Network News

X My Profile
View More Activity

CBO: Don't trust the CBO

It comes right there on the second page of CBO director Doug Elmendorf's presentation on the the long-term fiscal threat. The slide is titled "three reasons that the fiscal challenge is especially acute," and the first is that "current policy as perceived by many people would generate much larger deficits than current law as captured in CBO’s baseline."

In other words, CBO estimates don't tell the full story.

The difference between current law and current policy is the difference between what the government has said it's going to do and what it's actually likely to do. Take the Bush tax cuts. The law says they're going to expire next year. But most everyone believes that the Obama administration will extend the cuts for middle-class families. Similarly, the alternative minimum tax is supposed to hit tens of millions of new families next year. But everyone expects Congress to prevent that from happening.

CBO, however, can only use current law in its official estimates. So its estimates are too low. CBO knows this, and Elmendorf, in stronger language than is customary, is trying to tell people. He follows his warning with a graph showing the difference between current law and expected policy:

baseline.png

As you can see, revenues drop and spending jumps, making CBO's already grim estimates look a lot worse.

By Ezra Klein  |  November 13, 2009; 11:25 AM ET
Categories:  Budget  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: I will suck your gruyere
Next: Medicare and Medicaid account for 80% of the entitlement problem

Comments

its actually not "Don't trust the CBO", its "Don't trust congress" to make the tough necessary decisions. Those decisions would be easier made by senators and congressmen (and women) who were term limited. That law they're proposing really needs to pass. Once we see Robert Byrd at 94 or 95 wheeled in on a hospital bed to cast a vote for healthcare that should prompt congress to act.

I commend you Ezra for finally speaking up a bit on the defecit and Congress' inability in its current structure to take care of it.

Posted by: visionbrkr | November 13, 2009 11:35 AM | Report abuse

its actually not "Don't trust the CBO", its "Don't trust congress"

100% agreed.

Posted by: wisewon | November 13, 2009 11:40 AM | Report abuse

i could applaud elmendorf for speaking out on what he perceives to be a problem needing attention

or i could criticize elmendorf for stepping outside the boundaries of his job - he is there to provide non-partisan information to congress, he is to support legislators in their debate

i think elmendorf is taking a legislators role here, he is advocating policy

he cannot fulfill his non-partisan role if he is a partisan


Posted by: jamesoneill | November 13, 2009 11:58 AM | Report abuse

i love the liberal argument. "what he perceives to be a problem". If the President agrees its a problem, if a majority of the senate PERCEIVES it to be a problem then you know what MAYBE IT IS A PROBLEM.

When our interest on our debt is in the hundreds of billions of dollars per year not long from now and your precious little entitlement programs go bye-bye then it will be YOUR problem. When you see now state employees being furloughed its the beginning of the problem. When there's no stimulus to save them a year from now it'll be a BIGGER problem.

But ya keep thinking there's not a problem. I'm sure you'd continue that same argument if we were to say be talking about global warming, right?

Posted by: visionbrkr | November 13, 2009 12:43 PM | Report abuse

visionbrkr wrote: "When our interest on our debt is in the hundreds of billions of dollars per year not long from now and your precious little entitlement programs go bye-bye then it will be YOUR problem."

What do you mean "not long from now"? In 2009 the interest payment on the national debt was almost $400 billion. Which is a decline from its all-time, non-inflation adjusted high, of $451 billion in 2008.
http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

Posted by: steveh46 | November 13, 2009 1:15 PM | Report abuse

The people of the United States had a choice between a Presidential candidate who promised to freeze spending for non-military matters, and a Presidential candidate who said he'd take a more flexible approach. The latter won.

So let's not pretend there is any public clamor to cut the deficit. It's very low on the list of priorities, except for those people who lost the election. (And they have no credibility since they spent the previous 8 years creating the current deficit.)

Posted by: rick_desper | November 13, 2009 2:39 PM | Report abuse

The comments to this entry are closed.

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company