Congress on the Couch, Budget Office Stuck Listening

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I imagine working at the Congressional Budget Office is a little like being a therapist. You believe in what you do, and you hope eternal that your work will actually do some good. Sometimes it does. But most days you’re stuck, listening to the same stories, gently pointing out the same realities, knowing that Congress will continue to talk, complain, and never act.

The CBO answers to Congress, providing it with nonpartisan analyses of economic and budget proposals. Like a therapist, it can’t tell Congress what to do; staffers on Capitol Hill watch the agency closely for signs of bias, and push back when they see it. For the last three years, the CBO has been forced to respond, in its regular Budget and Economic Outlook reports, to Congress’s elaborate defense mechanisms. Congress tells itself that deficits and the debt are important, so it keeps passing laws that pretend it will raise taxes and reduce spending. For two years, it extended the Bush tax cuts in steps, holding out the prospect that some day they would actually end, reducing deficits.

And for two years, CBO has had to take Congress seriously,  evaluating two different scenarios. One, the “baseline,” assumed that Congress did what it had said it would, kept the laws it passed and reduced the deficit. The other, an “alternative scenario,” assumed that Congress would do what it always did and change the laws at the last minute so it could keep spending. This is the CBO’s job. It listens. It can’t mock, or even prod. It certainly can’t order. It just responds, “Well, if that’s what you think will help,” and lays out the consequences.

The CBO cracked a little, in its most recent Budget and Economic Outlook report, released on February 5th. It told Congress, as directly as it could, that it had not met its own goals. Congress finally admitted to itself that most of the Bush tax cuts were never going away, changing the baseline. From the report:

The deficits projected in CBO’s current baseline are significantly larger than the ones in CBO’s baseline of August 2012. At that time, the CBO projected deficits totaling $2.3 trillion for the 2013-2022 period; in the current baseline, the total deficit for that period has risen by $4.6 trillion. That increase stems chiefly from the enactment of the American Taxpayer Relief Act of 2012, … which made changes to tax and spending laws that will boost deficits by a total of $4.0 trillion (excluding debt-service costs) between 2013 and 2022, according to estimates by the CBO and the staff of the Joint Committee on Taxation.

“I know it’s been important to you to reduce the deficit, Congress. Do you feel like you’re making progress? Well, you did change the baseline, didn’t you? It does get harder and harder to make progress once you change the baseline. Mm-hm. Well, I know, change is hard. It’s hard.”

When Congress finally acted, the politicians completely failed to reduce projected deficits, a stated goal of both parties. A more aggressive therapist would ask Congress whether reducing the deficit is, in fact, a priority for Congress. Actions speak loudly. But the CBO is restricted; it can merely listen, nod, and point out the consequences. You can infer a little passive-aggressive hostility, though, when it points out that the new baseline still isn’t the most likely baseline. Again, from the report:

If, for instance, lawmakers eliminated the automatic spending cuts scheduled to take effect in March (but left in place the original caps on discretionary funding set by the Budget Control Act), prevented the sharp reduction in Medicare’s payment rates for physicians, and extended the tax provisions that are scheduled to expire at the end of 2013 (or, in some cases, in later years), budget deficits would be substantially larger over the coming decade than in CBO’s baseline projections. With those changes, and no offsetting reductions in deficits, debt held by the public would rise to 87 percent of GDP by the end of 2023 rather than to 77 percent.

“Congress, have you ever thought that maybe this is a pattern? Your baseline isn’t really realistic in the first place, is it? I know. I know. Well, what do you think you should do? Mm-hm. Mm-hm. O.K., you want to force yourself to re-negotiate the sequester. Well, why don’t you try that? Mm-hm. Good. OK. Well, for the next report, again, try to think about long-term medical spending. Great. Great. O.K., we’ll see you then.”

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