The long-held Republican goal of requiring that the controversial practice of dynamic scoring become part of standard budget analysis took a small step forward Wednesday when Ohio Sen. Rob Portman introduced the Accurate Budgeting Act, which would require the Joint Committee on Taxation to issue a dynamic score of all major tax legislation.
Dynamic scoring is the practice of estimating the long-term macroeconomic effects of government actions, and reflecting them in the budgetary score – roughly the cost – of proposed legislation. Republicans embrace dynamic scoring, in large measure, because of their belief that tax cuts stimulate economic growth.
The practice is controversial, though, because economists, in general, don’t believe that dynamic scoring can produce reliable forecasts. In a recent interview, former Congressional Budget Office Director June O’Neill told The Fiscal Times that dynamic scoring introduced “innumerable problems” into the budget scoring process.
Portman, who serves on the Senate Budget and Finance Committees, said in a statement, “Our current tax code is onerous, complex, and is forcing American jobs overseas. To keep American jobs here at home and increase wages, we should reform our corporate income tax system by fixing the leaky plumbing.”
“Something holding back comprehensive tax reform is our current static revenue estimating system that fails to take into account the dynamic effects of the integrated and competitive global economy,” he said. “My Accurate Budgeting Act will allow legislators to make decisions based on real economic numbers rather than static, out-of-touch estimates that discourage reform.”
Portman’s move is far less aggressive than a change to House rules passed earlier this month. House Republicans will require CBO and JCT to produce actual budget scores based on dynamic scoring.
Portman, by contrast, is proposing only an advisory opinion from JCT.
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