Dynamic Scoring (CRS Report for Congress)
| Release Date |
Jan. 21, 2015 |
| Report Number |
IN10215 |
| Report Type |
Insight |
| Authors |
Gravelle, Jane |
| Source Agency |
Congressional Research Service |
Summary:
H.R. [House Resolution] 5, which provides rules for the House of Representatives, requires the incorporation of macroeconomic effects in estimates of spending and tax legislation (excluding appropriations bills) reported by a committee. The rule would apply to legislation with an annual budgetary effect of at least 0.25% of projected gross domestic product (GDP) or as requested by the chair of the Budget Committee for spending measures or by the chair or vice chair of the Joint Committee on Taxation (the chair of the Ways and Means Committee) for revenue measures. This rule supplants the previous requirement for macroeconomic analysis of tax changes, which has usually presented a range of effects and been advisory. Under the new House rule, macroeconomic effects would be incorporated into official scores that drive budget rules associated with the budget resolution. The Congressional Budget Office (CBO) prepares cost estimates for spending, and the Joint Committee on Taxation (JCT) prepares estimates for tax measures. These agencies would continue to be responsible for each type of estimate and the feedback effect (the percentage change in revenue or spending due to changes in the size of the economy). Current revenue and spending estimates are not static: they reflect numerous behavioral responses to changes. Current rules, however, keep overall output (GDP) fixed. Previous advisory macroeconomic analysis has been characterized by considerable variation in the magnitude of effects. These variations arise from several sources.
