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CBO Director Pledges Transparency in Dynamic Scoring

By Paul M. Krawzak, CQ Roll Call

May 19, 2015 -- Keith Hall, the new Congressional Budget Office (CBO) director, acknowledged the challenge of dynamic scoring during his first appearance before a congressional committee since being named to lead the legislative office that estimates the budget impact of federal legislation.

He also told the Senate Budget Committee he is working to improve the agency’s models for analyzing the health care law and health care legislation.

Hall appeared during what Senate Budget Chairman Michael B. Enzi, R-Wyo., said was the first oversight hearing of the agency held by the committee since 1982.

Hall, appointed by GOP congressional leaders to succeed Douglas W. Elmendorf, was challenged by Democrats to maintain the agency’s nonpartisan reputation.

Hall said he would. “The goal of CBO and my goal is to maintain what I think is an excellent reputation of CBO for doing independent, objective work and we will continue to do that,” said Hall, who is a Republican.

Unlike past CBO directors, Hall must contend with a new congressional dynamic scoring rule. The fiscal 2016 budget resolution adopted by the Congress (S Con Res 11) requires the CBO and Joint Committee on Taxation to produce a macroeconomic score of major tax and spending legislation that will serve as the official cost estimate in the House and a supplementary score in the Senate.

Sheldon Whitehouse, D-R.I., questioned Hall’s commitment to implementing macroeconomic analysis in an objective way. “My concern is that in setting the ground rules for the application of dynamic scoring, you might be inclined to set it up in such a way that it favors things that the majority party likes, like big tax cuts for wealthy people, and produce dynamic scoring results that show that that’s such a wonderful thing and not things that they don’t like so much, like the Clean Air Act,” Whitehouse said.

Hall said one of his goals is to promote more transparency at the CBO, in dynamic scoring and in other areas, which he said will invite feedback from outside the agency.

“CBO’s already been using dynamic scoring,” he said, referring to its use in the past to provide usually supplementary cost estimates. “You can sort of see how it’s been implemented. But that’s a big part to me of transparency, is making clear how we’re going to do the dynamic scoring, what models we’re going to use, what estimates we’re going to use.”

Hall added that he plans to vet the agency’s dynamic scoring methodology with the experts who sit on CBO’s Panel of Economic Advisers at its next meeting. “We’re going to talk in some length about our dynamic methodology and get some feedback from those folks,” he said. “The goal is to do this in a way that represents a state of economic science. We’re trying to look for consensus as much as possible in what we do.”

Hall told Georgia Republican David Perdue that while it’s difficult to produce macroeconomic estimates, and while they are uncertain, “there actually is a pretty good consensus on some of these issues that there is some macroeconomic effect, there is some growth effects going forward.”

Improving Models

He said the agency is working to improve the models it uses to assess both macroeconomic effects and health care legislation. “We continue to analyze proposals to modify the Affordable Care Act and the forthcoming Supreme Court decision regarding that act,” he said, referring to the King v. Burwell case before the Supreme Court that challenges insurance subsidies in the law.

Republican lawmakers have been crafting and seeking CBO’s input on various proposals that could temporarily replace federal health insurance subsidies and make other GOP-favored changes in the health care system if the court rules that subsidies cannot be offered on a federal exchange.

Hall said that now that the health care overhaul has been in effect for several years, CBO analysts can draw on experience with the law to analyze its effects.

“Some of the early modeling of the ACA, like I say, was based on theory,” he said, referring to the Affordable Care Act. “And as we’re starting to get some experience, the results are going to change a little bit based on experience.”

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