June 24, 2013

The Odd Politics of Dynamic Scoring

Andrea O'Sullivan

Feature Writer
Summary

With trillions of taxpayer dollars on the line each year, the way Washington chooses to crunch its numbers matters – a lot. Subtle differences in economic assumptions, methodologies and priorities that inform annual budget choices can have dramatic effects on spending and revenue decisions.

With trillions of taxpayer dollars on the line each year, the way Washington chooses to crunch its numbers matters – a lot. Subtle differences in economic assumptions, methodologies and priorities that inform annual budget choices can have dramatic effects on spending and revenue decisions.

For this reason, the decades-long fight over how Congress' bills are "scored," or how a bill's budgetary impact is estimated, has been characterized as the "Civil War of revenue estimating reform." The debate boils down to "static scoring," the status quo, versus "dynamic scoring," which incorporates unknown but anticipated feedback effects.  

For the Senate's recently proposed immigration bill, the Congressional Budget Office uncharacteristically performed two dynamic scores of the legislation, instead of a traditional static score. The CBO assumed, as it did for the proposed 2006 immigration bill, that adding millions of laborers into the U.S. economy will have a positive effect on economic growth. Including this behavioral assumption in the legislative analysis – a key feature of dynamic scoring – aims to provide a more realistic picture of the effects of major legislation on the broader economy.

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