All Commentary
Wednesday, May 24, 2017

The CBO’s Forecasts Are Bogus

The models use static assumptions that have nothing to do with economics.

Today the Congressional Budget Office (CBO) will announce the score of the American Health Care Act (AHCA), the Trump administration’s plan to replace Obamacare. The House of Representatives has already voted on and passed the AHCA, despite not having a score from CBO, an element that has added more controversy to an already controversial bill.

The House’s actions underscore a deeper problem within the process of legislating – CBO does not disclose its methods for scoring bills to the public, leaving policy makers and legislators at the mercy of their timing and expertise. AEI budget expert Matt Jensen is available to comment.

Why did the House have to vote on the AHCA without a cost estimate? Because the CBO does not share its economic models. If the CBO made its models opensource — publicly available for all to see and use — then Congress and the public could have been using those models for the last seven years to craft better policy. Instead the CBO is secretive, their models can’t be reviewed or improved by outside experts, and lawmakers have to vote on bills without cost estimates.

This piece ran first on the AEI blog

  • Matthew Jensen is the founder and managing director of the Open-Source Policy Center (OSPC) at the American Enterprise Institute. The center is dedicated to making policy analysis transparent and accessible through open source computer modeling.OSPC products include the TaxBrain web application, which allows policymakers, the media, and the public to have access to tax policy calculations and analyses. Mr. Jensen is also a core contributor to open source modeling projects including Tax-Calculator and TaxData.