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Congressional Budget Watchdogs Change The Way They Keep Score


We try not to bore you with arcane rules from Capitol Hill, but this one could really change the playing field. Congressional budget watchdogs are changing the way they keep score. The new Republican Congress has ordered scorekeepers to consider broader economic effects when measuring the cost of major new tax and spending legislation. We've asked NPR's Scott Horsley to explain this with a little help from the Wayback Machine.

SCOTT HORSLEY, BYLINE: The new rule seems straightforward enough. Before bean-counters in the Congressional Budget Office put a price tag on a big piece of legislation, they should try to predict how it would affect the overall economy. For example, if cutting taxes leads to faster economic growth, and that growth puts more money in the government's coffers, the forecast should reflect that. Critics complain they've seen this movie before.


BEN STEIN: (As economics teacher) Anyone know what this is? Class? Anyone? The Laffer curve.

HORSLEY: Movie actor Ben Stein, whose father, by the way, was a White House economist in the Nixon administration, took apart this supply-side logic back in the 1980s.


STEIN: (As economics teacher) This is very controversial. Does anyone know what Vice President George Bush called this in 1980? Voodoo economics.

HORSLEY: Ferris Bueller missed the lesson, but conservatives insist they've learned from it. Scott Hodge of the Tax Foundation concedes the economic benefits of tax cuts may be modest. But, he argues, they're still worth counting.

SCOTT HODGE: Very, very few tax cuts pay for themselves, so to speak. But they do produce enough additional growth to at least lessen the cost of the treasury.

HORSLEY: Hodge says the new Congressional budget yardstick is designed to measure that growth through a process called dynamic scoring.

HODGE: Much like instant replay is really helpful for giving umpires more useful information to make the right call, dynamic scoring is really useful for members of Congress to give them the kind of information so that they can make smarter tax policy.

HORSLEY: But critics complain the new scoring system is more subjective than a simple yardstick and transforms the CBO's forecasters from impartial umpires into something more like the referees in last week's Dallas-Detroit game.


UNIDENTIFIED MAN #1: Boy, that was late. Have you ever seen that call picked up that late?

UNIDENTIFIED MAN #2: Not at all.


PRESIDENT BARACK OBAMA: Even a Bears fan has to admit that that was a little suspect.


HORSLEY: The Obama administration is more than a little suspicious of what the new Republican Congress is trying to do. White House economist Jason Furman says, while there's always a certain amount of guesswork in predicting the cost of legislation, the new scoring system is particularly vulnerable, with little consensus on where the goal lines are or many yards are needed for a first down.

JASON FURMAN: With dynamic scoring, you're opening up the potential for abuse, for arbitrary assumptions and the potential to stack the decks.

HORSLEY: Furman notes when forecasters tried during the Bush administration to predict the economic effects of the president's tax cuts, their forecasts came in all over the map, depending on the assumptions they started with.

FURMAN: And that underscores, number one, that tax cuts aren't some panacea for economic growth, and, number two, that there's a large dose of arbitrariness in any of these estimates.

HORSLEY: Robert Carroll, who worked on tax analysis in the Bush Treasury Department, says CBO forecasters will have to work carefully in using the new yardstick if they want their predictions taken seriously.

ROBERT CARROLL: The devil is in the details. The execution of how it's done does matter quite a lot.

HORSLEY: Or, as Ferris might say, congressional rulemaking moves pretty fast. If you don't stop and look around once in a while, you could miss it.


STEIN: (As economics teacher) Anyone? Anyone?

HORSLEY: Scott Horsley, NPR News, the White House. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.