Given the authority that the Congressional Budget Office (CBO) has, is it really feasible to think of it as a nonpartisan organization?
In a recent interview, Mick Mulvaney, the director of the White House’s Office of Management and Budget (OMB), suggested that the Congressional Budget Office (CBO) has “some sort of bias in favor of a government mandate” (related to the Affordable Care Act (ACA) of 2010) and postulated, without evidence: “given the authority that that [the CBO] has, is it really feasible to think of that as a nonpartisan organization?”
Discussing the CBO’s assumptions relative to the bill passed by House Republicans, in which one effect was that, over about a decade, the CBO estimated that 23 million people currently covered by the Medicaid expansion and subsidy programs created by the ACA would lose their insurance.
The CBO’s exact words were: “In 2026, an estimated 51 million people under age 65 would be uninsured, compared with 28 million who would lack insurance that year under current law”. Mulvaney called the CBO’s analysis “just absurd. To think that you would give up a free Medicaid program and choose instead to be uninsured is counterintuitive.” However, if, as the proposed American Health Care Act would allow, a state currently offering Medicaid expansion can opt out, then it would not actually be a voluntary choice to ‘become uninsured.’
Interestingly, even Mr. Mulvaney’s boss, President Trump, has called the current House bill (H.R. 1628, the American Health Care Act of 2017, to give it its full title), “mean.” More recently, Mr. Trump expounded on his earlier observation, by saying, “That was my term because I want to see — and I speak from the heart, that’s what I want to see. I want to see a bill with heart.”
So, what are we to think? The CBO is partisan and has outlived its utility?
Or, are we facing, as we do from time to time, insincerity from politicians and those in power who can see issues in their own plans, but more in others? With one’s motive uncertain, Mr. Mulvaney resorts to questioning the integrity and motivation of the CBO, like a loyalty test from the 1950s.
The reasons for the CBO
The Congressional Budget Office (CBO) started work in 1975. Because of escalating the political and financial conflict between the executive and legislative branches during the summer of 1974 related to the Watergate scandal, and then-President Nixon’s threat to withhold Congressional appropriations for programs that conflicted with his view of policy, the Congressional Budget and Impoundment Control Act of 1974 was passed. One important objective of this law was to create the CBO to provide Congress in general, and the House and Senate Budget Committees in particular, with impartial and objective information about budgetary and economic issues.
In “An Introduction to the Congressional Budget Office,” published in July 2016, the CBO outlines some of its statutory roles: to provide baseline budget and economic projections, which cover the 10-year period used by Congress, and updated several times annually; long-term budget projections, that forecast 30 years ahead, update annually; cost estimates “of virtually every bill approved by Congressional committees to show how the bill would affect spending or revenues over the next 5 or 10 years.” And, as they note, for “most tax legislation, the CBO uses estimated provided by the staff of the Joint Committee on Taxation,” which is comprised of 5 members of the House and Senate. Additional work includes analytic reports related to federal spending; the budget submitted annually to Congress; and analysis of federal spending and revenues for the previous month and fiscal year to date, among other things.
The CBO is a creation of the Congress. The current director, Keith Hall, was appointed in 2015 by the Speaker of the House and the president, pro tempore, of the Senate: in other words, by two Republicans, Representative Paul Ryan and Senator Orrin Hatch. The CBO itself strives to be objective: it consults with outside experts from local, state and the federal government as well as outside think-tanks, industry, and universities. It has a multi-tiered institutional review process with strict policies to prevent financial and political conflicts of interest and to merely present raw data. However, the CBO is the first to recognize that its analyses are expressed within a median and a range – since they are attempts to both forecasts the future, which is difficult, and many of these events are, as they political. Thus they continue to abide by the code that “to ensure that CBO’s analysis is objective, impartial, and nonpartisan, the agency does not make recommendations about what policies the Congress should enact.” It is a scorekeeper and, when it makes an economic forecast, these are “based on current laws governing federal taxes and spending….” In other words, the COB’s goal is “to be both unbiased and consistent across similar policies.” And, provide analysis of a mid-point and a range around which laws and budgets may reside, so that the policy makers can make better decisions, when weighing the data and the human values at play.
What is the CBO’s place?
Attacking the CBO is not new. In the late 1970’s the Carter Administration was displeased that the CBO analyzed its energy policies negatively; time showed them to be directionally correct. In the first two years of the Reagan administration, the CBO directly confronted the OMB’s projection that the administration’s tax cuts would balance the budget by 1984, which it did not (although as the CBO and OMB agreed, tax revenues would climb as a result). There have been other examples since that time.
It is important to remember Senator J. William Fulbright’s admonition, during a speech on McCarthyism: “when public men indulge themselves in abuse when they deny others a fair trial, when they resort to innuendo and insinuation, to libel, scandal, and suspicion, then…democracy is baffled.”
Here is where the danger of Mulvaney’s allegations and inferences about partisanship lies. There is, as always, friction between the executive and legislative branches. Our Constitution was designed that way. This is what reached a head during Nixon’s administration and led to the formation of the CBO.
The CBO is essential to maintaining that “creative tension” between the two branches by giving Congress the ability to understand the budgetary and economic consequences, both of laws it proposes, and of the initiatives and budgets sent to it by the White House. In a complex, interconnected, and uncertain world, an independent and critical CBO is exactly what the United States needs. The Congress should defend and support its own creation, and their findings, with vigor.
“The great enemy of clear language is insincerity. When there is a gap between one’s real and one’s declared aims, one turns, as it were instinctively to long words and exhausted idioms, like a cuttlefish squirting out ink.” –George Orwell, 1946