Cost Estimates for Major Legislation to Incorporate Macroeconomic Scoring. Subsection © requires the Congressional Budget Office and Joint Committee on Taxation, to the extent practicable, to incorporate the macroeconomic effects of “major legislation” into the official cost estimates used for enforcing the budget resolution and other rules of the House. The subsection requires, to the extent practicable, a qualitative assessment of the long-term budgetary and macroeconomic effects of “major legislation”, which is defined to cover legislation that causes a gross budgetary effect in any fiscal year covered by the budget resolution that is equal to or greater than 0.25 percent of the projected GDP for that year. This subsection also allows the chair of the Committee on the Budget, or in the case of revenue legislation the House member serving as the Chair or Vice Chair of the Joint Committee on Taxation, to designate “major legislation” for purposes of this rule.

This subsection also repeals the existing provision in clause 3(h)(2) of rule XIII that requires a macroeconomic impact analysis of revenue legislation, which is superseded by the new rule.

The House on Tuesday adopted a controversial rule to require macroeconomic scoring on major legislation in the new Congress, which opponents say will politicize impartial budget analyses.

The provision, part of the rules package that the House considers at the start of every new Congress, passed largely along party lines by a vote of 234-172. Rep. Mick Mulvaney (R-S.C.) voted "present."

So-called "dynamic scoring" typically offers a more favorable view of cutting taxes, which is part of why Republicans support the method,

GOP lawmakers argued that emphasizing macroeconomic scoring, which factors in economy-wide impacts like the rates of inflation and employment, simply provided a more comprehensive assessment of a bill's impact on the federal budget.

It was left to later Republicans to "end welfare as we know it". The social security system of retirement benefits was actually strengthened by a bi-partisan report which called for higher taxes and a later retirement age.

George Bush senior famously called Mr Reagan's ideas "voodoo economics" before he became vice-president of the United States. While challenging Mr Reagan in the Republican presidential primaries, he said he did not believe that supply-side reforms like ending regulation would be enough to rejuvenate the economy.

Including macroeconomic feedbacks in the cost estimate for a budget or tax reform proposal would impair the credibility of both the proposal and the budget process itself. Congressional leaders could cherry-pick the model and assumptions that give the most favorable estimates.

Chairman Camp, for example, chose to tout the JCT’s most optimistic estimate of the revenue his plan would generate, which was more than ten times larger than the most modest results. He also relied on estimates of the plan’s distributional impacts that omitted the cuts in transfer programs (a category that includes programs such as Social Security and SNAP, formerly food stamps) that were assumed in the dynamic estimates he chose to highlight. The distributional analysis of the plan would have been much less favorable if it included those cuts.

The Center conducts research and analysis to help shape public debates over proposed budget and tax policies and to help ensure that policymakers consider the needs of low-income families and individuals in these debates. We also develop policy options to alleviate poverty.

In addition, the Center examines the short- and long-term impacts of proposed policies on the health of the economy and the soundness of federal and state budgets. Among the issues we explore are whether federal and state governments are fiscally sound and have sufficient revenue to address critical priorities, both for low-income populations and for the nation as a whole.

Over the past 30 years, the Center has gained a reputation for producing materials that are balanced, authoritative, accessible to non-specialists, and responsive to issues facing the country.

The House on Tuesday passed legislation laying out parliamentary rules for the year. The bill included a little-noticed provision blocking Congress from shifting funds to prevent a 2016 shortfall in Social Security's disability insurance program.

The Social Security Administration's actuaries have projected that the disability insurance program's trust fund will run out of money next year, resulting in a 20 percent benefit reduction for nearly 11 million Americans. Since last year, Social Security advocates have been calling on lawmakers to shift funds from the retirement program to make up the difference -- something Congress has done 11 times since the 1950s. (snip)

Congress could prevent the shortfall by raising taxes, cutting benefits, or both -- though cuts are a favored GOP option. Many Republicans have lamented the rise in disability rolls, which they have suggested is something of a welfare sham. Johnson described the program as "fraud-plagued."

Sen. Sherrod Brown (D-Ohio) sharply criticized the measure in a Tuesday statement that argued shifting Social Security funds from retirement insurance to disability insurance has been routine in the past.

In addition, the rule could lead to misleading mismatches between the cost estimates used for tax proposals and distributional analyses of those proposals that the House might separately request. As noted above, the economic growth and budgetary estimates that Chairman Camp touted of his tax reform plan came from a model that assumes future Congresses will take controversial deficit-reduction actions that policymakers have long resisted. Those estimates assumed not only that Congress will subsequently act to cut future deficits enough to stabilize the debt as a share of the economy, but also that all of this deficit reduction will come from cuts in transfer payments, a category that includes programs such as Social Security, unemployment insurance, and SNAP (formerly known as food stamps). Yet the distributional impacts that Chairman Camp relied on in presenting his bill failed to include any of these cuts in transfer payments, showing only the tax changes. The distributional analysis of his plan would have looked very different — and much less favorable — had it incorporated the cuts in benefit programs that Camp’s favored dynamic scoring estimate assumed.