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CBO’s record for accurate projections is not so great

March 13, 2017

The non-partisan Congressional Budget Office (CBO) just released its “scoring” of the Republican health care bill and the White House is taking pre-emptive action to downplay what are sure to be some troubling conclusions.

Trump administration officials are cautioning Americans not to accept the CBO’s conclusions at face value – especially when it comes to scoring large, complex pieces of legislation.

Washington Times:

Appearing on ABC’s “This Week,” Mick Mulvaney, director of the White House Office of Management and Budget, said the CBO has gotten it wrong in the past with regard to health care.

He disputed other analyses that have said the bill will reduce coverage and increase costs, and said that if the CBO research comes to the same conclusions, Americans shouldn’t necessarily believe it.

“If the CBO was right about Obamacare to begin with, there’d be 8 million more people on Obamacare today than there actually are,” Mr. Mulvaney said. “So I love the folks at the CBO, they work really hard, they do, but sometimes we ask them to do stuff they’re not capable of doing, and estimating the impact of a bill of this size probably isn’t the best use of their time.”

The CBO analysis of the health care bill, which already has been introduced in the House, is expected this week.

That the CBO got many things wrong on Obamacare is an understatement.  Nearly every major metric they scored turned out to be grossly underestimated or overestimated.  They tended to downplay costs while boosting projected enrollment numbers.

Weekly Standard:

Seven years ago this month, the Democrats rammed President Obama’s namesake through the House of Representatives without a single Republican vote and with only three Democratic votes to spare. At the time, the CBO said that in 2017, 23 million people would be enrolled in insurance that they acquired through Obamacare’s government-run exchanges. Well, 2017 is here, and the actual tally is 9.2 million. So the CBO missed its projection by some 14 million people and a whopping 48 percent. That’s not even close enough for government work.

The CBO tends to assume that if the federal government isn’t compelling someone to do something, it won’t happen. So if employers aren’t mandated to offer insurance, they won’t. If Americans aren’t mandated to buy insurance, they won’t. To be sure, the CBO does grant that some private employers and some private citizens actually exercise free will. Nevertheless, the CBO plainly believes in, and is a part of, Big Government.

Evidence of this is found in the fact that the CBO generally omits a huge category in its Obamacare scoring: its effect on federal spending. It lists Obamacare’s “gross cost of coverage provisions,” but that counts tax breaks and federal spending as being one and the same. Maybe that’s just as well, since the CBO falsely scores Obamacare’s direct outlays to insurance companies as “tax credits,” and hence (when the person getting the insurance is someone who actually pays income tax) as “tax cuts”—hiding some $104 billion in federal spending in the process. The fact that the CBO generally doesn’t offer a clear tally for federal spending speaks volumes.

As congressional members and staffers from both parties wait with bated breath for the CBO to score the newly released House Republican health-care bill (part of which is here and part of which is here), they would do well to remind themselves that (A) the CBO’s score will most likely be wildly off, (B) most Americans don’t much care what the CBO thinks, and (C) those who debate and pass legislation should focus on whether it would be good policy that can be communicated to the American people on its own grounds, not on the grounds of the CBO’s generally dubious scoring.

The CBO’s estimate of how many people will “lose” their insurance under the GOP plan will be a good example of the agency’s inability to peer into the future with any kind of accuracy.  No doubt, the number the CBO comes up with will be in the millions.  But that guesstimate will be based on the notion that just because someone loses a subsidy, he will go without insurance.  It also doesn’t take into account what kind of plans insurance companies will be able to offer without the Obamacare straitjacket.  It’s impossible to predict outcomes based on incomplete or faulty guesswork.

The CBO stopped giving year-to-year estimates of the cost of Obamacare because the Obama administration continued to move the goalposts and change the law unilaterally without congressional approval.  They finally gave up in 2014.

Given the CBO’s horrendous track record in accurately scoring the Affordable Care Act, any numbers coming from the agency will be viable only as political talking points, not reality.

http://bit.ly/2lUtByN

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