Experts Tell Congress CBO Isn’t the Problem

Experts Tell Congress CBO Isn’t the Problem

The House Budget Committee on Wednesday held the last of five oversight hearings on the Congressional Budget Office, the independent scorekeeping agency that has come under fire from Republicans, particularly over its recent estimates on health care and tax legislation.

“Since its inception more than 40 years ago, CBO has not undergone a comprehensive review. This series of hearings finally fulfilled this committee’s duty for proper oversight and broadened our understanding of CBO’s work and challenges,” Budget Committee Chairman Steve Womack (R-AR) said.

Here are some highlights from the prepared testimony of outside experts, all of whom defended CBO at today’s hearing.

Sandy Davis, senior adviser at the Bipartisan Policy Center and former CBO staffer: “Recent frustrations with the agency over the accuracy of its estimates, transparency of it analyses, and responsiveness to Member requests have led some to propose different models for Congress to get the budget estimates and other support it needs to act on spending and revenue legislation. Some have asserted than an independent CBO is an outmoded model, no longer relevant for the time, and not nimble enough to respond to Congressional needs for accurate and timely estimates and other budget information. They advocate the use of outside organizations with policy expertise to produce estimates, and average the results to produce a mid-range estimate on par with CBO. These ideas are misguided, would diminish the quality of analyses available to Congress, and ultimately would weaken Congress’ ability to assert its budgetary responsibilities under the Constitution.”

Douglas Holtz-Eakin, president of the American Action Forum and former CBO director: “I believe that there is vast confusion regarding the role of models – spreadsheet models, micro-simulation models, macroeconomic business cycle models, growth models, etc. – in the scoring process. Many seemingly believe that there is a model for every legislative proposal, and CBO simply ‘runs the model’ to generate a 10-year budget score. Nothing could be further from the truth. At its core, scoring is a judgment exercise. Models can be used to inform analysts of certain aspects of a policy; that is, inform their judgment. But models are largely too crude to capture the specifics of legislative proposals, they by necessity omit aspects of policy reality, and in other ways they capture only aspects of the score…. All of us should respect CBO’s willingness to provide scores on enormously difficult policies, on often-ridiculous timetables, and in the face of little guidance from the extant literature.”

Maya MaGuineas, president of the Committee for a Responsible Federal Budget: “In an ideal world, here is how we would make policy: our leaders would set national objectives, determine which should be done by the public sector at the federal level, honestly debate the various policy options along with their trade-offs, have the costs scored independently, and figure out how to pay for them responsibly and without gimmicks. When one looks at how the policymaking process is working in practice, the role of CBO in scoring options and pay-fors is not where I would point to as the breakdown in the process.”

Alice Rivlin, senior fellow at the Brookings Institution and former CBO director: “Although I am glad that the Committee has devoted this series of hearings to oversight of the CBO, I strongly believe you should focus your attention on two far more important budget challenges:

  • The dangers of a federal debt that is projected to rise faster than the economy can grow;
  • The total breakdown of the budget process.”