Tale of Two Cites

The Congressional Budget Office, the “nonpartisan” arbiter of the cost of various proposals and plans for the legislature, comes in handy sometimes. Other times, not so much.

So House Democrats are discovering anew. Just five days ago Speaker Pelosi vented her frustration with the CBO for its sky high projection for health care reform:

“The CBO will always give you the worst-case scenario on one initiative and never a best case,” she told reporters on June 18, referring to the nonpartisan budget committee, whose cost projections may make or break the legislation.

As such, she would rather the debate use the more tractable OMB’s numbers. But in Monday, however, they were only too happy to tout the CBO report that found “modest” cost hikes for citizens from the Democrats’ greenhouse gas bill:

“This analysis underscores that this legislation is effective and affordable,” Rep. Henry Waxman, D-Calif., one of the climate bill’s chief sponsors, said Monday.

Rep. Edward Markey, D-Mass., also a leading co-sponsor, compared the cost to “a postage stamp a day” and not the economic catastrophe suggested by the bill’s opponents.

It helps their argument that they’re passing over the near-term projections and focusing on the projections for 2020, a projection so far into the future that no-one seriously believes it means anything.

The real truth is that CBO estimates are simply one set of educated guesses. They certainly aren’t holy writ, nor extraordinarily accurate. At best they provide a reasonably consistent benchmark against which to measure programs that are actually put into place. As such, if we’re going to use them at all, we should use them even when their results aren’t to our liking.

FILED UNDER: Congress, Economics and Business, Environment, Government,
Dodd Harris
About Dodd Harris
Dodd, who used to run a blog named ipse dixit, is an attorney, a veteran of the United States Navy, and a fairly good poker player. He contributed over 650 pieces to OTB between May 2007 and September 2013. Follow him on Twitter @Amuk3.

Comments

  1. odograph says:

    I’m not sure I follow your GHG logic. If prices are projected low way out at 2020, the CBO has essentially destroyed “scary” numbers thrown aroundd showing much higher costs way sooner. That is significant.

    … even if 2020 numbers are themselves untrustworthy

  2. Dodd says:

    The article suggests without much by way of specifics that costs are significantly higher in the (more predictable) near term. Waxman therefore appears to have chosen to gloss over that and focus on the costs 11 years out that can be spun as a ‘postage stamp per day.’

  3. odograph says:

    Huh? That seems kind of low content there Dodd. You are saying that since you don’t trust the CBO, you can use any other numbers you please?

    If you think you have better (higher) numbers, don’t you have to make a case for having a better analytical team than at the CBO?

  4. Dodd says:

    I’ve edited the piece to try to clarify my point better. HTH.

  5. Eric Florack says:

    I find this amusing.
    Wasn’t so long ago, the Democrats were beating the Republicans over the head with CBO reports.

    As Leslie Nealson once said: The foot is on the other hand, now. Thus, the deranged screams from Pelosi.

  6. Noah Johns says:

    Wow Nancy sure was a fan of the CBO here
    stating:

    “The Congressional Budget Office’s first analysis of the entire House recovery
    bill makes clear that which experts have been saying all along: the American
    Renewal and Reinvestment Act provides immediate stimulus to help create jobs
    and makes long-term, targeted, and responsible investments to keep our
    nation’s economy growing for years to come.

    “According to the CBO, about two-thirds of the plan’s recovery investments
    will come in the first 18 months after it is enacted. The House bill will
    create jobs, help end the recession sooner, provide tax relief to millions of
    Americans and make critical long-term investments to lay the foundation for a
    stronger economy.