I have received pushback from a couple of sources on a post I wrote a few weeks ago, titled “CBO gives us the complete picture five months late.” In that post I said CBO failed to provide lawmakers with clear information about the gross spending and revenue effects of the health care laws as they were being debated, instead providing information only on the net deficit effect. I also ascribed ill intent, saying that CBO “buried” this information.
When writing that post, I had missed table 2 in this March 20th letter from CBO to Speaker Pelosi. That letter clearly separates spending from revenues, and easily allows the reader to distinguish both the gross and net effects of the bill. A commenter was helpful to point out that I had missed it.
Other presentations of the legislation still concern me, and I remain frustrated that the core presentations combine spending increases and tax cuts into “deficit effects.” I understand the arguments for this presentation, and in some contexts it makes sense. I accept the argument (made to me more than once) that the formats provided were those being requested by Members and staff on both sides of the Hill.
My underlying substantive point remains: I am concerned that Members, staff, and outsiders in both parties focus solely on deficit effects, to the exclusion of thinking first about the gross spending and revenue effects of legislation. We should care about the size of government (as measured by spending), and also about how we finance any given level of government (the balance between taxes and deficits). When we focus only on the deficit effect of legislation, we blur these two separable questions and confuse the discussion.
This is a problem throughout Washington, and, to their credit, the covers of CBO’s annual budget reports show a graph with separate spending and revenue lines. I will continue to argue for analysis and prominent presentation of the effects of legislation on both the size of government and the budget deficits that flow from financing it.
At the same time, my post of August 25th was incorrect. I was sloppy in missing table 2 in the March 20th letter. Also, I now think I went too far in ascribing (guessing, really) the intent behind the result. I guessed that CBO was probably pressured by Congress, and probably concealed information as a result of that pressure. I should not have inferred that without stronger backup.
It’s important that I admit when I was wrong, especially when I labeled CBO as having “failed” and ascribed ill intent. I’m falling way back to, “They made a judgment call that I wish they had made differently.”
I retract the “CBO failure” argument which was in fact incorrect, regret going so far as to ascribe ill intent when I couldn’t prove it, and feel stupid for having missed table 2 in the March 20th letter to the Speaker.
I’ll bonk CBO hard when they screw up, as I have done to OMB on occasion. This time, they didn’t. I did.
My bad.
(photo credit: Josh Gurian)
Kudos to you for admitting the error. In my book you've gained more credibility than you've lost on this one. I hope that your example of admitting mistake catches on. Now, say three Our Fathers and two Hail Mary's and don't let it happen again.
Great post, both for its thoughtful content as usual and because of how you admitted your previous mistake.
Keith,
Interesting post to find on my first visit to your site. Very gracious & I'm impressed.
Yes on both major issues here: a) admitting you're wrong when wrong. (Has de Long or Krugman done that? Likely with some major blame shifting to avoid "manning up" to it.)
b) continued push to separate tax cut effects and spending effects.
In fact, future research will likely show that most tax cut deficits DO have a small, positive, return on investment (in terms of increasing GDP over time), but the majority of spending effects are negative. ($100 spent gives less than $100 long term benefits).
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