Why did Obama meet with the CBO?
posted at 3:30 pm on July 21, 2009 by Ed Morrissey
Barack Obama disclosed an unusual meeting with the CBO, presumably its director Doug Elmendorf, in his Today Show appearance this morning with Meredith Viera. The relevant clip comes at the three-minute mark, where Viera challenges Obama on the CBO scoring of the health-care reform bills:
OBAMA: And so, what we’ve got to do, is to bend the cost curve over the long term. And we’ve put forward a whole series of proposals to do that, and the Congressional Budget Office and every health care expert have looked at many of our proposals, and they’ve said, “You know, this has a good chance of working.” Not all of them have been adopted by Congress yet —
VIERA: But — not to beat a dead horse here, but again, the Congressional Budget Office is looking at those bills that are out there, and they’re saying they do not contain costs. Any one of those bills, would you sign them, based on what you see?
OBAMA: Right now, they’re not where they need to be. But I promise you, I just met with the Congressional Budget Office today, so I know exactly what they’re saying. And what they’re saying is, is that the cost savings that are in those bills right now, some of them may actually work, but they’re not enough to offset the additional costs of bringing in 46 million new people to provide.
Why is this important? The CBO exists to keep a check on the executive branch. The “Congressional” part of CBO is no accident. Congress created the CBO as a means to provide oversight over the White House and its use of the budget and its fiscal projections:
Two developments provided the impetus for the enactment of the Budget Act in 1974. One development was an increasing realization by Congress that it had no means to develop an overall budget plan. Prior to 1974, Congress responded to the President’s budget (which contains the President’s many spending and revenue proposals) each year in a piece-meal fashion. There existed no framework for Congress to establish its own spending priorities before work began on specific spending and revenue bills during the spring and summer.
A second, and more immediate, cause for passage of the Budget Act was a dispute in the early 1970’s regarding presidential authority to impound money appropriated by Congress. During this time, President Nixon repeatedly asserted authority (as had many of his predecessors) to withhold from Federal agencies money appropriated by Congress. By 1973, it was believed that President Nixon had impounded up to $15 billion of spending previously approved by Congress. A large portion of these funds were to have gone towards the building of highways and pollution control projects. Many in Congress disputed these actions by the President.The authorization for the pollution control projects, for example, had been enacted by Congress in 1972 with a strong vote in both Houses overriding President Nixon’s veto. Nonetheless, the President impounded much of this spending. These events led Members of Congress to seek a legislative solution.
In 1974 Congress enacted the Congressional Budget and Impoundment Control Act to establish procedures for developing an annual congressional budget plan and achieving a system of impoundment control. The Budget Act also created, for the first time, congressional standing committees devoted solely to the budget. It also created the Congressional Budget Office (CBO) to serve as the “scorekeeper” for Congress. CBO is responsible for producing an annual economic forecast, formulating the baseline, reviewing the President’s annual budget submission, scoring all spending legislation reported from committee and passed by the Congress, and preparing reports in compliance with the Unfunded Mandates Reform Act. CBO’s policy with respect to providing estimates is set out in Appendix B. The Joint Committee on Taxation scores all revenue measures.
In other words, the CBO exists for independence from the executive branch in fiscal matters. If Barack Obama needs clarification on CBO scoring, he should work through Congress to get it, rather than demand face time with the CBO director. Even more appropriately, the President should work through his own Office of Management and Budget (OMB) director for analysis of CBO scoring. In this case, Obama has Elmendorf’s immediate predecessor, Peter Orszag, as his OMB Director, who should be able to figure out a CBO analysis on his own and help Obama understand it and respond to it.
After this came to my attention, I contacted two sources in Washington and asked if presidents routinely conferred with the CBO on budget scoring. Both called this highly unusual and could not recall if or when it had been done in previous administrations. It treads on the entire process of legislative oversight and threatens the independence of the CBO from the administration, which is essential for Congress — if it’s interested in independent analysis.
At best, this looks like a move made out of ignorance of the constitutional checks and balances of the federal government. It appears more like an attempt to browbeat the CBO into more sympathetic scoring of presidential initiatives. Congress should act quickly and forcefully to remind Obama about the boundaries of his executive power.
Update: Elmendorf blogs about this meeting:
I was invited to the White House to meet with the President, his key budget and health advisers, and some outside experts. The President asked me and the outside experts for our views about achieving cost savings in health reform. I presented CBO’s assessment of the challenges of reducing federal health outlays and improving the long-term budget outlook while simultaneously expanding health insurance coverage–just as we had explained these challenges in a letter to Senator Conrad and Senator Gregg last month. I also described CBO’s view of the effects of the health legislation we have seen so far, as I did last Thursday in a hearing at the Senate Budget Committee and a mark-up at the House Ways and Means Committee. In addition, I discussed various policy options that could produce budgetary savings in the long run, drawing on CBO’s Budget Options for Health Care released in December, our letter to Senators Conrad and Gregg last month, and my comments last Thursday. Other participants in the meeting expressed their own views on these various topics.
But the CBO doesn’t create policy. It’s supposed to be a scorekeeper, and allow Congress to create policy. This feels like an attempt to either intimidate or co-opt the CBO, neither of which would be a good thing. The entire meeting seems highly inappropriate.
Update II: This seems mighty familiar to Brian Faughnan, who recalls Senator Max Baucus demanding that the CBO stop playing independent arbiter and start throwing the numbers to support a government takeover of the health-care industry.