A source of much spirited debate, budget "scoring" has been used to estimate changes in government revenues and outlays if federal tax and spending programs are altered. Historically, the U.S. federal government has used a "static scoring" methodology that assumes that all policy changes would not affect the size of the economy, regardless of how much businesses invest and hire or how much households save and work. In recent months, initial attempts by the Congressional Budget Office and the Joint Committee on Taxation raise the possibility that "dynamic scoring"--which takes into account, where appropriate, all behavioral reactions to changes in tax policy--might be more fully adopted. Is dynamic scoring a step in the right direction? And, if so, how it should be carried out? Budget and tax policy experts will define dynamic scoring, the pros and cons of the debate, and how dynamic scoring might be used in the future.
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