Imagine your family puts together a budget. Once you and your loved ones have made financial plans for various expenses and long-term needs, you show it to your family accountant to see if you’re on the right track.
The accountant, much to your chagrin, notices some important flaws in the numbers you’ve put together. In some cases, your arithmetic is off, and in other cases, you made unrealistic assumptions.
At that point, you have a choice about what to do next. If you’re thinking, “It’s clearly time to fire my accountant,” congratulations, you’re ready to join the House Republican leadership. Dave Weigel had this important scoop yesterday.
Incoming Republican leaders in Congress won’t reappoint Doug Elmendorf to another term as head of the Congressional Budget Office, according to a party aide briefed on the decision.The move comes after a campaign from conservative lawmakers who want to change the way the CBO calculates the costs of government, said the aide, who requested anonymity to discuss a personnel decision. The office provides nonpartisan budget analysis for members of Congress that includes estimates of the cost of legislation.
I have a hunch Elmendorf, despite four highly consequential years on the job, probably hasn’t attained “household name” status, but as the head of the Congressional Budget Office, he’s chiefly responsible for telling lawmakers – and by extension, all of us – how much stuff costs.
And for the most part, Elmendorf, a respected economist before taking over at the CBO, has been pretty good at his job – so good that plenty of Republicans urged party leaders to keep him around now that his term is ending. Indeed, the argument from mainstream conservatives is that Elmendorf could extend meaningful credibility to GOP proposals through favorable scores – if Elmendorf said Republicans’ numbers add up, everyone else would know GOP lawmakers were taking their responsibilities seriously.
By giving him another term, the argument went, Republicans could send a clear signal: the new GOP-led Congress had no interest in playing dubious budgetary games. But by showing Elmendorf the door, it seems Republicans may very well do the opposite.
In this case, it all comes down to something called “dynamic scoring.”
When the Congressional Budget Office publishes a “score,” it offers an official price tag of sorts, hoping to make clear what a proposal will cost, how it will affect the deficit, how it will affect revenues, how will it shift unemployment, etc. Sometimes the CBO is correct and sometimes it’s not – especially over the long term, we’re dealing with projections that are subject to considerable change – but the scores are at least based on verifiable data. (Lawmakers in both parties will often massage the structure of a bill to get a favorable CBO score, which can diminish the reports’ utility, but that’s another conversation for another day.)
Republicans, however, don’t like the way the CBO comes up with its scores because, as the right sees it, non-partisan economists don’t realize the magical, macroeconomic benefits of tax cuts. The CBO looks at a tax cut and determines its cost, but Republicans insist that those price tags are misleading – conservatives want the CBO to assume that tax cuts necessarily produce greater economic growth, which in turn generates more revenue, which in return reduces the real-world cost of the tax cut, possibly even to $0. (They also want the same assumptions made about tax increases, only reversed.)
The fear for months has been that Republicans would dump Elmendorf and choose a new CBO chief that would, quite simply, tell far-right lawmakers what they want to hear. If Weigel’s reporting is accurate, that’s apparently the direction the new Congress intends to go.
Why should anyone care? Because congressional Republicans want to make it easier for themselves to manipulate arithmetic for ideological ends. To borrow a Greg Mankiw analogy, the CBO is supposed to be the referee in these Capitol Hill fights, and Republicans seem a little too eager to handpick their own ref who’ll make the “right” calls.
And once the referee is aligned with the congressional majority, Republicans will eagerly push their legislative agenda, boasting about their amazing CBO scores. “What do you mean we’re cooking the books?” they’ll ask. “We have a favorable score from the non-partisan Congressional Budget Office right here.”
It’s not hard to imagine upcoming fights – over tax reform, health care, budgets, etc. – in which Democrats and Republicans not only offer wildly divergent plans, but also bolstered by their own macroeconomic reports. The prospect of arithmetic doing battle with a conservative-endorsed version of arithmetic is quite real.
Elmendorf has a reputation for impartiality. For Democrats, that’s a feature; for Republicans, it’s a bug.