Each year, thousands of bills are introduced in Congress. The 1st Session of the 117th Congress in 2021 is no exception. As of August 13 this year, 5,039 bills were introduced in the House and 2,712 in the Senate as of August 11. Any measure perceived as being of great national importance may undergo certain stages. Once it is referred to a particular committee, members of that group may invite both government and non-government experts to testify at a public hearing about the necessity of having such legislation be enacted into law. A related step is to have the Congressional Budget Office (CBO) produce a score regarding a proposal’s potential budgetary impact.
Although this information may come from numerous sources, according to the Congressional Research Service (CRS), Congress generally relies on estimates provided by CBO and the Joint Committee on Taxation (JCT) when determining whether proposed legislation complies with congressional budgetary rules. Generally, CBO and JCT estimates include projections of the budgetary effects that would result from proposed policy changes, and incorporate anticipated individual behavioral responses to the policy. The estimates, however, do not typically include the macroeconomic effects of those individual behavioral responses that would alter gross domestic product (GDP). In recent decades, Congress sometimes has required that JCT and CBO provide estimates that incorporate such macroeconomic effects on overall economic output. i.e., GDP. These estimates often are referred to as dynamic estimates or dynamic scores.
A good example of proposed legislation that recently underwent this level of scrutiny is H.R. 3684, The INVEST in America Act. It was introduced in the House on June 4, 2021 and was passed by the Senate on a 69-30 Yea-Nay Vote on August 10. This bill addresses provisions related to federal-aid highway, transit, highway safety, motor carrier, research, hazardous materials, and rail programs of the Department of Transportation (DOT). CBO found that the roughly $1 trillion infrastructure bill would widen the budget deficit by $256 billion over 10 years, which is in contrast to bill negotiators’ claims that the cost of the legislation would be covered by new revenue and savings measures. Legislators who supported passage indicated that the CBO assessment does not reflect savings and additional revenue identified in other estimates, noting that the agency is limited in what it can include in its formal score.
Whether H.R. 3684 will be enacted into law depends on whether a second piece of major legislation favored by Democrats that is considered as complementary to H.R. 3684, and estimated by its supporters as costing $3.5 trillion, also is approved by Congress. Senate Democrats approved a budget resolution (Senate Concurrent Resolution 14) for that amount on August 11. These large sums of money call to mind two sagacious aphorisms. One of them was made by Niels Bohr, a Danish scientist who won a Nobel Prize in Physics in 1922. He stated, “Prediction is very difficult, especially if it's about the future,” a comment that is quite apropos in the context of estimating projected legislative revenues and costs over the next 10 years. Former Senate Minority Leader (from 1959-1969) Everett Dirksen (R-IL) once quipped at a time when a billion dollars seemed like an enormous amount of money, “A billion here, a billion there, and pretty soon you're talking about real money."