The CBO Numbers Racket

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The Congressional Budget Office is supposed to report out by Friday on the more than 2,000 pages of President Biden’s plan known as “Build Back Better.” That progressive wish list seems a tall order for what is being sold as the most transformative legislation since the New Deal of Franklin Delano Roosevelt, to whose portrait President Biden gave pride of place in the Oval Office, where George Washington was summarily moved aside.

The CBO’s timeline wouldn’t be the first deadline that has been blown past in this chaos. Democrats panicked after last week’s election returns, which were read as a referendum on their inability to govern. The White House leaned on the House majority to end its impasse and vote on the infrastructure bill pronto. The Progressives proved willing to release the hostage in return for a pledge that Build Back Better would be voted on this week.

Moderate Democrats okayed the deal, provided BBB was scored by the CBO. Since Senate rules forbid taking up a reconciliation bill without a CBO score anyway this seemed prudent. The White House has repeatedly claimed the $1.75 trillion bill would “cost nothing.” That whopper is Washington-speak for saying the bill matches its wasteful spending with tax increases. It is strange that Democrats suddenly care so much about deficit spending.

The “COVID Relief” legislation from March, after all, added $1.9 trillion to the national debt. Even the just-passed infrastructure bill is $256 billion in the red. So there is a lot riding on the CBO number. Senator Sanders Bernie Sanders spox Mike Casca grumbled on Twitter that “House mods are going to use the C.B.O. score — no matter what it says — to vote against the B.B.B.” Others aren’t so sure.

One moderate Democrat, Congressman Josh Gottheimer of New Jersey, said Sunday that he is certain the CBO score will “match up” with the White House “zero cost” claim. This is hardly surprising since the CBO will be using data provided by the Treasury Department and White House to conduct their analysis. Democrats gamed the system by proposing programs that would sunset before the end of the ten-year spending period.

The idea is that they would be renewed later when the heat is off. An analysis of this “permanent extension scenario” by the University of Pennsylvania Penn-Wharton Budget Model puts the true costs of the bill at $4.13 trillion, over half of which would be deficit spending — unless taxes were hiked even higher. It’s silly, though, to think that ten-year budget projections are at all accurate anyway. CBO might as well stand for Crystal Ball Observers.

One study of past performance by the CBO in estimating economic growth shows that accuracy declined markedly beyond an outlook of two years, after which the out-year predictions were no better than “throwing darts.” A 2010 CBO projection of growth in real GDP linked to Obamacare wildly was 50% off its target after six years. A CBO review of job creation under the Obama stimulus bill was infamously off the original estimate that CBO reported.

Our columnist, Lawrence Kudlow of Fox, has been all the scoring game. He has pointed out, among other things, that the top line number for the BBB is less important than the substance of the mammoth. If the House passes it, maybe someone can find out what’s in it. Then the solons could commence an amendment process, triggering another CBO review based on more questionable assumptions and unreliable projections.

What Mr. Kudlow teaches is that one needs to be on top of this game. For the CBO can project economic growth and associated revenue any way it wants to make the numbers match up. Whatever figure the CBO comes up with needs to be coin-bitten, especially when the Biden presidency is supposedly riding on the result. No less a figure than Senator Tester, a Democrat of Montana, notes the projections are “kind of crazy anyway, right?” Not just “kind of.”


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