U.S. Treasury Secretary Steven Mnunchin recently claimed long-term economic growth will pay for the cost of President Trump’s proposed tax reform plan. This claim relies on using so-called “dynamic scoring,” a tactic long exploited by Republicans to justify not paying for immense tax cuts. However, dynamic scoring methodologies can lead to wildly different estimates that often underestimate how much these tax cuts increase the budget deficit.
Fiscal responsibility is critically important and demands delivering public goods and services to the American people without throwing our budget completely off-balance. Changes to our tax code should be held to this same standard. Unfortunately, over the past several years, Republicans have demanded cuts to programs serving millions of working Americans under the guise of fiscal discipline while simultaneously pursuing massive unpaid-for tax cuts for the wealthiest individuals and corporations.
As Congress continues to pursue fiscally responsible policy that grows the economy and creates jobs, evaluating the long-term macroeconomic impacts of certain legislation should be embraced. While dynamic scoring seemingly offers that opportunity, it currently lacks the consistency and reliability necessary to be used outside of a complementary role.
More on the shortcomings of dynamic scoring can be found here.