When It Comes to CBO Reports, Trust but Verify

It’s not secret that the first big target on the new Republican majority’s hit list is Obamacare. The Democrats who passed it have already begun their defense in the form of a report from the Congressional Budget Office that says an Obamacare repeal will add $145 billion dollars to the deficit over the next eight years. Rep. Paul Ryan, the Chair of the House Budget Committee has countered with a report of his own, using the Democrats’ own CBO report, that says Obamacare, if left alone, will add over $700 billion to the deficit over the next ten years.

Obviously, they both can’t be right. Obamacare will either reduce the deficit or add to it, but who is correct? As it happens, what it obvious is not actually so. The CBO report is correct and Paul Ryan’s estimate is also correct. Confusing, no? The secret to understanding why this is so lies in understanding how the CBO generates its scoring reports.

To do that, we should start with an analogy.

Imagine you wanted to invent a new diet — call it the “Eat All the Big Macs You Want, Exercise Ten Minutes A Day, and 100 Pounds A Year” diet. You’re going to need a medical professional or two to stand up your plan, so you grab a couple physicians and ask them to review your diet. But as part of their review, you give them a couple strict instructions they have to follow.

1) Big Macs only contain 100 calories.

2) Exercising ten minutes a day will burn off 1000 calories.

3) No other food will count as part of the calculations.

Now, given those instructions, it’s very likely that your two doctors are going to want to argue with you. There’s no way a Big Mac contains 100 calories. exercise doesn’t work that way, and you can’t simply ignore anything else your dieters might eat. That’s not the way a diet works. they’d be exactly right, too. In fact, their final report would likely call you an idiot for making those assumptions and they’d probably say that you diet would cause people to blow up like Macy’s Thanksgiving Day parade floats. And they’d be right.

But, what if they had to accept your instructions? What if they had to use only the data you gave them? Well, then they’d give your miracle diet a big, fat thumbs-up and you could wave their report around like it was gospel truth.

This is how the CBO works. Though it is nonpartisan, that is to say that it can’t favor one party over the other, it is also not allowed to think for itself.  When Congress asks the CBO to score the cost of a bill, it can only use the assumptions given to it. Even though, for example, we know Obamacare double-counts potential savings from Medicare and there’s no way one dollar can be spent here and there, the CBO has to work as if that contradiction doesn’t exist. It has no choice. Like your doctors, it has to use bad data and, like your doctors, it’s going to produce a bogus report with a patina of legitimacy.

So when Harry Reid hauls out that CBO report and talks about deficit savings, he’s not wrong. The bill, as presented to the CBO will save billions of dollars…on paper. But as often happens when progressives come up with another utopian scheme, we didn’t get the whole truth. The whole truth is as Rep. Ryan has said today. Obamacare is loaded with tricks and impossibilities put there on purpose to drive down the CBO score. The report was rigged and not one of their deceptions will survive contact with the real world. Now, the CBO can’t say that because it is nonpartisan. But you can look at it for yourself and see how the Democrats have loaded with 100-calorie Big Macs and miraculous exercise regimes.

So when you hear another Democrat, or Republian for that matter, talk about a CBO report — and it’s a mortal lock that you will — ask yourself if the CBO got fair and accurate data or if their were handed a pile of crazy assumptions designed to make the final score look far, far better than it actually is.

Other Posts of Interest:

• Who Will Control Your Life – You or Them?
• You Can Almost Hear the Criminals Lining Up to Get at Obamacare
• Aw, What Struggling Economy Needs $250 Million Anyhow…

Tags: Congressional Budget Office, National Health Care

Category: Political Pontifications, The Economy and Your Money