Monday, August 3, 2009

The Congressional Budget Office (CBO) is an agency of the federal government that provides economic data and analysis to Congress. Created back in 1974, the CBO is supposed to be a “nonpartisan” agency, but the party in power appoints the director, so it still has a political connection to whichever party controls Congress.

The CBO was established to offer independent analysis of Congressional initiatives. They calculate how much these “great” government entitlement programs dreamed up by lawmakers will cost the American taxpayer. Former agency director Bob Reischauer says, “The CBO is a speed bump on the road to fiscal irresponsibility.” In other words, the CBO points out the cost of a bill and Congress largely ignores them. In thirty-five years, the CBO has retained its integrity during both Republican and Democrat majorities- until now.

When the Congressional Budget Office came out a couple of weeks ago with their analysis of President Obama’s health care proposal, they found it would not cut medical costs, but just increase debt. The CBO’s analysis said the bill would increase the federal deficit by $245 billion over the next ten years. The CBO also found the changes to Medicare would only save $2 billion over the next decade. The report was not favorable to Obamacare to say the least. They estimated the program would cost over one trillion dollars in the next ten years. Immediately the White House attacked the report with White House Budget Director Peter Orszag saying the CBO's analysis could feed a perception of the office's bias toward "exaggerating costs and underestimating savings."

So the President invited the Director of the CBO, Douglas Elmendorf, to the White House to discuss the analysis. Elmendorf, a liberal Democrat who has never worked in the private sector, said this on his blog after the visit. “I was invited to the White House to meet with the President, his key budget and health advisers, and some outside experts. The President asked me and the outside experts for our views about achieving cost savings in health reform. I presented CBO’s assessment of the challenges of reducing federal health outlays and improving the long-term budget outlook while simultaneously expanding health insurance coverage. In addition, I discussed various policy options that could produce budgetary savings in the long run. Other participants in the meeting expressed their own views on these various topics.”

Dr. Elmendorf clearly doesn’t understand the function of the Congressional Budget Office. It is not to discuss policy or brainstorm with the Executive branch on how to improve the health care system. The CBO is to analyze what Congressional initiatives will cost and/or save the American taxpayer. House Minority Leader John Boehner, R-Ohio said, “No one blames Mr. Elmendorf for accepting an invitation from the President of the United States. The issue is whether it was appropriate for the White House to invite him to discuss pending legislation before Congress at all.”

Senate Minority Leader Mitch McConnell, R-Kentucky: "I noticed that the CBO director was sort of called down to the White House yesterday. It strikes me as somewhat akin as the owner of the team asking the umpires to come up to the owner's box. If the CBO is to have credibility, they're the umpire. They're not players in this game."

This interaction between the CBO and the White House was unprecedented. When an agency created for analysis and honest evaluation begins to participate in policy, their objectivity will be compromised.

After members of both Parties begin to criticize his White House meeting, Elmendorf wrote on his blog, "Of course, the setting of the conversation and the nature of the participants do not affect CBO's analysis of health reform legislation." Don’t be so sure- it’s clear a line was crossed and a dangerous precedent set. The CBO works for the taxpayer and reports to the Congress. When the agency began to interact with the Executive branch and discuss policy, they have a stake in the outcome, which is a clear conflict of interest.

With this meeting between President Obama and the CBO, American taxpayers may have had a speed bump eliminated that helped slow down Congressional spending. Without the CBO’s objective evaluation, it’s likely to be “pedal to the metal” for Congress.

1 comment:

Benjamin said...

Thanks for this post, it was helpful. The CBO seems to be impartial, but you can never tell these days. It's hard to find accurate budget and financial information. Who can I trust? Frustrating, especially when Obama seems to think he's Boss and can do anything he wants.