CBO is an ob­scure but re­spected bud­get score­keeper

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The Con­gres­sional Bud­get Of­fice is a score­keeper sud­denly in the spot­light.

The ob­scure but re­spected agency, es­tab­lished un­der the 1974 bud­get act, pro­vides cost es­ti­mates of legislation, base­line pro­jec­tions of the fed­eral bud­get and its com­po­nents, and in­de­pen­dent eco­nomic and deficit sta­tis­tics for law­mak­ers.

It’s a non­par­ti­san coun­ter­weight to the Of­fice of Man­age­ment and Bud­get, which is part of the White House.

What you need to know about the CBO:

Far from in­fal­li­ble

The CBO is re­spected for the non­par­ti­san rigor its 200plus em­ploy­ees put into the 600 or so official cost es­ti­mates it per­forms each year — and the thou­sands of in­for­mal es­ti­mates it pro­vides as com­mit­tees draft legislation. But it’s hardly in­fal­li­ble, es­pe­cially when con­sid­er­ing large, com­plex and far-rang­ing legislation like the Af­ford­able Care Act and the pro­posed Repub­li­can re­place­ment legislation.

The agency’s es­ti­mates, for in­stance, sig­nif­i­cantly over­stated the num­ber of peo­ple who would buy in­sur­ance on state and fed­eral ex­changes un­der the ACA, in part be­cause it thought the in­di­vid­ual man­date and ac­com­pa­ny­ing tax penal­ties would be more ef­fec­tive in forc­ing peo­ple to buy in­sur­ance.

“Pre­dict­ing the ef­fects of large pol­icy changes is al­ways dif­fi­cult, but CBO’s pre­dic­tions for the (ACA) in 2010 were much more ac­cu­rate than the pre­dic­tions of many Repub­li­can op­po­nents of the law,” said for­mer agency chief Doug El­men­dorf, who was ap­pointed by Democrats.

The agency also was way off in the early 2000s when it pre­dicted large long-term bud­get sur­pluses that eased the way for large tax cuts in the Ge­orge W. Bush ad­min­is­tra­tion.

A new sher­iff in town

Even as Repub­li­cans at­tack the ref­eree, it should be re­mem­bered that they hired the ref­eree. CBO Di­rec­tor Keith Hall, a con­ser­va­tive econ­o­mist, was se­lected two years ago by Repub­li­can Tom Price, then the chair­man of the House Bud­get Com­mit­tee and now the sec­re­tary of the De­part­ment of Health and Hu­man Ser­vices.

Hall had been a critic of the Af­ford­able Care Act and in­creas­ing the min­i­mum wage. He has over­seen an in­crease, long-sought by Repub­li­cans, in the use of “dy­namic scor­ing” — in which the eco­nomic ef­fects of tax changes and other poli­cies are in­cor­po­rated into CBO analy­ses. The CBO, for in­stance, has said Obama’s health law has had a damp­en­ing ef­fect on la­bor force par­tic­i­pa­tion and would slightly re­duce growth.

But the CBO also dis­agrees with those who char­ac­ter­ize so-called “Oba­macare” as be­ing in a “death spi­ral.”

‘Strong rep­u­ta­tion’

Crit­i­cism of the CBO is hardly new, but it is un­usual to be com­ing from top of­fi­cials like White House bud­get di­rec­tor Mick Mul­vaney, who said Sun­day on ABC’s “This Week” that “es­ti­mat­ing the im­pact of a bill of this size prob­a­bly isn’t the best use of (the CBO’s) time.”

That remark sparked crit­i­cism from agency de­fend­ers on so­cial me­dia sites, where Peter Orszag, a for­mer di­rec­tor of both the CBO and the Of­fice of Man­age­ment and Bud­get un­der Pres­i­dent Barack Obama, wrote, “The for­mer OMB and CBO di­rec­tor in me is speech­less.”

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