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CBO Could be Hurt Badly By Health Care Debate

29 Jul 2009
Posted by Stan Collender

At this point there's little doubt  that CBO is coming under attack from health care reform proponents for its analysis.

For example, take a look at this column by Bruce Vladek in yesterday's Roll Call.  Although there are many, here's what I consider to be the money quote:

...CBO’s track record in predicting the effects of health legislation is abysmal. Over the last two decades, the CBO has routinely overestimated the costs of expanded government health care benefits and underestimated the savings from program changes designed to reduce expenditures.

This is actually a debate that's been raging for weeks in a variety of ways within the budgeting community.  I received a lengthy e-mail several days ago from a friend and budget scholar (whose name and material I don't have permission to use) that went into great detail about this.  That's typical.  After all, a discussion on estimating techniques is the stuff that dreams are made of for many budget wonks.

But when the situation changes dramatically when the discussion breaks out into the open as has happened with the very public dispute on this issue between Office of Management and Budget Director (and immediate past CBO Director) Peter Orzag and the current CBO Director Doug Elemendorf.

Here's what Elmendorf posted last Friday...

and here's the money quote from what Orzag posted in his blog on Monday:

In providing a quantitative estimate of long-term effects without any analytical basis for doing so, CBO seems to have overstepped.

That may seem gentle, but it's as close as you get to a knife fight among federal budgeteers.

This has happened to CBO before, most notably over whether it should use static vs. dynamic modeling when estimating the impact of a proposed tax change.

But the health care dispute has the potential of pemanently damaging CBO's reputation and authority because it is happening in what has become a take-no-prisoners partisan environment.

You are absolutely right.

You are absolutely right. And let's not forget Tim Westmoreland's critique of biased rules at CBO, which I discuss here:

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