Senate Releases Summaries of Tax Extenders Bill; Joint Tax Committee's Dynamic Scoring Says Bill Will Cover 11% Of Its Costs

The Senate Finance Committee yesterday released updated summaries (here and here) of the committee-passed tax extenders legislation (S. 1946). In connection with the bill, the Joint Committee on Taxation released A Report To The Congressional Budget Office Of The Macroeconomic Effects Of The “Tax Relief Extension Act Of 2015”.

Bloomberg, Tax Cut Pays Part of Its Way in Test of Republican Scoring:

A bipartisan U.S. Senate bill that would revive and extend dozens of lapsed tax breaks would spur economic growth and cover about 11 percent of its own costs, according to Congress’s nonpartisan scorekeeper.

The analysis released Tuesday is an early test of Republicans’ focus on what’s known as dynamic scoring. It refers to the principle that legislation can be significant enough to change the size of the economy and affect the U.S. budget.

Republicans say that’s a more accurate way to study bills, and they’ve changed budget rules to include the analyses. Democrats are dubious, citing the uncertainty of projections.

Jared Bernstein (Center on Budget and Policy Priorities), Dynamic Scoring in Action: Unwarranted Certainty:

First, let’s be clear: no one’s accusing the able analysts at the JCT of cooking the books. They’re applying a model that they believe most accurately meets the demands of the Congress.

But there is something very important missing from the analysis: a range of estimates, based on plausible assumptions that differ from the ones they chose to highlight. ... I urge JCT and CBO to at least provide us with a range of estimates to supplement the single official dynamic estimate that Congress now requires. Let’s be as transparent as we can be about the uncertainties inherent in this exercise.

Tim Worstall (Forbes), Jared Bernstein Speaks With Forked Tongue On Dynamic Scoring:

This is a fairly standard political ploy being essayed by Jared Bernstein here.

He’s talking about the horrors of using dynamic scoring to estimate the change in tax revenues from a change in tax rates. This might all sound like a very reasonable argument if you see it in isolation. The economy is a complex thing, we don’t really know what happens out there in the chaos of said complexity and so we’dd better not assume things that we don’t really know will happen. Hmm, OK: except Bernstein, along with multitudes of others, is entirely happy to use exactly the same tactic when it’s about a policy he supports. That is, he’s speaking with forked tongue on the subject: and how surprised we are to find that happening in politics, eh?

• American Legislator, CBO Adopts Dynamic Scoring; States Should Follow
• The Hill, 'Dynamic' Impact of Tax Cut Bill: $10.4B
• Tax Foundation, Four Reasons Why We Need Dynamic Scoring