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Illustration: Sarah Grillo/Axios

Senate Democrats plan to offset some of their “soft” infrastructure spending by using dynamic scoring — a budgetary practice many of them called a gimmick just a few years ago.

Why it matters: The total size of the Democrat-only reconciliation bill will depend in large part on how much of it can be offset with new revenues. Using budgetary smoke and mirrors shows how hard Democrats are working to pass a big bill.

  • Negotiators can get some breathing room by relying on traditional deficit spending.
  • They also can use dynamic scoring, a term of art for assuming that new programs will be so beneficial for the economy, they'll produce future tax windfalls.

What they are saying: “Dynamic scoring has been used before,” Sen. Joe Manchin (D-W.Va.), told Axios, referencing the 2017 Trump tax cuts. “So, sure, I mean there's going to be some dynamic (scoring).”

  • Dynamic scoring is “both a mixed blessing and an unknown factor,” said Sen. Sheldon Whitehouse (D-R.I.). “The extent to which it can be abused is significant. The extent to which it's also useful and accurate is also significant.”
  • "It's a brave new world."

The big picture: Republicans have long used dynamic scoring to make the total cost of tax cuts appear smaller.

  • Now, Democrats are arguing billions of new dollars for programs like universal preschool and free community college will cause productivity gains that, in turn, spur economic growth.
  • The $579 billion bipartisan infrastructure package that would accompany the reconciliation bill also includes approximately $60 billion in new dynamic scoring savings.
  • It assumes "hard" infrastructure like new roads and bridges will benefit the entire economy.

Flashback: In 2015, House Republicans required the Congressional Budget Office to score proposals by factoring in their overall macroeconomic effect.

  • Democrats, including Sen. Bernie Sanders (I-Vt.), then the ranking member of the Senate Budget Committee, howled.
  • “The Republicans have hatched a plan to force the CBO to cook the books and paint a rosy picture of the benefits of trickle-down economics," Sanders said.
  • “They call it ‘dynamic scoring,’" he added. “In fact, it’s a gimmick to help justify more tax cuts for the wealthy and profitable corporations.”

Between the lines: Some conservative economists welcome the Democrats' newfound religion.

  • They argue budget experts can — and should — factor in the productivity gains from more education or better health care on the overall economy.
  • Some also caution against estimating precise dollar figures.
  • “They are never as big as the proponents think they are going to be,” said Doug Holz-Eakin, who was the first Congressional Budget Office director to try to use dynamic scoring during the debate about the cost of President George W. Bush’s tax cuts.
  • “Dynamic scoring lives to excite and disappoint simultaneously.”

Go deeper

Ben Geman, author of Generate
Sep 27, 2021 - Politics & Policy

This week is crunch time for Biden's climate agenda

Illustration: Aïda Amer/Axios

This week is critical to determining the fate of President Biden's climate agenda.

Driving the news: House Speaker Nancy Pelosi last night pledged a vote on bipartisan infrastructure legislation Thursday, rather than today as initially hoped.

Biden's reengineer-America moment

Illustration: Sarah Grillo/Axios

The Senate's bipartisan $1.2 trillion infrastructure bill and President Biden's $3.5 trillion spending package could live or die this week — and take Democrats' fortunes with them. But all the minute-by-minute political drama obscures how much America could change if even a fraction of it passes.

The big picture: Anything short of total failure could have a transformative impact on day-to-day life — from how we move around to our access to the internet, paid family leave and child care, health care and college.

Updated 10 mins ago - Politics & Policy

Senators grill top Pentagon leaders over Biden's Afghanistan exit

Photo: Carolone Brehman/Pool/AFP via Getty Images

Defense Secretary Lloyd Austin, Joints Chiefs of Staff Chairman Gen. Mark Milley, and the head of U.S. Central Command, Gen. Frank McKenzie, are testifying before Congress for the first time since the chaotic U.S. withdrawal from Afghanistan.

The latest: Austin said in his opening statement that military leaders began planning for a non-combatant evacuation of Kabul as early as the spring, and that this is the only reason U.S. troops were able to start the operation so quickly when the Taliban captured the city. "Was it perfect? Of course not," Austin acknowledged.