Scoring Still a Potential Issue for Tax Revamp in Senate

By Jonathan Nicholson

In 2015, congressional Republicans touted the ways dynamic budget scoring would help them push through legislation previously undermined by deficit concerns. But as they head into their drive for a historic tax system overhaul, uncertainty exists over how it will be scored in the Senate.

The reasons are varied and include procedural concerns, but the impact could be significant. It could potentially force politically tough floor votes on increasing the government’s $20 trillion debt burden and make it harder for a tax bill to wend its way through a thicket of budget-related points of order Democrats want to deploy against filibuster-proof budget reconciliation.

“These issues are still under discussion as we move forward with this budget resolution focused on providing the tools needed for tax reform,” a spokesman for the Senate Budget Committee told Bloomberg BNA Sept. 29 in response to questions regarding how a tax reconciliation would be handled.

Tax overhaul advocates have long seen dynamic budget scoring—in which the impact of a proposed bill on the overall economy and thus on future revenues and spending is included in a bill’s final score—as a key to easing tax reform approval. Conventional scoring, they say, misses the beneficial impact a simpler and more efficient tax code would have on the economy as well as on federal revenue.

‘Full and Honest’

“As its name indicates, this kind of scoring provides a full and honest accounting of a bill’s effect on the economy. So instead of focusing on whether a bill is good for the government, we’re putting the focus on whether it’s good for the taxpayer,” the office of House Speaker Paul Ryan (R-Wis.) said in January 2015 after the House changed its rules to apply the method to bills likely to have large impacts on the economy.

In the congressional budget resolution adopted later in 2015 by both the House and Senate, dynamic scoring was allowed on both sides of the Capitol. But the report language adopted for the budget conference report included a caveat: that it would be “for informational purposes only” in the Senate.

That raises the question: when a tax reconciliation bill is on the Senate floor, what will determine whether it meets budget-related points of order—a conventional score or a dynamic one? The difference could be huge. In 2014, the Joint Committee on Taxation said a tax overhaul proposal by then Michigan Republican Dave Camp could have a feedback effect somewhere between $50 billion and $700 billion.

Byrd Fouls?

In the initial stage, Republicans appear to be sticking with conventional scoring in the budget resolution, including allowing the Senate Finance Committee to increase the deficit by up to $1.5 trillion over 10 years in its tax overhaul bill. Sen. Bob Corker (R-Tenn.), a member of the Senate Budget Committee, said Sept. 27, “We’re doing what we’re doing with the $1.5 trillion simply to move the thing along so Finance can do its work.”

Aside from the “informational purposes only,” language, two procedural puzzles arise from dynamic scoring, opponents say. The Byrd rule in the Senate sets limits on what can be in a reconciliation bill, prohibiting provisions that balloon the deficit outside the budget window or have zero or only “incidental” effect on revenues or outlays. More importantly, the rule is enforced on a provision-by-provision basis.

Senate rules also prohibit the use of more than one set of economic assumptions. A dynamic score judges a bill’s provisions as having no change on the economy and then adds a line at the end giving the deficit impact of the entire bill once enacted. By its very nature, opponents say, that is assuming two different economic assumptions, a pre-policy and a post-policy one.

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