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-r...rticle/2553609

http://fivethirtyeight.com/datalab/a...-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.



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.



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.”

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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.

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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.

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[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.

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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.

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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?

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[Parkbandit]

LOLOL

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

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