(Bloomberg View) — I’ve been a longtime critic of how the Congressional Budget Office process was gamed to pass the Patient Protection and Affordable Care Act (PPACA) — “Obamacare.” So you might think I’d be a full-throated supporter of the idea that Republicans need to clean house at the CBO. Actually, I’m in the opposite camp: The CBO is fine. It’s the politicians who are the problem.
Doug Elmendorf is a very fine head of the CBO, and I think it would be splendid if Republicans reappointed him to head the office. (I’m pretty sure they won’t, for various reasons, but I think he would do a great job if they did.) There are a lot of credible right-leaning people who could also do a great job. And none of them are going to “fix” what is wrong with the CBO, because the CBO is basically working pretty well. I’m not saying I might not quibble with some of its modeling choices, because this is America, darn it, and it’s a citizen’s sacred right to quibble. But they’re very smart people who know what they’re doing, and they are doing as best they can to give fair estimates of what things will cost and what they will do to the economy.
The problem with the CBO is that any such project requires certain procedural conventions. For example, it forecasts over a set period in order to make choices easily comparable and to reduce the uncertainty in its predictions. (The longer your model runs, the more the unforeseen circumstances pile up.) It forecasts based on current law, because otherwise the model would be defined by an analyst’s intuition about the future course of elections and legislation. It uses models that generate fairly predictable responses to various inputs. And so forth.
These predictable conventions are an excellent idea. Without them, CBO forecasts would be mercurial reports subject to heavy bias toward the policy preferences of the analysts. I know that Republicans think the CBO was giving Democrats a helping hand in gaming the system, but if anything, the opposite was the case — Elmendorf went out of his way to emphasize the uncertainties that underlay the headline numbers.