We all read, watch and listen to the news quoting the Congressional Budget Office (CBO) when it comes to the U.S. budget. Oftentimes we detect through our eyes or ears the word “non-partisan” before the name of the institution – a guarantee for transparency and equity both to reporters and other people in what’s going on with the federal government spending. How trustworthy are the team of economic and public policy analysts that comprise the CBO though? Is it a myth that it is non-partisan? Who appoints these experts?
In politics, just like in life, everything needs to be questioned. Except for, arguably, some non-partisan monitoring organizations, every other entity’s objectiveness is worth questioning, and the CBO makes no difference to the rule. Here’s the method of research that I will use below:
What is the CBO part of?
Who appoints CBO’s employees?
Are there discrepancies in the CBO’s calculations?
Each of these three questions are relatively easy to answer for journalists, political scientists, economists, financists and possibly accountants but the rest are more unlikely to be aware of these answers. On the one hand – it is non-partisan, but on the other hand – it is congressional which sounds like an oxymoron for Congress is not non-partisan. In fact, if the Congressional Budget Office is part of the government, even in a democracy like the United States of America, then there is room for questioning its non-partisanship.
And in fact, the CBO actually is part of the government – it is a governmental agency, and its employees are treated as employees of the U.S. Representatives when it comes to their salaries. On its website, an explanation about their staff says: “For purposes of pay and employment benefits, all staff are treated as employees of the House of Representatives.” The same page mentions the word “agency,” meaning governmental agency, and governmental agencies are actually treated as subdepartments of the government regardless of whether it is the U.S., German, Japanese, Brazilian or any other government.
The answer to the first question is that it is namely part of the government which to a certain extent questions the literal meaning of the word “non-partisan.”
The answer to the second question is on the same web page that I provided the link for – the Speaker of the U.S. House of Representatives and the President Pro Tempore of the U.S. Senate appoint the Director for a term of four years without term limits, and “the Director appoints all CBO staff, including the Deputy Director.” The President Pro Tempore of the U.S. Senate is the Vice-President – a political position that has become a little more scrutinized by the media and experts, especially after Richard Cheney, the former Vice-President, who has allegedly been the most influential Vice-President in the history of the country. The checks and balances here are that the two “consider recommendations of the two budget committees,” and that either of the two chambers of Congress can remove the Director by resolution. In the meantime, the Democratic-to-Republican ratios in the Senate and House budget committees are currently 13:10 and 24:15 respectively – relatively fair in the Senate and relatively unfair in the House.
The answer to the third question is, to some people’s surprise, yes. The most recent one is the health care bill passed by Congress and signed into law by President Barack Obama. According to calculations of the current CBO, the federal health care overhaul, that costs almost $1 trillion, will reduce the federal budget deficit by $143 billion by 2019. Douglas Elmendorf, the current CBO Director who was appointed to the position on January 22, 2009, which is two days after the new government – a Democratic President and a Democratic majority in Congress’ both chambers – started its work, apparently used these numbers on April 12, 2010 at a World Health Care Congress forum.
However, such calculations are the exact opposite of what Barack Obama, Congressional Democrats and the CBO have been announcing through the media, if we ask a former CBO Director. An opinion article on the New York Times by Douglas Holtz-Eakin, who held the position from February 5, 2003 to December 29, 2005 – apparently during the government of a Republican President and a Republican majority in Congress’ both chambers – suggests that the federal health care overhaul “quickly generates additional deficits of $562 billion in the first 10 years.” One of the reasons for the discrepancies pointed out by Mr. Holtz-Eakin is that “the budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out.”
Some would consider this statement tarnishment of the work of his own administration and his own work (between February 5, 2003 and December 29, 2005) because the budgeting process today is not at all different from the process back then.
While I am a supporter of fiscal conservatism as the more common-sense approach to spending of a government in a deficit – the purpose of writing my article was to show you that the CBO is probably not as non-partisan as the real meaning of this word, and also the objectivity its calculations could be questioned just like a government could be questioned.