So, one of the first things that Republicans did in the House was to change how the CBO calculates future budgets:
Republicans controlling the House have changed the rules on budget scorekeeping and Democrats are unhappy with the new math.
At issue is so-called dynamic scoring, which factors in the economic effects of legislation when estimating its effect on the deficit.
The rules change promises to make it somewhat easier for Republicans to advance legislation such as an overhaul of the loophole-ridden tax code, since the positive economic effects of such legislation would generate greater tax revenue. That means lawmakers would have to come up with less in offsetting revenues to make up for bold cuts in income tax rates.
This is how it works:
Finally, dynamic scoring can create a bias favoring tax cuts over investments in infrastructure, education, and other priorities. While the House rule would require dynamic scoring for legislation making large changes in revenues and/or mandatory spending, and makes it permissible at the option of leadership for any such legislation (even if modest), it would not apply to discretionary spending, ignoring potential growth effects of investments in research, education, and infrastructure. More insidious, economic models that find large growth effects of tax cuts are often based on the assumption that they would be paid for entirely through reduced spending – without taking into account at all the economic consequences the reduction in government investment.
This is perfect for Republicans–they can get their tax cuts and still pretend that they’re cutting the deficit. Then, when the deficits go up, they can say they have to make large cuts to bring down the deficit. When this hurts the economy, they can again call for more tax cuts. Perfect.