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Congressional Republicans are going to block the reappointment of Doug Elmendorf as head of the Congressional Budget Office, reports David Weigel — which means they're going to have to choose a new director for the agency. Why does that matter? Because the head of the CBO is one of the most powerful people in Washington. He, or she, controls the Number. And whoever controls the Number — and how it's calculated — controls far more about the laws that get passed than most Americans realize.
The work of government is the work of raising money and spending it. But the basic questions — how much money a given tax will raise and how much money a particular policy will cost — are unanswerable. Congress is trying to write laws that will work in the future, but Congress doesn't know the future.
Consider the difficulty of trying to price out what Obamacare will cost 10 years after the day of its passage. How many blockbuster drugs will be invented between now and then? Will there have been a pandemic flu? Will the car accidents in the United States rise, fall, or stay roughly the same? Will there be another financial crisis that throws millions out of work? Do you think you know the answer to these questions? If you say the answer is yes, you're either a liar or a fool.
Even so, Congress needs the Number. They need some estimate of the bill's cost so they can design the taxes and spending cuts meant to offset it. So Washington agrees to share an informed fiction: the Number may be wrong, but it's needed anyway. Which means someone credible needs to come up with it. That someone is the CBO. "In this town," as Henry Aaron, a senior fellow at the Brookings Institution, told me back in 2008, "it's not infrequent to hear people say it doesn't make any difference what it really costs. It only matters what CBO says it costs."
The result is that members of Congress write and rewrite their legislation to get the number they want. Obamacare, for instance, delayed its start until 2014 so its 10-year number would be less than $1 trillion. The rules the CBO chooses to abide by, the methods they choose to use, the assumptions they build into their models, the studies they use to inform their analyses — all this ends up, in ways most voters will never know, shaping the laws that govern their lives.
Members of Congress care because a bad Number can detonate legislation. In 1994, CBO decided that the insurance premiums Americans would pay under President Bill Clinton's health-care bill would be counted as a tax. That made ClintonCare's Number huge. A senior administration official complained to The Washington Post, "The Republicans will jump all over this and say we're increasing the budget by 25 percent and putting through the biggest tax increase in history." Donna Shalala, Clinton's secretary of Health and Human Services, was more succinct. She simply called the ruling "devastating." The Clinton administration — which included Alice Rivlin, the founding director of the CBO — disagreed with CBO's ruling. But there was nothing they could do about it. Live by the Number, die by the Number. (For more on the history of the CBO, see this 2008 piece I wrote for The American Prospect.)
Guesstimating the Number Is an impossible job, and the CBO does it as faithfully, impartially, and rigorously as anyone could. Their core asset is their reputation for independence and nonpartisanship, and they guard it carefully. At this point, both Republicans and Democrats have named CBO's directors, and Washington's policy world has, again and again, fretted that, this time, some hack would politicize the agency and destroy the Number. But it hasn't happened. The CBO has been good at protecting itself.
For that reason, I'm a bit less concerned than some that the Republicans are about to destroy the CBO. Elmendorf has been an exemplary director, and I agreed with the many, many voices — including some prominent Republican ones — that wanted to see him reconfirmed. But congressional Republicans know they need to replace Elmendorf with a credible economist or the Number their CBO produces will be useless to them. And there are some good candidates out there — notably Harvard health economist Katherine Baicker, whose name is already being floated. I would be surprised to see Republicans turn the CBO over to a total hack — though, of course, I've been surprised before.
The bigger danger to the CBO isn't in the appointment of the director but Congress dictating to CBO the rules it needs to use when producing the Number. That's where the GOP's desire to change how the CBO does tax math really matters, but that would be true even if Elmendorf kept the chair. If congressional Republicans begin telling CBO how to get the Number, then it's really congressional Republicans getting the Number — and the Number will cease to be something both parties in Washington share.
