The Congressional Budget Office (CBO) has been in the news a lot during the health care debate, most recently today when all eight of its former directors signed a letter refuting accusations that the agency’s work is partisan or based on bad methodology. Reporters, advocates, and experts eagerly anticipate CBO’s report every time a new proposal is released, and those findings are playing a huge role in how the different proposals are received. That means it is important to understand what CBO is and where the agency came from.
CBO’s job is to provide an independent analysis of policy proposals without making any policy recommendations – it is sometimes called the referee of Congress. It was created during the Nixon Administration so that members of Congress did not have to rely on findings from an agency controlled by the President (the Office of Management and Budget or OMB) when debating policy. The director of CBO is appointed by the Speaker of the House and the Senate’s President pro tempore (a person chosen by the rest of the Senate). The current director, Keith Hall, was appointed by Senator Orrin Hatch and Speaker John Boehner in 2015 and had previously served as the Chief Economist on President George W. Bush’s Council of Economic Advisors.
CBO starts its assessment of policy changes by calculating what it calls a baseline. The baseline shows what will happen in the next ten years with no policy changes. This is important because spending will look different ten years from now even without policy changes. For example, our population is getting older so even with no changes to Medicare, spending on Medicare may change. It would not be accurate to assess a proposal related to Medicare and assume that we’ll still have the same proportion of elderly people as we do today. Once CBO has developed its baseline, it performs its calculations again and includes the proposed change. When CBO reported that the health bills would increase the number of people without insurance, it is in comparison to leaving the ACA as it is.
When CBO and OMB develop different findings, it is not always because someone is being partisan. Sometimes it is simply because the work they do is very complicated. However, CBO has a track record of making people from all parties uncomfortable. It also has a better track record on accuracy than other government bodies that are more exposed to partisanship, like OMB. The eight former CBO directors who signed today’s letter were appointed by Republicans and Democrats, and each released findings that were upsetting to both Republicans and Democrats during their tenure.
CBO works for Congress as a whole, not for one party. It is certainly possible that the final number of people who go uninsured because of these bills won’t add up exactly to CBO’s 22 million or 32 million. But the margin of error for those reports is not so large that they can be dismissed outright. Whether it turns out to be slightly more or less than the exact numbers in CBO’s reports, tens of millions of people will lose their health insurance under either of the health proposals circulating right now.