Mick Mulvaney is so angry at the CBO he wants to demote it.

Trump’s Budget Chief Is So Angry at the CBO That He Wants to Demote It

Trump’s Budget Chief Is So Angry at the CBO That He Wants to Demote It

Moneybox
A blog about business and economics.
June 1 2017 2:30 PM

Trump’s Budget Chief Is So Angry at the CBO That He Wants to Demote It

OMB-Director-Mick-Mulvaney-Testifies-Before-Senate-Budget-Committee
How did this guy become budget director again?

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The Congressional Budget Office has not been kind to the Republican health care bill, predicting that the legislation will leave 23 million more Americans uninsured within a decade while sending insurance premiums skyrocketing for older Americans. This has left Republicans in the awkward position of trying to explain away or divert attention from what are obviously some atrocious numbers.

Jordan Weissmann Jordan Weissmann

Jordan Weissmann is Slate’s senior business and economics correspondent.

They've tested a few different angles. House Speaker Paul Ryan, for instance, has decided to accentuate the positive, pointing out that the CBO's forecast predicts lower insurance premiums and lower deficits (never mind that prices drop because health plans will cover fewer services, and the government's savings come from gutting Medicaid). New Jersey Rep. Tom MacArthur, whose eponymous amendment smoothed the American Health Care Act's passage through the House, took another tack, suggesting the CBO's estimates should be taken with a grain of salt like any forecast. "I respect the CBO's role but just because a group of auditors down the block has created a model with ifs, ands, or maybes, that doesn't make it a gospel," he said. "That is somebody's opinion at CBO."

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And then there's White House budget chief Mick Mulvaney. Previously, the former Tea Party congressman has suggested that the CBO simply couldn't be trusted on health care because it overestimated how many people would be covered on Obamacare's insurance exchanges (never mind that its overall forecast about how Obamacare would affect the uninsured rate was right on point). Now he has upped the ante, suggesting in an interview that the office should be demoted from its role as Capitol Hill's official budget scorekeeper because it has apparently become a secret den of hopelessly partisan analysis.

"At some point, you've got to ask yourself, has the day of the CBO come and gone?" Mulvaney told the Washington Examiner's Philip Klein. "How much power do we give to the CBO under the 1974 Budget Act? We're hearing now that the person in charge of the Affordable Health Care Act methodology is an alum of the Hillarycare program in the 1990s who was brought in by Democrats to score the ACA.

"We always talk about it as the nonpartisan Congressional Budget Office. Given the authority that that has, is it really feasible to think of that as a nonpartisan organization?"

In fact, it's perfectly “feasible” to think of the CBO as a nonpartisan organization. Sure, its head of health care analysis, Holly Harvey, apparently served on Hillary Clinton's health reform task force while working at the Department of Health and Human Services in the 1990s. Meanwhile, the office's current director, Keith Hall, was hand-picked by congressional Republicans and was effusively praised by none other than Tom Price, the Trump administration's secretary of health and human services. Hall's right-wing credentials include a stint as chief economist for George W. Bush's Council of Economic Advisers and a fellowship at the conservative Mercatus Center. He was also a critic of Obamacare, suggesting it would lead fewer Americans to work.

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What do you call an organization where career wonks of different political stripes come together in order to compile budget estimates using mainstream economic models? Nonpartisan.

The CBO is, of course, not perfect—and it's fair to criticize the office's methodology. But its historical status as a respected, largely apolitical source of analysis is one of the last remnants of a time when Democrats and Republicans in Washington enjoyed some semblance of shared reality, and a big part of the reason journalists tend to trumpet its findings.

Which is why Mulvaney hates it. It's hard to pass a health care bill when Washington’s last arbiter of consensus on economic matters says it will leave millions without insurance. His solution to this challenge is to simply diminish the CBO's role. Currently, the office plays a crucial part in Congress' budget process—committee chairs rely on its scores to tell whether a bill meets the requirements for budget reconciliation, for instance. Mulvaney would like to move to a more free-floating, post-modern approach, where lawmakers can choose whatever partisan analysis they like. Here's how he explained it to the Examiner, using the example of a regulation on light bulbs:

"I would do my own studies here at [the Office of Management and Budget] as to what the cost and benefits of that reg would be," he said. "And other folks would do their studies from the outside. And those would come with their natural biases. The Heritage Foundation comes in and says it's going to cost a lot. Brookings comes in or the Center for American Progress says the benefits would be great. You and I and other lawmakers can sit down and say, ‘Okay, we think that this is where it is, and we'll make our decisions based upon that.'"
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The CBO would still be around in Mulvaney’s Wild West of economic forecasting. But its authority, and likely its role in public discourse, would shrink.

The somewhat worrisome thing here is that if enough Republicans get as frustrated with the CBO, they might be able to follow Mulvaney's advice and ditch it. Paul Van de Water, a fellow at the progressive Center on Budget and Policy Priorities, told me that Congress' budget committees rely on scores by the CBO and Joint Committee on Taxation as a matter of tradition but aren't required to do so by law.* “Under the Congressional Budget Act, the budget committees are nominally the official scorekeeper. If you read the law literally, the chairs of the budget committees could use estimates from wherever they want. I heard this morning there may have been a couple of times where budget committees used non-CBO estimates, but you can count the instances on one hand.”

Though it's not clear the Senate parliamentarian would allow it now, Republican committee chairs might be able to use analyses by the Heritage Foundation or other conservative think tanks for their budget work, Van de Water said. “It’s a serious possibility,” he told me. “It's not open and shut. But it’s not out of the question.”

I personally doubt Senate Majority Leader Mitch McConnell would ever go for such a thing, if only because it would give Democrats too much freedom if they ever win back the majority. But understand that Mulvaney isn't just spouting off a ludicrous conspiracy theory about the CBO's secret partisan mission to undermine the Republican agenda. He wants to kill off the entire notion of shared reality in politics for the sake of political expedience. And he sort of has a plan to do it.

*Correction, June 1, 2017: This post originally misidentified the Center on Budget and Policy Priorities as the Center for Budget and Policy Priorities.