CBO

As I explain in my column from today's Roll Call, it says everything you need to know that, even by today's federal budget standards, Newt Gingrich's recent verbal attack on the Congressional Budget Office was absurd.

Take a look.

Newt Gingrich Wants to Kill the CBO Messenger

Former Speaker and current GOP presidential candidate Newt Gingrich might well have said that he wants to kill his personal physician because he didn’t like being told his blood pressure was too high.

But that’s the equivalent of what Gingrich did say during a recent debate, when he made it clear that the Congressional Budget Office has to be eliminated if health care reform is going to be repealed.

The Congressional Budget Office estimated subpar economic growth (2.3% real GDP CY11 4th Q over 4th Q and 2.7% CY12) and an FY11 deficit of 8.5% of GDP and FY12 of 6.2%.  The deficit falls sharply to 3.2% of GDP in FY13 and to 1.6% of GDP in FY14 because of the budget savings of the Budget Control Act of 2011, S.365, and the assumed expiration of the payroll tax cut and extended unemployment insurance at the end of this year and of the Bush tax cuts at the end of next year.  In my opinion, most, if not all, of the Bush tax cuts will be extended, adding 0.2% to 0.3% of GDP to the deficits.  With the likelihood that the Joint Selection Committee on Deficit Reduction will deadlock and that most of its roughly 0.7% of GDP savings will be achieved by the January, 2013 sequester, the FY13 and FY14 deficits are more likely to be around 4% of GDP.  See pp.26-7 for estimates of alternative policy outcomes.

It's not at all clear whether Republicans or Democrats will end up being the political winner of health care reform, but it is absolutely certain that the Congressional Budget Office came out of the debate in a far better and more highly esteemed position than when it began.

At some point during the health care debate:

Congressional Budget Office Director Doug Elmendorf addressed the National Economists Club luncheon today in D.C. He started with the good news: "In the near term (FY10-FY12), we expect the economy to recover." However, his job outlook was grim: "More pain of unemployment lies ahead of us than behind us." That's because this recession has had much more permanent job loss than past recessions and because our recovery is likely to be weak, with subpar job growth. We've lost 8.5 million jobs so far, and it would take 11 million new jobs to reach the level we would have had if the recession hadn't occurred. He expects the unemployment rate to drop to 5% by FY13, but, "That's a long ways away."

That’s what former Joint Committee on Taxation Chief of Staff Ed Kleinbard proposed in footnote 111 on page 43 of this draft paper recently. He stated: “It is the author’s view that the CBO [Congressional Budget Office] is better suited to this task [scoring tax bills] than is the JCT Staff, from the perspective of both the relative stature and the independence of the two organizations.” 

First, I worked on the Joint Committee on Taxation from March 1, 1974 until February 1, 1981, and I maintain strong ties there. 

Second, along with other Joint Tax staff, I helped pass the 1974 Congressional Budget and Impoundment Control Act which set up CBO. Ever since, Joint Tax has supported CBO every step of the way, often without getting much credit. I personally pulled a lot of all-nighters to supply CBO with estimates, as have Joint Tax staff ever since.