I 

109TH CONGRESS 

1ST SESSION H. R. 2842

To require the Congressional Budget Office and the Joint Committee on 

Taxation to use dynamic economic modeling in addition to static economic modeling in the preparation of budgetary estimates of proposed 

changes in Federal revenue law. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 9, 2005

Mr. FLAKE (for himself, Mr. DREIER, Mr. SESSIONS, Mr. HENSARLING, Mr. 

HERGER, Mr. GARRETT of New Jersey, Mr. MILLER of Florida, Mr. 

MCHENRY, Mr. CONAWAY, Mr. ADERHOLT, Mr. PENCE, Mr. FRANKS of 

Arizona, Mr. KING of Iowa, Mr. HOSTETTLER, Mr. SHADEGG, Mr. 

NEUGEBAUER, Mr. WILSON of South Carolina, Mr. GINGREY, Mr. SAM

JOHNSON of Texas, Mrs. MYRICK, Mrs. MUSGRAVE, Mr. FEENEY, Mrs. 

CUBIN, Mr. AKIN, Mr. BARRETT of South Carolina, Mr. BARTLETT of 

Maryland, and Mr. RYUN of Kansas) introduced the following bill; which 

was referred to the Committee on the Budget, and in addition to the 

Committees on Rules and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL

To require the Congressional Budget Office and the Joint 

Committee on Taxation to use dynamic economic modeling in addition to static economic modeling in the preparation of budgetary estimates of proposed changes in 

Federal revenue law.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SENSE OF CONGRESS. 

2 It is the sense of Congress that it is necessary to en3 sure that Congress is presented with reliable information 

4 from the Congressional Budget Office and the Joint Com5 mittee on Taxation as to the dynamic macroeconomic feed6 back effects to changes in Federal law and the probable 

7 behavioral responses of taxpayers, businesses, and other 

8 parties to such changes. Specifically, the Congress intends 

9 that, while not excluding any other estimating method, dy10 namic estimating techniques shall also be used in esti11 mating the fiscal impact of proposals to change Federal 

12 laws, to the extent that data are available to permit esti13 mates to be made in such a manner. 

14 SEC. 2. ESTIMATES OF THE JOINT COMMITTEE ON TAX15 ATION. 

16 In addition to any other estimates it may prepare of 

17 any proposed change in Federal revenue law, a fiscal esti18 mate shall be prepared by the Joint Committee on Tax19 ation of each such proposed change on the basis of as20 sumptions that estimate the probable behavioral responses 

21 of personal and business taxpayers and other relevant en22 tities to that proposed change and the dynamic macro23 economic feedback effects of that proposed change. The 

24 preceding sentence shall apply only to a proposed change 

25 that the Joint Committee on Taxation determines, pursu-
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1 ant to a static fiscal estimate, has a fiscal impact in excess 

2 of $250,000,000 in any fiscal year. 

3 SEC. 3. ESTIMATES OF THE CONGRESSIONAL BUDGET OF4 FICE. 

5 In addition to any other estimates it may prepare of 

6 any proposed change in Federal revenue law, a fiscal esti7 mate shall be prepared by the Congressional Budget Office 

8 of each such proposed change on the basis of assumptions 

9 that estimate the probable behavioral responses of per10 sonal and business taxpayers and other relevant entities 

11 to that proposed change and the dynamic macroeconomic 

12 feedback effects of that proposed change. The preceding 

13 sentence shall apply only to a proposed change that the 

14 Congressional Budget Office determines, pursuant to a 

15 static fiscal estimate, has a fiscal impact in excess of 

16 $250,000,000 in any fiscal year. 

17 SEC. 4. DISCLOSURE OF ASSUMPTIONS. 

18 Any report to Congress or the public made by the 

19 Joint Committee on Taxation or the Congressional Budget 

20 Office that contains an estimate made under this Act of 

21 the effect that any legislation will have on revenues shall 

22 be accompanied by—

23 (1) a written statement fully disclosing the eco24 nomic, technical, and behavioral assumptions that 

25 were made in producing that estimate, and 
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1 (2) the static fiscal estimate made with respect 

2 to the same legislation and a written statement of 

3 the economic, technical, and behavioral assumptions 

4 that were made in producing that estimate. 

5 SEC. 5. CONTRACTING AUTHORITY. 

6 In performing the tasks specified in this Act, the 

7 Joint Committee on Taxation and the Congressional 

8 Budget Office may, subject to the availability of appro9 priations, enter into contracts with universities or other 

10 private or public organizations to perform such esti11 mations or to develop protocols and models for making 

12 such estimates.

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