The voices of Urban Institute's researchers and staff
July 24, 2017

Outside research organizations can’t replace CBO’s budget team

July 25, 2017

The House Freedom Caucus wants to eliminate the Budget Analysis Division at the Congressional Budget Office (CBO) and rely on outside research organizations, including the Urban Institute, instead. As a former acting director of CBO and an Institute fellow at the Urban Institute, I think this is a terrible idea. It would harm fiscal policymaking and weaken the Congress.

Here’s the proposal Representatives Scott Perry (R-PA), Jim Jordan (R-OH), and Mark Meadows (R-NC) offer:

The Budget Analysis Division of the Congressional Budget Office, comprising 89 employees with annual salaries aggregating $15,000,000, is hereby abolished. The duties imposed by law and regulation upon the employees of that Division are hereby transferred to the Office of the Director of the Congressional Budget Office, who shall carry out such duties solely by facilitating and assimilating scoring data compiled by the Heritage Foundation, the American Enterprise Institute, the Brookings Institution, and the Urban Institute.

We certainly appreciate the shout out. Here at Urban, we have amazing researchers who model policies involving health insurance, Social Security, taxes, food stamps, housing, and many other programs. We are proud of our work and try to be as helpful as possible to lawmakers across the political spectrum.

But neither we nor any other private organizations can replace CBO’s budget group. Our skills overlap, but we fill different niches in the policy ecosystem.

Consider the sheer scope of CBO’s responsibilities. As Director Keith Hall noted in recent testimony, the agency expects to publish official scores of more than 600 pieces of legislation in the next year. The scores will estimate the spending and, usually with input from the Joint Committee on Taxation, the revenue implications of every provision in those bills. They will also assess whether the bills impose substantial mandates on the private sector or state, local, and tribal governments.

To do this, CBO has staffers familiar with every nook and cranny of the budget and government, from agriculture to veterans. In just the past week, CBO has published more than two dozen cost estimates covering everything from flood insurance to child care to maritime administration to sanctions on Russia, Iran, and North Korea. Not to mention scoring Senate proposals to repeal and possibly replace the Affordable Care Act. Only CBO and its White House equivalent, the Office of Management and Budget, have the capacity to model every facet of federal spending.

Outside groups could certainly expand their capacities. And Congress could expand the list of anointed organizations. But the bottom line is that these other organizations would need substantial new resources, both funding and staffing. Replacing the capacities of CBO’s budget division is not something research organizations can or should do for free.

But resources aren’t the core issue. In addition to its published cost estimates, CBO provides thousands of confidential cost estimates to members of Congress and their staffs as they craft potential legislation. This service is vital to thoughtful legislating. Confidential feedback helps members test new ideas, consider alternatives, and refine proposals until they are ready to go public.

Outside organizations can, and indeed already do, provide similar modeling help to members. At Urban, we frequently get requests from representatives and senators of both parties. But working through iterations of potential legislation is best done when lawmakers and their staffs work directly with the analysts who will give them official scores. Developing iterations with CBO’s budget team is a much more effective process than trying to coordinate different scores, based on different models and assumptions, from multiple outside organizations.

The most important difference between research organizations and Congress is also the most obvious. CBO works for Congress and only for Congress. CBO works closely with the budget committees and House and Senate leadership to juggle priorities, set deadlines, and provide the analyses Congress needs and wants. CBO obeys congressional budget rules, even when it disagrees with them. CBO has the backing of Congress when it gathers data and information from agencies.

CBO thus has an edge in providing the analyses Congress needs, when it needs them. Research organizations can and do provide timely analysis as well, but there are limits. We have other projects and demands on our time.

Moreover, we outside researchers rely heavily on the work that CBO’s budget analysis division currently does. CBO’s annual baselines, for example, often provide the starting point for our analyses. And CBO scores provide many of the numbers we use to model alternative policies. Eliminating CBO’s budget team would undermine our ability to deliver the type of analyses that Congress wants.

The elimination would also weaken Congress, which created CBO in the early 1970s as part of a larger battle with President Nixon about power over the purse. Congress created CBO to ensure its own source of credible budget information. Defunding CBO’s budget team would weaken Congress at a moment when obtaining objective budget information and striking a balance between Congress and the president are as important as ever.

My colleagues and I would welcome opportunities to provide more help to Congress as members grapple with policy challenges, develop options, and try to understand the range of potential outcomes. But asking us to replace CBO’s budget team would undermine thoughtful policymaking and weaken the Congress.

Photo by Melina Mara/The Washington Post via Getty Images.

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As an organization, the Urban Institute does not take positions on issues. Experts are independent and empowered to share their evidence-based views and recommendations shaped by research.