The Congressional Budget Office, or CBO, is all over the news these days. It was originated through the Budget and Accounting Act of 1921, under the name Bureau of the Budget. It was change to CBO in 1974, likely because the term “Bureau” reeks of the detested word “bureaucracy.” It claims to be non-partisan. Under any name, and under any pretense, CBO is an abject disaster.
It’s not their fault. Like most of the ills in Washington, D.C., blame should be placed at the feet of the Congress.
In my opinion, CBO should stand for “Congress Blames Others.”
The latest evidence of CBO inaccuracy comes from the two “scorings” of health care proposals by the Senate and the House of Representatives. “Scoring” a Bill from Congress means examining the impact, in terms of cost (or savings), and the number of affected Americans. They are always wrong!
Why? It is simply because of the rules established by Congress, which require static analysis, rather than dynamic analysis. The difference is “merely” that static ignores behavior of people in response to a proposed change, whereby dynamic accounts for changes in behavior in response to changing circumstances.
Right now, Senate Republicans are wrestling with a replacement for ObamaCare, and for several reasons they are having a great deal of difficulty. One of the sticky points comes from CBO scoring. Under CBO rules, when 20 million Americans are no longer forced to buy health insurance, it is considered axiomatic that 20 million less people will have insurance coverage.
Those are CBO rules, but they do not reflect reality. Millions of people, when confronted with a choice among reasonable insurance plans, will voluntarily purchase insurance. Businesses will also be better able to offer employee benefits, including health insurance.
The anti-Republican media are bombarding the airways with the “news” that CBO projects that 20 million people will be forced to lose “health care,” (they mean “health insurance coverage”) because of Republicans. Such reporting constitutes a great disservice to the American people, brought to you by a Congress that imposes unreasonable and inaccurate rules on the CBO.
On Thursday of last week, the CBO struck again, this time refuting the Trump Administration’s claim that the budget will be balanced in 10 years. I have absolutely no idea whether the budget would balance or not, but I know one thing; the CBO is wrong, at least to some extent.
Rules set forth by Congress for the CBO don’t allow the CBO to count expected behavioral changes in producing their estimates. This is patently absurd, as it will always produce incorrect results.
CBO is experimenting with dynamic scoring in their 20-year budget planning. Seriously, 20 years? They can’t even get 10-year estimates within a reasonable error margin! Weather forecasts more than 3 days out have proven unreliable, yet 20 year projections of economics and human behavior should be reliable? What could possibly go wrong?
Finding the annual budget of the CBO has proven to be a difficult search. Suffice it to say that closing CBO altogether would save us all a lot of money; not just by what they spend in their operating budget, but also in the damage they do by “scoring” bills incorrectly. Congress is out of control on spending, and we must get it stopped. Eliminating the CBO would constitute a good start.
I’m not blaming the CBO. They play by the rules that Congress mandated. I know better than to call for Congress to change their ways. Let’s just shut down the CBO and let Congress find a new scapegoat.
A guy can dream, can’t he?