House says budget should reflect economic impacts

AP News
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Posted: Feb 02, 2012 5:47 PM
House says budget should reflect economic impacts

The House on Thursday voted to take a "dynamic scoring" approach to assessing how legislation affects the economy, a budgetary method that Republicans say will help lawmakers make good decisions but Democrats say is a gimmick aimed at justifying tax cuts.

The bill would direct the Congressional Budget Office to draw up estimates of how major legislation would impact such economic factors as gross domestic product, business investment and employment. The analysis would be in addition to the CBO's traditional estimates of the costs of legislation.

Under the measure, the CBO analysis must include an estimate of the legislation's potential fiscal impact, including how economic changes influence tax revenues.

The bill's sponsor, Rep. Tom Price, R-Ga., said that by providing lawmakers with more information, "this bill will also encourage pro-growth policy ideas from all of our colleagues that will help get our economy back on track."

But Democrats said "dynamic scoring" was simply a means for Republicans to understate the negative impact of tax cuts. Republicans have long argued that tax cuts ultimately stimulate economic growth.

Democrats also said the bill was written so as to exclude some assessments of how investments in such area as infrastructure impact the economy, and would not include an analysis of the effect of continuing the George W. Bush tax cuts of 2001 and 2003.

The bill passed 242-179, but it faces an uncertain future in the Senate.

The dynamic scoring bill is one of 10 the House Budget Committee has prepared in an attempt to fix what its chairman, Rep. Paul Ryan, R-Wis., calls a broken budget process. Others would take such steps as imposing binding limitations on spending, giving the president a line-item veto on spending measures, adopting a biennial budgeting system and enacting automatic steps to avoid government shutdowns when Congress can't agree on annual spending bills.

On Friday the House is to vote on legislation to eliminate a requirement that the CBO assume that spending will rise every year because of factors such as inflation and population growth.