Paul Ryan and Dynamic Scoring

[ClydeR]

After the midterms and before the 2016 presidential election, what will we talk about? If that question has been causing you to worry, then fret no more. Paul Ryan has a plan that will be a fountain of conversation topics, and it will probably bleed into the presidential election.

Assuming Republicans maintain control of the House in the upcoming midterms, then Ryan will become chairman of the House Ways and Means Committee next year, replacing current Chairman Dave Camp of Michigan. Camp could never put together a tax cutting proposal because he was bad at math. Ryan, however does not have that problem.

Ryan has already announced how he will cut taxes and reduce the deficit at the same time. It's called "dynamic scoring." Historically, Congress used "static scoring" in its budget projections. Static scoring forecasts the consequences of cutting taxes without taking into account the secondary effects of tax cuts. Dynamic scoring is more sophisticated. In addition to forecasting the revenue effects of tax cuts, dynamic scoring also forecasts how people will react to the tax cuts and how those reactions will affect tax collections and then how people will react to that and so on.

Ryan has determined that if we reduce the top tax rate to 25% as he wants to do, then the dynamically scored result will be exactly the amount needed to balance the budget. He has it listed on a separate line "macroeconomic fiscal impact" in his budget in the amount of $175 Billion.

http://washingtonexaminer.com/paul-ryan-were-working-to-change-the-rules-for-tax-reform/article/2553609

http://fivethirtyeight.com/datalab/an-unusual-accounting-move-in-paul-ryans-budget/

[Latrinsorm]

New topic: when did Republicans become associated with defense spending? Hopefully we're all aware that this has little to do with actual defense and is primarily a way for Congressfolk to funnel federal dollars to their electorate.

http://www.project.org/images/graphs/Spending_by_Catagory.jpg

Defense spending in real dollars decreased gradually in every year of the Nixon administration, increased gradually into the Reagan administration before exploding in the mid-80s, tumbled under Bush Sr., and exploded again under Bush Jr. and Obama, peaking in 2010. I emphasize Nixon because while we obviously had wars (of a kind) going on in the two explosions, we were also at war (of a kind) under Nixon and he managed to reduce defense spending.

Therefore it's Reagan's fault. First high fructose corn syrup, now this? What a dick.

[Androidpk]

New topic: when did Republicans become associated with defense spending? Hopefully we're all aware that this has little to do with actual defense and is primarily a way for Congressfolk to funnel federal dollars to their electorate.

http://www.project.org/images/graphs/Spending_by_Catagory.jpg

Defense spending in real dollars decreased gradually in every year of the Nixon administration, increased gradually into the Reagan administration before exploding in the mid-80s, tumbled under Bush Sr., and exploded again under Bush Jr. and Obama, peaking in 2010. I emphasize Nixon because while we obviously had wars (of a kind) going on in the two explosions, we were also at war (of a kind) under Nixon and he managed to reduce defense spending.

Therefore it's Reagan's fault. First high fructose corn syrup, now this? What a dick.


An excellent post by Latrinsorm. I look forward to ClydeR's rebuttal.

[ClydeR]

As chairman of Ways and Means, Ryan will have the authority to produce legislation to implement those ideas. He replaces retiring Rep. Dave Camp (R-Mich.), who declined to pursue Ryan’s Medicare plan when it became a political hot potato in 2011. Earlier this year, Camp released a tax reform draft that showed the enormous difficulty of achieving Ryan’s goal of getting tax rates down to 25 percent.

Ryan has said it would be easier to hit that target if the Congressional Budget Office used a process called “dynamic scoring” to measure broad effects on the economy when judging tax legislation. While CBO already uses dynamic scoring on a limited basis, Ryan said Wednesday he will have additional recommendations in the new Congress “for making sure we take these things into consideration.”

More... (http://www.washingtonpost.com/blogs/wonkblog/wp/2014/11/19/paul-ryan-obama-already-hurting-chances-for-2015-cooperation/)

Just as I predicted.



We’ve been here before. A midterm election has handed Republicans control of both chambers of Congress, and at the top of their to-do list is getting the staff of the Joint Committee on Taxation to adopt dynamic scoring. It happened at the beginning of the 104th Congress in 1995, and all indications are that it will happen again at the beginning of the 114th in January.

Dynamic scoring refers to a way of doing revenue estimates that is different from conventional scoring done by the staff of the JCT. Currently, the JCT staff–the official scorekeeper of changes in federal tax law–assumes tax legislation does not affect the size of the economy. But if a tax cut or tax reform increases economic growth, that growth will reduce the revenue loss from any tax change because a larger economy produces more revenue.

More... (http://www.forbes.com/sites/taxanalysts/2014/11/11/your-quick-guide-to-dynamic-scoring-in-the-next-congress/)


I just hope Orin Hatch doesn't mess it up in the Senate..


Dynamic scoring, Hatch said during a speech sponsored by the American Action Forum and the Tax Foundation, is “not a panacea.”

“While I’d like to tell you that tax cuts always more than pay for themselves, or maybe even that tax cuts cure influenza, I’m sad to have to tell you that just isn’t the case,” Hatch added.

But he also said that more dynamic scoring rules need to be in place for when the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) consider broad policy changes to areas like immigration or the sort of overhaul of the tax code that Republicans are seeking.

Any argument otherwise, Hatch insisted, is “downright dumb,” arguing that dynamic scoring had to have a place in judging tax reform proposals.

More... (http://thehill.com/policy/finance/224391-hatch-strikes-measured-tone-on-dynamic-scoring)

[ClydeR]

"I prefer to call it reality-based scoring," Rep. Paul D. Ryan (R-Wis.), the incoming chairman of the tax-writing Ways and Means Committee, said in a recent speech to financial executives.

He and other Republicans said the current process fails to take into account the idea that tax cuts can increase economic growth — and therefore government revenue — by encouraging businesses and individuals to invest more.

"We can do so much more in measuring effects of tax changes," Ryan said.

But Democrats have their own description of dynamic scoring. They call it voodoo economics, a term dating to the Reagan administration's trickle-down economic theory in the 1980s, holding that more money for the wealthiest eventually makes its way to everybody else.

More... (http://www.latimes.com/business/la-fi-congress-budget-math-20141129-story.html)

Republicans' quarter century wait for dynamic scoring is nearly over.

[Warriorbird]

Voodoo economics triumphant.

[ClydeR]

(Bloomberg) -- Incoming Republican leaders in Congress won’t reappoint Doug Elmendorf to another term as head of the Congressional Budget Office, according to a party aide briefed on the decision.

The move comes after a campaign from conservative lawmakers who want to change the way the CBO calculates the costs of government, said the aide, who requested anonymity to discuss a personnel decision. The office provides nonpartisan budget analysis for members of Congress that includes estimates of the cost of legislation.

More... (http://www.bloomberg.com/politics/articles/2014-12-22/cbo-chief-elmendorf-said-not-to-win-reappointment-by-republicans)

It begins. Budget surpluses through tax cuts.

[Candor]

Ryan has already announced how he will cut taxes and reduce the deficit at the same time. It's called "dynamic scoring." Historically, Congress used "static scoring" in its budget projections. Static scoring forecasts the consequences of cutting taxes without taking into account the secondary effects of tax cuts. Dynamic scoring is more sophisticated. In addition to forecasting the revenue effects of tax cuts, dynamic scoring also forecasts how people will react to the tax cuts and how those reactions will affect tax collection...


Ryan has a valid point, but the idea that you can balance the budget of the United States using solely this approach isn't going to work unless the entire country is propelled into The Twilight Zone. Rod Serling, where are you?

[Back]

http://www.leedems.org/wp-content/uploads/2012/07/wealth-will-trickle-down.jpg

[Parkbandit]

http://www.leedems.org/wp-content/uploads/2012/07/wealth-will-trickle-down.jpg

LOLOL

Now I KNOW you've experienced this... probably every day of your life.

7144

[Warriorbird]

LOLOL

Now I KNOW you've experienced this... probably every day of your life.

7144

Hipster Hawaiian shirt wearing shadow is indeed very Backlash.

[ClydeR]

This will make it much easier to pass tax cuts.


Republicans to push ahead on new math for U.S. taxes, budget
Wed, Dec 31 2014
By Kevin Drawbaugh

WASHINGTON (Reuters) - As Republicans assume control of the entire U.S. Congress in the new year, they are expected to push a controversial change to use more macroeconomic projections in determining the impact of tax and budget legislation on the federal deficit.

Critics say wider use of "dynamic scoring," as the Republican-favored approach is known, would introduce new uncertainties into fiscal policy and degrade the value of present analysis now done by Capitol Hill staff experts.

Republican advocates argue it would make fiscal analysis better reflect what they call economic realities. Dynamic scoring, as they envision it, would assumes that lower tax rates boost growth, offsetting some lost revenue.

The "scoring" of tax and budget bills matters because it can influence whether a bill becomes law. Lawmakers shy from measures that would balloon the deficit. So any math that makes scores look less worrisome has political appeal.

More... (http://www.reuters.com/article/2014/12/31/us-usa-tax-dynamic-idUSKBN0K917I20141231)

[ClydeR]

It's done. New Math for a new Congress.

In the last Congress, Republicans tried to create a tax reform package that cut tax rates and offset the cuts by reducing tax preferences by the same amount. That proved impossible. New Math will allow cutting tax rates without the need to tamper with tax preferences that have vocal constituencies.

[Thondalar]

It's done. New Math for a new Congress.

In the last Congress, Republicans tried to create a tax reform package that cut tax rates and offset the cuts by reducing tax preferences by the same amount. That proved impossible. New Math will allow cutting tax rates without the need to tamper with tax preferences that have vocal constituencies.


Do some more research...this has been going on since the Reagan era...it's really nothing new.

[ClydeR]

Do some more research...this has been going on since the Reagan era...it's really nothing new.

Not so. Certain People have been trying to change the budget rule for that long, but this is the first time it has passed.

[Thondalar]

Not so. Certain People have been trying to change the budget rule for that long, but this is the first time it has passed.

In various iterations it has previously passed, but not as it's currently stated...you're right in that, but I'm also right in my point that it's been on the boards for that long.

[ClydeR]

In various iterations it has previously passed, but not as it's currently stated...you're right in that, but I'm also right in my point that it's been on the boards for that long.

Two people who disagree cannot both be right. That's now how the universe works.

[Gelston]

ClydeR has never denied being a pedophile.

[ClydeR]

Marco Rubio's new tax plan (http://www.forbes.com/sites/anthonynitti/2015/03/08/reviewing-the-rubio-lee-proposal-for-tax-reform/) shows how dynamic scoring will work. Under static scoring, Rubio's plan would reduce revenue collected by the federal government by $414 billion per year, but under dynamic scoring (http://thehill.com/policy/finance/235112-rubio-tax-plan-would-spur-economic-growth-study), it would increase revenue collected by the federal government by $94 billion per year. There's more than a $500 billion difference between the static and dynamic scores. For reference, our federal budget deficit in 2014 was $483 billion.

The main thing Rubio's plan does is reduce corporate tax rates, eliminate taxes on capital gains and interest, and allow immediate expensing of purchases by businesses of inventory and equipment.

For personal income taxes, Rubio's plan raises the lowest rate from 10% to 15% and decreases the top rate from 39.6% to 35%. That's fair because it affects both the top and bottom rates. And of course, individuals won't have to pay taxes anymore on capital gains or interest income.

[ClydeR]

Republican Senator Bob Corker last week announced his retirement at the end of his current term. Today on Meet the Press, he announced that he will not vote for the Republican tax plan if it increases the deficit, but he said he would allow dynamic scoring to determine if it adds to the deficit.


And I'm willing to accept a reasonable score on dynamic growth. A reasonable score on dynamic growth. Joint tax does those. There're some other groups that do it. But if it looks like to me, Chuck, we're adding one penny to the deficit, I am not going to be for it, okay? I'm sorry. It is the greatest threat to our nation. The greatest threat to our nation.

It's like, Chuck, we've entered a party atmosphere here. You know, everybody was a fiscal hawk, kind of. Not really, but kind of, up until the election.

Now, it's like there's a party going on up here, okay? Heck with revenue. Heck with, you know, constraining spending. So yes, I will remain a deficit hawk until I leave here. And I’m looking so forward to this tax reform debate because the one thing that hasn’t been discussed is the four trillion dollars in base broadeners that have to occur for this to be successful, and every lobbyist in the world is gonna be up here fighting those.

More... (https://www.nbcnews.com/meet-the-press/meet-press-october-1-2017-n806371)

[Gelston]

ClydeR has never denied being a pedophile.

He still hasn't.