House Requires Dynamic Scoring of Legislation

January 7, 2015 Tuesday, the House approved as part of its rules package a requirement that the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT)  include so-called “dynamic scoring” in the cost estimates of any major legislation. Currently, the JCT and CBO do not incorporate into their findings the macroeconomic impact of legislation such as changes in work, savings, investment and output.

Dynamic scoring would essentially provide a more comprehensive look at how legislation would cause the economy to grow or shrink rather than a straight cost estimate absent potential revenues through taxes on increased economic output. This method of scoring legislation has been supported by NSBA for years and could make broad tax reform an easier lift if the cost as well as savings and increased revenue were taken into account.

This rule change does, however, include a loophole waiving the inclusion of dynamic scoring if such a calculation is deemed not practicable. It also only applies to House bills – not legislation originated in the Senate.

In September 2011, NSBA submitted testimony to the House Ways and Means Committee supporting the use of dynamic scoring, and applauds the House for including this provision in its rules package for the 114th session.