In his testimony before the Joint Economic Committee, Senior Fellow and Director of Economic Policy Studies at the American Enterprise Institute (AEI) Kevin Hassett examines the potential benefits of dynamic scoring. Hassett notes:
“As…the Fed [does] in its analysis of economic conditions, so should the staff of the [Joint Committee on Taxation], and others tasked with the dynamic scoring of proposals, incorporate sensitivity analysis, a range of perspectives, and the best thinking of the academic community. If there are many available models for a specific question, the staff should evaluate the broad range of them, and then come to a considered judgment regarding the relative weights of the different results. Such a process already occurs when distributional changes are being modeled, and elasticity assumption are made. Over the years, the staffs of the [Congressional Budget Office] and the JCT have reliably met the high professional standards one would require of a staff engaged in this process. These staffs will be even more effective if we give them freedom to apply their macroeconomic expertise when circumstances warrant it. Asking them to pick a number that includes dynamic effects is no more of a stretch than asking them to pick a number in the first place.”
He concludes:
“Congress, and the United States more generally, would benefit from the dynamic scoring of more policy proposals. Much work remains to be done in fleshing out how exactly such a system of dynamic scoring should work in practice. Nevertheless, the obstacles to transitioning to a world where dynamic scoring becomes the norm are not insurmountable.”
Read the full testimony, “On the Dynamic Scoring of Fiscal Policy.”
To arrange an interview with Kevin Hassett, or another AEI scholar, please contact AEI Media Services at mediaservices@aei.org or 202.862.5829.
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