and what George H.W. Bush once called "voodoo economics":
It may be tempting to dismiss this change as just an accounting issue. But they are rigging the rules in favor of windfall tax breaks to the very wealthy and big corporations who can hire high-priced, well-funded lobbyists—once again choosing to leave behind working families. Their plan would further distort the nation’s fiscal outlook by applying this scoring model only to tax cuts—not the economic impact of investments in education, healthcare, infrastructure, and other areas. That means that the value of tax cuts to the economy would be exaggerated, and the value of investments in the middle class would be undercut. […]
Put best by Bruce Bartlett, a former economic advisor to President Reagan, dynamic scoring “is not about honest revenue-estimating. It’s about using smoke and mirrors to institutionalize Republican ideology into the budget process.”
There's more about the Republicans' plan to cook the books below the fold.
Kleinbard notes that the drive for "dynamic scoring" of tax cuts plays into the rightists' playbook even when their prediction turns out to be wrong:
When revenues do in fact decline and deficits rise, those same proponents will push for steep cuts in government insurance or investment programs, because they will claim that the models demand it. That is what lies inside the Trojan horse of dynamic scoring.
Win, win for the one percent. Screw job for the 99.
Expect the Republicans—cue Rep. Paul Ryan—to be pushing hard over the next couple of years for tax reform. After decades of skewing the tax code ever more in favor of the wealthy, we certainly are in great need of reform. But that should be a back-to-the-future aggressively progressive tax system.
Which is 180 degrees from what the GOP has in mind. Rather they desire more of what we've been putting up with. Under Ryan's plan, for instance, millionaires would gain a windfall of $200,000. They intend to make "dynamic scoring" part of the propaganda arsenal deployed to get their way.