‘Dynamic Scoring’ is Hiding a $2 Trillion Hole in the GOP’s Balanced Budget

"Entitlement" spending includes Social Security and Medicare.

http://www.thefiscaltimes.com/2015/05/01/Dynamic-Scoring-Hiding-2-Trillion-Hole-GOP-s-Balanced-Budget?utm_campaign=548f5168cb03a93709042da0&utm_source=boomtrain&utm_medium=email&bt_alias=eyJ1c2VySWQiOiI0YTc0NTIxMy05ZTE2LTYzNWQtMTUxOC0zZjcxZDIyY2NkNjYifQ%3D%3D

By Eric Pianin, The Fiscal Times
May 1, 2015

Congressional Republicans vowed this year to take a more “dynamic” approach to budgeting in their drive to eliminate the deficit within a decade. Their goal – simply put -- was to squeeze out a lot more in projected revenues over the coming years through rosy assumptions about the long-term economic and budgetary impact of their tax and spending policies.

Shortly after the GOP took control of Congress in January, the House Republicans adopted a new rule requiring budget scorekeepers at the Congressional Budget Office and the Congressional Joint Committee on Taxation to do an analysis of “major” legislation that projects the macroeconomic effects of the policy changes over time.

The analysis, known as “dynamic scoring,” has been controversial among economists dating back to the Reagan administration of the 1980s because it is so imprecise.

The end result – put on full display Thursday when the House adopted a fiscal 2016 budget blueprint along party lines, 226-197 – was far more a reflection of wishful thinking than hard-headed budgetary policy making. Republicans used dynamic scoring to hide a gaping $2 trillion hole in their “balanced budget.”

The new budget purports to reach balance by 2024 by cutting nearly $5.3 trillion in entitlement and discretionary spending from the current CBO spending projections but without increasing tax rates.

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At the same time Congress is rushing to pass a new budget and spending bills for the coming fiscal year, Republicans are extolling the importance of lowering taxes to help businesses and the economy. Indeed, House Ways and Means Committee Chair Paul Ryan (R-WI) and Senate Finance Committee Chair Orrin Hatch (R-UT) are exploring ways to achieve “revenue neutral” corporate tax reforms that cut rates while eliminating costly or unnecessary tax loopholes.

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Republican lawmakers are using what Gray described as “Enron-style accounting gimmicks” to hide the reality that – as currently conceived -- the GOP’s new budget will never balance. And he says the “trickery” begins with the presence of nearly $2 trillion of bogus tax revenues over the next 10 years.

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Then there’s the matter of the $1 trillion of Obamacare tax revenues that presumably would disappear if the Republicans -- or the Supreme Court, for that matter – manage to strike down the Affordable Care Act this year. Those taxes were meant to defray the cost of the major subsidized health insurance program. An honest accountant would have written off that $1 trillion as collateral damage in the war against Obamacare. But the GOP budgeteers are clinging to that revenue as part of its budget-balancing strategy.

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