Democratic Presidents bring down Deficits and Republican Presidents make larger deficits.
Given the hyper-partisan atmosphere in Washington, it doesn’t
come as too big a surprise that the first day of the new Congress would
start on a contentious note. But it’s nevertheless amazing to watch
lawmakers argue, not over how much things cost, but over how to determine how much things cost.
After the drama of electing a new speaker of the House and the changing of control in the Senate, the House on Tuesday approved an obscure but significant rule change requiring the economic effects of legislation to be included in a bill’s official cost to the Treasury.The change on “dynamic scoring” – ardently sought since the 1990s by Republicans – could ease passage of major tax cuts by showing that their impact on economic growth would substantially reduce their cost to the Treasury. The move is widely seen as a way for Republican leaders to set ground rules for an ambitious overhaul of the entire United States tax code.
In short, dynamic scoring could make it easier for Congress to fashion a tax reform package that appears revenue neutral, on the basis of questionable and uncertain growth estimates. If those effects then failed to materialize, the increased deficits would worsen the nation’s long-run fiscal problems and, in so doing, could actually create a drag on future economic growth, as CBO and JCT have explained.
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