Paul Ryan to Chair Ways and Means Committee

The U.S. House of Representative’s leadership has chosen Rep. Paul Ryan to chair the House Ways and Means Committee. In the continuing debate over ways to fund the government and grow the economy, Ryan has remained a longstanding voice for reform.

The House Ways and Means Committee is the oldest committee in Congress, officially becoming a standing committee in 1802. The committee has the responsibility of raising revenue, appropriations, and banking, powers given to it by Article I, Section VII of the U.S. Constitution. (Read about the history and role of the committee here.)

Rep. Ryan’s role as Chair may have significant implications for how tax bills are evaluated in the future. Currently, bills are scored on a static basis. This means that a bill’s “score” is the amount it increases or decreases revenue, without considering the effect of the tax change on the economy. This leaves members of Congress without the economic analysis needed to make wise policy decisions. Rep. Ryan has suggested on multiple occasions that Congress should have analysis that considers the economic effects of reforms.

Others, including Senator Orrin Hatch, have also advocated for the use of dynamic scoring. In an event this week, Hatch made the point that there have been “major developments in the tools that economists use, including the development of dynamic programing and computing.” Hatch further states that not including the economic effects of tax changes is “downright dumb.” He's right.

As we have written here and here, taxes have a strong effect on growth and it’s important to evaluate this relationship when crafting tax reform plans. Dynamic scoring helps policymakers consider the effects of tax changes on the economy. As the tax reform debate moves forward, macroeconomic analysis can provide members of Congress with the information they need to craft policies that grow the economy.

To learn more about dynamic scoring, view information on our Taxes and Growth Model here.

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