“Congress used CBO to get the answer they wanted. I get that. I ran the CBO. They used me too.”

Last March, as House Democrats were preparing for their final votes on the Patient Protection and Affordable Care Act, Douglas Holtz-Eakin published an op-ed in The New York Times arguing that, despite Congressional Budget Office scores indicating otherwise, the president’s health care overhaul would in fact increase the nation’s budget deficit by hundreds of billions of dollars over the long term. Since then, he’s become one of the most prominent critics of the claim that the law will result in a smaller deficit, expanding his critique in co-written pieces for Health Affairs and, most recently, The Wall Street Journal.

Holtz-Eakin, who currently heads the American Action Forum, isn’t just any critic: From 2003 to 2005, he ran the Congressional Budget Office himself. His time at the CBO gave him great respect for the office's capabilities and the quality of its work. It also gave him firsthand knowledge of the scoring process, its inherent limitations, and the ways that determined members of Congress can use the process to their political advantage.

I spoke with Holtz-Eakin earlier this week about why the CBO isn’t to blame for the deficit projections associated with the health care overhauls, how the law’s backers have responded to criticism of the official scores, and why, when it comes to legislation, the CBO isn’t god—no matter how convenient it may be for legislators to say so.

Suderman: A lot of the PPACA’s defenders seem to be accusing critics like you of trying to have it both ways on the CBO. On the one hand, you use their estimates pretty frequently for things like job losses associated with the law or projected spending growth of the new entitlement programs. On the other hand, you’re saying that CBO’s deficit numbers are probably wrong. How do you respond to that?

Holtz-Eakin: I have nothing but the highest respect and admiration for the quality of the estimates that CBO produces. Period. I have nothing but a deep understanding of the rules by which they must use those estimates, and the way the law was written in order to get the deficit reduction bottom line—by reading out some costs, using budget gimmicks, putting in unrealistic estimates of future Medicare reductions. None of that has anything to do with CBO’s competence or professionalism. That’s a congressional problem. Congress used CBO to get the answer they wanted. I get that. I ran the CBO. They used me too. So, I don’t think it’s having it both ways. I’ve always defended CBO’s work. I’m complaining about the way that Congress wrote the law.

Suderman: To clarify, I think the complaint is not only that you are criticizing the CBO for doing a bad job. I think part of the criticism is saying that you can’t criticize their numbers on the one hand, but then rely on their estimates when it’s convenient.

Holtz-Eakin: I think you should use their numbers in an informed way. And that’s all I’m asking. I’m trying to inform people in the way in which the particular bottom lines here have been developed.

Suderman: Similarly I’m hearing people complaining that criticism of the scoring leads to a reduction in the CBO’s authority, therefore a more politicized and polarized and unreliable scoring process.  

Holtz-Eakin: That’s nonsense. The CBO has no authority. People don’t know what they’re talking about. All scoring is done officially by the Budget Committee—they are the official scores in the House and the Senate. CBO is strictly advisory in all circumstances. And its role has been to advise the Budget Committees since 1974 on the appropriate budgetary impacts of legislation. It has been convenient for the Budget Committees to assert the CBO is a god, and to hide behind them. But it’s not in fact correct.

Suderman: Some of the response to criticism of the CBO’s scoring seems to stem from the notion that we’re better off with a single neutral arbiter. But I’ve always felt that one of the best things about the CBO is that it serves as a check on the administration, and in particular the Office of Management and Budget. Is it accurate to say that competitive pressure already affects the projection process? Do you think more competitive pressure could help?

Holtz-Eakin: All monopolies are bad, and CBO was created to break the OMB monopoly. And in a similar fashion, while I don’t want to have multiple official scorers, and a competition of that sort,  I do think it’s helping to have multiple research entities opining on the budgetary cost of things. That’s helpful, in the same way the Tax Policy Center is a useful competitive pressure to the Joint Committee on Taxation, and how Heritage has its Center for Data Analysis. These are all beneficial. The more numbers that are out there, the more people discussing the foundation of those numbers, the better off the process is.

Suderman: When the CBO goes about the scoring process, it often involves somewhat arbitrary decisions. Can you talk about that?

Holtz-Eakin: The first and foremost thing to recognize is that "scoring" is just that. It’s not forecasting. It’s scoring. And the analogy I always use is, in football a touchdown is six, kicking an extra field goal is one, and running it over is two. Why? I have no idea. But by having that set of rules for scoring, you can compare games across time, across teams, and across all sorts of situations, because you have a common thread of scores. So the most important thing about scoring is to apply the same rules to every bill. Every time a new iteration of the health care bill it was either more or less expensive. And we knew something like the relevant ordering of it. So that’s its top priority.

That means that when CBO has to make a call, it should make that call in a similar fashion every time while you’re debating legislation. Sometimes you have to make calls that you don’t have much information about. In that sense they’re are arbitrary. But I don’t think that that’s a bad thing, as long as it’s done in a nice statistic fashion.

There’s a second goal: to be not only consistent across legislation, but to be accurate in its forecast. CBO certainly tries to do that. But it operates in an environment where there’s a ton of uncertainty. The most important pieces of legislation are the hardest, because they’re new and by definition harder to evaluate.

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  • ||

    und yet de costs vill be offset by seizing profits from nationalized hospital. dumas schweinen

  • ||

    Retard alert!

  • ||

    I didn't know Jeremy Piven had ever run the CBO.

  • Matrix||

    lol, he does look like him, except with a bit less hair on top

  • ||

    "You want to hug it out? Let's hug it out, bitch."

  • hmm||

    Give me 20 minutes and a calculator and I can pencil fuck prove an elephant hanging from a cliff with its trunk holding onto a daisy and prove it creates or saves millions of jobs and billions of dollars.

    Unfortunately you throw out numbers and 90% of the population takes them as the gospel truth regardless of where they come from.

  • hmm||

    no clue how that other prove got in there other than the fact imatard.

  • Old Liberal||

    There's something quintessentially symbolic that shows on TEAM RED and TEAM BLUE operate when it comes to the CBO.

    TEAM BLUE doesn't get the result they want, they bitch, then keep coming back and back, with more ideas, and more numbers, till they get what they want.

    TEAM RED doesn't get what they want, they bitch, keep bitching, then remind their followers that numbers don't matter, because both sides do it anyway.

    Mr. Holtz-Eakin is a proud follower of this proud tradition, as he sits athrwart history with his fingers in his ears shouting: YOUR NUMBERS DON'T MATTER BECAUSE!!!

  • ||

    The CBO should be housed with the Censor.

  • Gilbert Martin||

    Just look at at how far off the estimates the government came up with for Medicare spending when it was created in the mid sixties.

    That alone should tell anyone with more than two brain cells to bump together that government estimates of the costs of massive new entitlement programs doesn't mean diddly squat.

  • Mensan||

    Generally, if you take any government budget estimate, and multiply it by six, you end up in the ballpark of the actual number.

  • ||

    Of course the CBO can have authority. Holtz-Eakin's rejection of a commonly used definition - "an accepted source of information, advice, etc." says M-W.com - is silly.

    I'm disappointed in you for not calling him on it - it's a definition any journalist should consider an important one.

  • ||

    Peter, I've told you:

    Only knobs use the "Pee-Packer" designation for ObamaCare. Call it ObamaCare already. Truth in advertising, and all that.

  • Joe R.||

    I prefer PelosiCare.

  • Some Guy||

    This interview is completely lacking in content. That entire last response was a bunch of empty verbiage. Does the CBO not try to make the same call across different pieces of legislation? Are the CBO's numbers regarding unknowns actually arbitrary? Or are they best guesses with huge error bands? Or does Holz-Eakin not know what "arbitrary" means? I suspect he does and I suspect he knows that the CBOs guesses aren't arbitrary.

    This interview reads like an attempt to muddy the waters; to paraphrase his points:
    1) The CBO does its best and can only score the legislation it is given.
    2) The CBO is right about the ACA, though there's uncertainty.
    3) The CBO acts somewhat arbitrarily, but that's nice. (This was the result of Holz-Eakin's politness at a poorly worded question.)
    4) The ACA was written in such a way as to force the CBO to give it a good score. The unrealistic assumptions in there mean that the law won't be implemented as written (ie it will be superseded by some other law, like the annual Doc Fix from the 90's changes to Medicare).

    So really, 1) the CBO did it's job, 2) as written the JKHCA will reduce the deficit, and 3) the problem isn't with the ACA, it's with some future pieces of legislation.

  • ||

    I agree with what he's attempting to illustrate with the football analogy, but he totally screws it up by using bizarre terminology (extra field goal?) and referring to a type of score that has not existed during most football history (the 2 point conversion) right before saying it can be used to compare games from different eras.

  • ||

    It's just what's expected when accountants or climate doom and gloom alarmists put values into an equation. In the case of climate models they spend much time as possible developing models that will give the desired results. DemonRats gave them the BS numbers to put in and developed the equation necessary to forge their desired result.

    Unlike Papa Johns Pizza, bad ingredients, nasty pizza!

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