Policy

Tax Cost Estimates May Not Be Released With Bill Text

Sources expect score to be available before Ways and Means markup

House Ways and Means Chairman Kevin Brady says he hopes to deliver a “full text” of the Republican tax bill but doubts remain if that would include the initial cost estimate. (Tom Williams/CQ Roll Call file photo)

Updated 9:54 p.m. | Thursday’s release of the text of the Republican tax bill by the House Ways and Means Committee will set in motion the complex effort to estimate the effects of the legislation.

It is unclear whether initial cost estimates will be ready when Ways and Means Chairman Kevin Brady releases the text of the bill. Several people with knowledge of the process said they expect the score will not be ready until later in the week, or possibly until Monday before the markup. All Brady would confirm Tuesday is that a score would be available going into next week’s markup.

One person with knowledge of the legislation said its drafting got backed up over the weekend after GOP leaders decided to add a provision retaining a deduction for state and local property taxes.

Oregon Sen. Ron Wyden, the ranking Democrat on the Finance Committee, said he heard the Ways and Means text might not be complete and could lack information on the tax brackets and other details.

Brady, however, said he was aiming for a complete product unveiling. “We’re focused on delivering a full text,” he told reporters.

The Joint Committee on Taxation is working to issue a standard score of the legislation before it is marked up by the committee next week, the committee’s chief of staff Thomas A. Barthold told Roll Call. Barthold said in an email that the committee intends to release both the score and technical explanations of the bill before the markup.

Though the standard score will hold the size of the economy constant, Barthold said it is not, strictly speaking, static.

“All staff estimates account for a large number of possible changes in taxpayer behavior in response to the changed legal framework,” he said. “These responses include changes in timing of transactions, changes in portfolio holdings of assets, changes in the form of compensation received, changes in business form, changes in investment in various sectors of the economy, and changes in taxpayer compliance among other behaviors.”

Once the bill is reported out of Ways and Means, the Joint Committee on Taxation will set to work on a dynamic score that includes an estimate of whether the bill would increase the size of the economy and how much additional tax revenue would be generated by economic expansion, helping to pay for tax cuts in the measure.

“Heading into committee, there’ll be a score — a static one — on the tax provisions and overall. After the committee considers nice amendments and finishes, then the Joint Committee on Taxation will do the dynamic analysis before we go to the House floor. So there’s two steps to this,” Brady told reporters.

A House rule requires the Joint Committee on Taxation and the Congressional Budget Office to produce dynamic scores of major legislation.

The procedure is different in the Senate, where GOP aides said a standard score that holds the size of the economy constant will be used for the purpose of enforcing budget rules. The fiscal 2018 budget resolution adopted by the House and Senate includes a provision that reactivates dynamic scoring in the Senate but it does not become part of the official score.

As described in a “committee print” written by the Senate Budget Committee, the fiscal 2018 budget resolution directs the Joint Committee on Taxation and the CBO to incorporate the budgetary effects of what are called macroeconomic variables but “these estimates will be used for informational purposes only.”

The Senate Finance Committee plans to mark up its version of the tax bill after Ways and Means acts. “Chairman Hatch intends to lay down a mark for the committee to advance in the coming weeks,” said Julia Lawless, a spokeswoman for Finance Chairman Orrin G. Hatch of Utah.

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