THE BLOG
12/09/2014 09:07 am ET Updated Feb 08, 2015

Honor the Budget Wonks

One of the bitterest battles in Washington is the quadrennial squabble over who will lead the Congressional Budget Office (CBO), Congress's counterpart to the Office of Management and Budget (OMB). Created in 1974, the CBO is charged with providing Congress with nonpartisan budget numbers -- how much money is coming in, how much is going out and, perhaps most importantly, how much a given legislative proposal is likely to cost. The term of the current CBO Director Doug Elmendorf will expire in January.

There are many who believe Elmendorf has done a good job and should be reappointed to another four-year term but no CBO director since the first one, Alice Rivlin, has served two terms. All of the CBO directors since Rivlin have been qualified, credible people but they can never seem to please their bosses -- the 535 members of Congress. Four years and out is the norm, and Elmendorf is unlikely to buck that trend.

The basic problem is that CBO is mandated to provide Congress with the one thing few members of Congress really want -- objective numbers. People who know CBO well, including many who have worked there, invariably testify that the employees are scrupulous to a fault avoiding any hint of partisanship. But their integrity goes unappreciated and unrewarded by the lawmakers almost all of whom are intensely partisan.

The CBO does produce some specious numbers but that is because of the often unrealistic assumptions Congress requires it to follow. When CBO "scores" a proposed piece of legislation, it must respect the assumptions of the law's authors which are more often than not exercises in wishful thinking, and sometimes efforts to conceal bargains designed to benefit generous political supporters.

At best, when lawmakers promote legislation, they want CBO to confirm there will be innumerable benefits and little or no cost. When CBO declines to participate in this scam, it is roundly condemned by the legislators, sometimes during public hearings. The CBO people have to just sit there, smile wanly and accept the whipping.

The Wall Street Journal has already commenced its predicable drumbeat of CBO bashing in an attempt to influence the selection of the next director. The Journal's beef is that CBO does not embrace "dynamic scoring" which would require it to assume that tax cuts will be offset by the increased economic activity they would presumably generate. CBO acknowledges that tax cuts can spur economic growth, but contends there is no reliable way to measure the impact.

Appointment of CBO directors rotates back and forth between the Senate and House Budget Committees. This time it is the Senate's turn. The amazing thing about this haphazard system and the conflicting pressures on CBO is that the agency somehow always retains its objectivity and integrity. When political scientists say democracy depends on credible institutions, they are talking about institutions like the Congressional Budget Office.

Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. You may quote from this with attribution. Let me know if you would like to speak with Jerry.