What economists think about the Congressional Budget Office

Jeff Cockrell | Mar 23, 2017

Sections Economics Public Policy

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Given that it’s a nonpartisan body with no power to make or even recommend policy, the US Congressional Budget Office (CBO) might seem insulated from political turbulence. But since the work it performs—analyzing and preparing cost estimates for a broad range of policy ideas—is by nature of enormous political relevance, the office’s apolitical mandate isn’t always enough to stave off politically charged criticism.

When the CBO issued a report suggesting that the American Health Care Act—a Republican-designed plan that would largely replace the Affordable Care Act, or Obamacare—would save the government $337 billion but result in 24 million more Americans without insurance, some Republicans took issue with the report, and even with the CBO itself. Former House Speaker Newt Gingrich said the CBO is “dishonest” and “corrupt.” Secretary of Health and Human Services Tom Price, who helped select the director of the CBO, said the report’s figures “defy logic.”

Can lawmakers and voters trust the analyses of the CBO? Chicago Booth’s Initiative on Global Markets recently asked its US economic experts panel a pair of questions on the CBO. The experts unanimously agreed that the CBO has a tough job, and that there’s no reason to assume any errors it makes are ideologically motivated. Eighty-three percent of the panel also agreed that, allowing for its legal restrictions, “the CBO has historically issued credible forecasts” of the effects of proposed policy. 

Oliver Hart, Harvard
“The world is uncertain and even the most careful, conscientious, and skilled people may fail to anticipate some important factors.”
Response: Strongly Agree

Hilary Hoynes, University of California at Berkeley
“My only hesitation is I would say strongly agree if the word substantially was deleted from the sentence.”
Response: Agree

David Autor, MIT
“‘Prediction is very difficult, especially if it’s about the future.’—Nils Bohr”
Response: Strongly Agree
 

Austan Goolsbee, Chicago Booth
“If you choose the CBO director and then say (the) CBO is unfair, you’re either an ideologue or a bad comedian.”
Response: Strongly Agree

Anil Kashyap, Chicago Booth
“The clause is important. They are restricted to (using) current law to project, even when that is going to create errors.”
Response: Strongly Agree

Christopher Udry, Yale
“There is no credible evidence of partisan bias.”
Response: Strongly Agree