Later On

A blog written for those whose interests more or less match mine.

The Trump administration detests the Congressional Budget Office. Here’s why it’s important.

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Philip Joyce reports in the Washington Post:

The Congressional Budget Office (CBO) is under attack again.

Trump’s Director of the Office of Management and Budget (OMB), Mick Mulvaney, recently said that “the time of CBO has probably come and gone,” noting that there are plenty of other places, including the OMB itself and Washington think tanks, that can estimate the costs of policies. Mulvaney is far from the first official to disagree with the CBO’s numbers, but he is one of very few people who want to get rid of the CBO altogether. He joins former House speaker Newt Gingrich, who has been trying to gut the CBO for decades. In fact, a 1995 argument by Gingrich that the agency should be cleaned out prompted The Washington Post, in an editorial, to remind readers of the important role that CBO had played as “an excellent skunk” at the “congressional picnic.”

The problem for Congress — even a Republican-dominated Congress — is that the CBO is useful. The CBO was created intentionally to strengthen the Congress in its battles with the president, which have happened both when the president and Congress are dominated by different parties and when there is unified rule.

The CBO is the product of fights over budgets

The CBO was created as part of the congressional Budget and Impoundment Control Act of 1974, which looked to resolve what Allen Schick has called the “seven-year budget war” over who shaped the budget process. This act reasserted Congress’s role in budgeting, including budget committees in each house, and a new agency — the CBO — that would serve as a nonpartisan source of numbers and analysis. Without the CBO, Congress would have had to depend on OMB — which works directly for the White House — for economic and budgetary figures which it needs to participate in budget making.

The first director, Alice Rivlin, was appointed in February 1975 and had to build the agency, including its capacity to estimate costs and make forecasts, from scratch. Rivlin also made the crucial decision that CBO would not make policy recommendations, as she was concerned that doing so might make the nonpartisan role untenable. Rivlin, who was a lifelong Democrat, described herself as a “card carrying middle of the roader.”

The eight subsequent directors (five nominal Republicans — including current director Keith Hall — and three nominal Democrats) have followed Rivlin’s lead as centrist and professional voices in budget and economic debates. My own research on CBO — based on the only book-length history of the agency — suggests that the CBO has put Congress on a more equal footing with the president, changed how policymaking works through cost estimates, and helped federal budget making become more open and transparent.

The CBO has helped Congress challenge the arguments of presidents

Since its early days, the CBO has poured cold water over the optimistic policy arguments of Democratic and Republican presidents. Jimmy Carter’s energy policy and Ronald Reagan’s supply side economic estimates both fell victim to CBO analyses. When Reagan tried to get Senate Republicans to remove Alice Rivlin as director (the law provides that either chamber can remove a CBO director by majority vote), Majority Leader Robert Dole and Senate Budget Committee Chairman Pete Domenici refused, understanding that such an action would be an attack on the independence of Congress.

The CBO has continued to cause controversy over presidential policy initiatives. It challenged  Clinton administration estimates of the fiscal effect of its “reinventing government” revisions and George W. Bush administration claims about the cost of adding a prescription drug benefit to Medicare. The Obama administration and CBO clashed over the employment effects of the Affordable Care Act and the job effects of a proposed increase in the minimum wage. In both cases, the White House went on the offensive to challenge the CBO analysis.

It has helped Congress estimate the costs of legislation

The CBO provides Congress with an objective source of information on the cost of individual pieces of legislation. Before it was created, the committees or groups proposing changes in policy often estimated the costs and were sometimes exuberantly optimistic.

For the past quarter-century, . . .

Continue reading.

Written by LeisureGuy

14 June 2017 at 12:09 pm

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