Feb. 11, 2012 – 12:31 p.m.
Political Economy: Shooting at CBO
By John Cranford, CQ Columnist
The nonpartisan Congressional Budget Office. These are words that used to go together well. Indeed, they appear often enough in print that some folks may believe that “nonpartisan” is part of the official name of the group that has provided lawmakers with economic and budgetary advice for more than a third of a century.
That may be changing. There seems to be a rising belief — particularly on the political right — that CBO is not a truly independent expert, willing and able to give unbiased assessments of the effects of proposed legislative action.
These apprehensions might be just a further sign of the nasty partisanship that nowadays afflicts Capitol Hill. But, whatever the cause, complaints about CBO’s methodology and its judgments are becoming more commonplace, or at least more public.
In response to this phenomenon, CBO Director Douglas W. Elmendorf was moved two weeks ago to post a 700-word blog entry defending his agency to the world.
The central point of Elmendorf’s posting, emphasized with boldface type, was this sentence: “We have the utmost confidence in the objectivity of our work and devote considerable time and energy to explaining the basis of our findings as clearly as we can to help Members of Congress understand the work that we do.”
Wow. To see an esteemed institution like CBO assume such a defensive crouch was extraordinary.
The event was all the more remarkable because it was essentially a pre-emptive strike against a Wall Street Journal story that had yet to appear in print, which said that some Republican aides on Capitol Hill were aggressively challenging CBO’s practices.
Citing unnamed “people,” the story suggested that there were concerns that the agency was being manipulated by Wall Street bankers and academic researchers. The GOP aides “are pushing for greater transparency in the CBO’s dealings with advisers, to shed light on the role of outside interests in shaping the office’s views, the people said,” the newspaper wrote.
That veiled allegation of what — bias? — presents a heavy challenge to an agency that has weathered political storms since its creation in 1974, and that has managed over the years to annoy and sometimes even anger lawmakers of all political stripes because it did not bend readily to political pressure. CBO’s reputation is that it calls them as it sees them, regardless of the fallout.
Others may disagree with the results. And they have, sometimes loudly objecting that CBO is blind to the obvious. But until now, the ump has always been right.
One indicator that the political climate is becoming harsher for CBO came last week, when 37 Republican senators led by
“The purpose of this letter is to encourage CBO to go beyond a purely economic analysis of this decision matrix facing employers. That analysis has already been performed by former CBO Director Douglas Holtz-Eakin,” wrote Johnson and the others.
Political Economy: Shooting at CBO
So, not only were these senators applying public pressure to get CBO to revise its assumptions — and its methodology — they were wielding a former head of the agency as a club. That may be a first for an agency whose former directors constitute a phalanx of prominent economists of both parties.
It’s not yet clear that the letter will open a new front in Capitol Hill’s partisan wars. CBO’s response will be key. There really is no harm in arguing that CBO might want to consider alternative economic ideas. That has happened before, and CBO directors have stood up to the pressure.
In one prominent example, Republican CBO Director Dan L. Crippen during the early years of George W. Bush’s presidency declined to adopt the economic theory of “dynamic scoring,” which many of his fellow Republicans favor because it tends to diminish the cost of tax cuts by crediting them for revenue-inducing economic growth. It has been suggested that Crippen was not reappointed to his post because he would not go along. But CBO still refuses to use dynamic scoring in its legislative cost estimates.
Nor is it clear that this is a partisan issue. Although many Republicans are questioning CBO’s work, some of them are also defending it. Notably, the morning the Wall Street Journal story appeared, Pennsylvania Sen.
So, this all might blow over. Or, given the current mood, it might not. But it would be a notable loss for Congress — and the public — if CBO’s role as an independent analyst of legislative action were somehow damaged in the latest kerfuffle.