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Dynamic Scoring

Term: Dynamic Scoring

Definition: A method of analysis used to calculate the prospective macroeconomic effects of a bill. As opposed to only considering the cost to the government alongside static levers like Gross Domestic Product (GDP) and inflation, this analysis also estimates changes in behavior or effects to the wider economy that may yield or preclude economic benefits or government revenues in the future.

Used in a sentence: “Under dynamic scoring, budget scorers would include in their analysis estimates on how the behavior of companies and individuals would change as a result of legislation, and how this would either bring in more or less federal revenue.”
-The Hill

History: The Congressional Budget Office (CBO) was created by and for Congress in 1975 to provide independent, nonpartisan analysis of budgetary and economic issues. The impetus was to create a “traffic cop” for government spending in Congress, according to Zachary Karabell of The Washington Post.The CBO, according to their methodology site, is required by law to “produce a formal cost estimate for nearly every bill that is approved by a full committee of either the House or the Senate.” Congress sends bills (except appropriations bills) to the CBO for these cost estimates, or as the process is commonly called: “scoring” or “to be scored.” Oftentimes, the costs included in these reports are referred to as a "CBO Score."

The CBO has made clear that scoring a bill is not an exact science and currently does not use dynamic scoring when looking at the cost of legislation. Dynamic Scoring calculates the economic impact of legislation on the wider economy. “Tax cuts spurring investments, leading to jobs” or “farm subsidies increasing regional crop yield, leading to a decrease in the cost of corn and products on the market” are two potential hypothetical analyses that can be concluded from a cost estimate using the process of dynamic scoring.