of the landmark cases companion book. available for 895 plus shipping and handling at c-span.org/landmarkcases. explore the interactive constitution created by the national constitution center. there is a link on our website. now, another panel from the house budget committee hearing on the role of the congressional budget office and the legislative process. we hear from maya maginnis, president of committee for responsible budget, sandy davis, former legislative affairs director of the cbo. this portion is about an hour. [inaudible conversations]

>> once again, ladies and gentlemen, the house budget committee hearing is back in session. and we welcome our second panel and on this panel we have maya macguineas, president of the committee for responsible federal budget. sandy davis, senior advisor at policy center. the committee received your written statements. you each will have five minutes to deliver our oral remarks. miss maginnis, we'll give the floor to you, you have five minutes, the time is yours. you.ank for having me, thank you for sticking around because that was a panel that cover ad whole lot of really good details. i'm afraid i won't have much to add that contributes more than they were able to. though i do have interesting interesting perspective of being cbo sets out. thank you for holding these

hearings. i think that they have turned out to be very value add. we have gotten, we learned a lot from them. i also thanks inviting me to come before the budget committee which is my favorite committee and talk about cbo which think is valuable. both because of being independent body producing impartiall members and because f the quality of its work. so having a independent, non-political referee producing impartialdu numbers is certainly invaluable, allows us to know cost oft policies, adjust them appropriately and figure out pay-fors. as alice rivlin talked about provides quantitative analysis that lawmakers can use as they see fit. if we were living in an ideal polly making world the way things would work we as a country would decide what our main budgetary objectives are, we figure out which of them should be done in the public sector and or at the federal

level. we think about the different policies thatt could achieve those objectives and we would haveve a honest debate about the pros andnd cons of the policies. we would have those policies scored.d we figure out how we could pay for them and hopefully pass policies that didn't add to the deteriorating fiscal situation we have now. if you look at the breakdown how we shouldes be making policy i think we should point out i don't think the role where cbo plays is where we should be focusing but getting the numbers around cost of policies and pay-fors is everything else considered, working pretty well. i also think during this time of a real fiscal, not going to say crisis a really dangerous fiscal situation, having fiscal estimates is critically important. right now our debt relative to the economy is twice the

historical average. it's twice where we were when we went into the recession of 2008 which means if and when the economy turns down next, we will have very little fiscal flexibility to respond. probably worse than where we are right now is where we're headed. we're on track to add as much as $14 trillion to the debt over the next 10 years. these numbers stopped having meaning because they're so huge but they're really unimaginable that we're doing that to ourselves. recent legislation we made the situationha considerably worse. our debt is on track to be the size of our entire economy a decade from now. so having an agency that scores legislation releasing generatess and options and their savings to address the situation is really critical particularly at a moment like this. so certainly there are ways cbo could and should be improved. one of the main criticisms, clearly we talked about this a lot on the last panel, is there a need for more transparency? other criticisms questioning the accuracy of the estimates and

how cbo prioritizes its works. more transparency is certainly desirable. directorac hall has made steps o improve the transparency. there is a lot of discussion if and how there could be more that is done there. i think it is worth considering tensions and tradeoffs when it comes to things like proprietary data and information so we want to be careful around there. listen to the panel that just passed and other hearings i feel confident people are taking issues into consideration. bottom line more transparency is always desirable when the tradeoffs are not too high. there are additional measures cbo could take. i think doing more briefings with members and their staff about theirar methodologies on things like scoring and baselines could certainly be useful. anybody interested in learning more can talk about how those things are done. it feels like a black box but it doesn't have to, a lot of what cbo does they make incredibly accessible. we have to findou a way to link that to staff and learn more.

the way to evaluate its track record is certainly useful. they'renk on track considering doing more of that and doing more. re i think is interestingar providing more analysis for members who are not in leadership or on the committees of jurisdiction. they want to develop legislation. they want to iterate with cbo, get scores, figure out how things work and they are a lot of times frustrated because they don't have access or abilities to do that the only way that is possible, further resource cbo, given, them more money. would i be who arely remiss if i didn't point out that would have to be paid for, shouldn't have to add to the debt. cbo pay-go would be good. i figure out how much money we spend on politics and how much we spend on policy making and cbo can be a real part of the policy-making area, allows more members, not in leadership, non-committees, be engaged in the process. i think that is real priority.

real quickly we use cbo materials information, scores, methodologies when we do outside work. for instance ourem organization scores theit presidential proposals during the elections. cbo wouldn't be able to do that because they're not, they don't have enough information, they're not full-fledged proposals but outside groups can and we and many other groups that do that rely on cbo's work because it is impartial and also important for us not to be politicized in the works that we do. as consumer we couldn't do our jobs if we didn't have the work ofwo cbo to rely on. every institution can be improved. i think it is important you're holding these hearings. i think they have gone really well. so i think we launch into assessing the tradeoffs but at the same time we don't lose the point of really importance of having an impartial arbiter and we don't lose the focus on things we need to think about right now, which is how to pass a budget this year and how to deal with the really dangerous national debt situation that we have. thank you so much for having me here today. >> thank you, miss

macguineas. to point out you did consume more time than you were allocated with no offset. [laughter] >> i will apply pay-go to my answers toe my questions. >> just kidding. >> fair point. >> appreciate your testimony. mr. davis. ainsley: thank you, mr. chairman. i will make clear i will not give any offsets. i think i'm off budget. i'm not sure. but let me, let me thank the chairman,ke ranking member yarmuth, all they members of te committee. i really am honored by the opportunity to come here to testify today. feels a little like a homecoming for me as you all heard. i spent many years working at cbo most closely with a lot of staff i see behind the dais. feels good to see friendly faces back there. it is a good experience to be here. i appreciate it very much. i find myself now being the fourth witnessgo on the fifth hearing. basically as you're wrapping these hearings up at least for now, i concur with everything my

predecessors on these panels said. i will see if i can give it a slightly different twist. i also, just based on my experience, princely at cbo and as senior advisor to bpc, bipartisan policy center, viewing how other agencies and organizations lookas at cbo's work. i will add my congratulations to you on these hearings. i think these have been done a very methodical, educational way and provided a real service. regular oversight hearses are good thing. maybe you don't need five every year. but oversate hearings are a good thing and this was necessary to get off to a good start. as i said over the years i had the advantage working inside and outside of cbo i have four observations i want to share with you. i will be happy to answer any questions. i want to make clear along with everyone else, i believe a vibrant, robust, independent cbo is absolutely essential to

congress in performance of its article i duties. at by partisan policy center we view cbo as the gold standard of fiscal and policy analysis. we don't have the view that cbo's analysis is always right or agree with them but their longstanding objectivity. bpc stood strongly against the legislation, proposals considered last summer to make drasticul cuts in cbo and modify and eliminate the budget analysis decision. those are the wrong approaches to deal with issues and concerns members have. some advocated use of outside organizations to substitute for cbo. meldingd estimates of policy he can expectations with relevant expertise. this approach is unworkable and i think would actually greatly diminish the both quality and quantity of objective analysis that members get. non-partisan analysis is not simply the product of splitting the difference between partisan positions.

secondly, effective communications has beenes alludd to today between cbo an congress is one of the agency's biggest challenges. it is madeha more difficult by changes in the budget process over the years which caused huge increase in the demand for cbo estimates as you all know cbo is directed under budget act to give priority under budget committees, house and senate budget committees. because of that they're not able to respond to all asks for information especially from rank-and-file members. the frustration this causes is certainly understandable and cbo acknowledges the problem. i acknowledged it when i was there. it was something we struggled with all the time. even with the problem of excess demand for cbo estimates i think you should never feel as though you can never get your questions answereded or have, or have a sense what the information they're giving you is somehow incomplete. there is always multiple avenues at cbo to get your questions

answered or extra information. you may not like the answer you get but you should get your questions responded to. the third, the issue of transparency is a big one. cbo analyses and transparency of its analyses is more critical than ever i would say. cbo already devotes considerabe time to this as you all know but they acknowledge they could do a much better job. the difficulty they are stretched to thin. this is really as others have said. thisis is resource question. i think a better approach rather than posting models on the website or something like that is actually provide cbo with additional resources and dedicated explicitly transparency. have cbo report to you annually, what efforts are made on transparency. fourth and finally i would like to sort of pat the budget committee on the back and give a little push because the i think the budget committee plays a key

role in having cbo address member concerns and being more effectivey organization. working with cbo to address those concerns is more productive than putting in place well-meaning statutory requirements, to post models sore to cost out contract estimates. in my view as i finish up, i think the real issue hampering cbo's effectiveness and responsiveness is something the committee is all too aware of, the broad issues and dysfunction of the budget process. at bpc we have high hopes for the joint select committee on budget reform which is just starting its work. we have lots of thoughts on budget process idea including biannual budgeting and ways we think would make real improvements which we would be happy to share with you. in conclusion i would like to say, for you all to remember one thing,pr that the cbo works for you. the people at the agency are dedicated to its mission, fully

dedicated to its mission. work with them, ask for explanations, be persistent. take a visit to the ford building, fourth floor, show up. i know they're cringing down there as i say this this should be open institution to get your questions answered of the if you can't get it over the phone, go down there pay them a visit. i will work with the cbo to solve thesehe missions of conce, cbo critical mission and budgetary duties depend on it. thank you very much, mr. chairman. >> i think both panelists i will lead with a couple questions hered and i will yield to the ranking member and my fellow colleagues on the right for their questions. its has been pretty universal in bothgh panels that there is a nd for cbo with the ability to maintain oversight and then, mr. davis, in your comments, you talked about if we don't resource them properly, if

indeed we were to cut cbo, that it would create at a minimum some stress on the organization to be able to achieve its congressional mission. but speak to that a little bit more. if we dent resource them adequately, it suggests that the information we're going to get from them is going to be less than the product we perhaps want to see, is that an accurate assessment? >> i think the remarkable thing to me is that cbo has been able to do the level, amount and quality of work that it's done over the years despite, especially in recent years, having insufficient resources to handle it. you have to remember cbo is essentially the same size it's been for many years and, while the workload has vastly increased, i think that the

quality of the work will not be affected, is not affected. i think that their ability to explain, to make clear the basis for the analysis, for the estimate is the thing that is going to suffer. it may have suffered in recent years because if as dr. rivlin said, if you're getting pressed for an estimate by wednesday morning and it is tuesday not, you will not have a lot of time to write up and explain the estimate. in my view resources would help them devote time to that effort at transparency is really the key. >> miss macguineas as you know we had a hearing on the behavior modeling and i kind of likened it to baseball season was getting underway at the time of the hearing. was talking about, you know, batters, hitters, that face a multitude of different pitches. if everything was a fastball they would probably be able to time it, hit it, with a lot of

accuracy and out of the ballpark a lot of the times but we know thatve pitchers mix up their pitches now and they throw a lot of things that move in different directions. life comes at us that way. certainly cbo faces a lot of changeups and curveballs and every once in a while a spitter comes their c way or they throw those at the hitters. how difficult is it for us to actually model to the extent where we can be confident in the product? >> my office is cringing right now because i'm not known for doing really well with sports analogies. nonetheless i have gotten to where we are, particularly can be with health care, cbo is dealing with huge, new issues at very quick pace. i thought doug holtz-eakin gave a example, trying to score risk

terrorism reinsurance. one thing you can be confident and projections and answers aren't going to be perfect. they couldn't be. what we're striving for to understand and believe, they wl be incredibly biased in one direction and open to on going inputs, so those models are regularly updated, we're learning when there are things that don't come out as projected, we're taking those results and updating models and behavioral assumptions, so i think that you trust and you're confident there is no bias in what you're getting out of the best they can do, and regularly learning and nobody can do perfect spot-on projections for any of these new big areas we're moving into. i would add, members of congress on the big issues are wanting answers more and more quickly which goes to resource question sandy discussed, the more people working on it the faster the turn around can be.

>> your organization, the bpc aree able to see how complicated matters are when there are substantive changes in theho economy and health care and the lifespan, the average lifespan is getting longer and longer and all the technological changes and a lot of things. both of you i'm sure, would agreee that, that there is no real definitive answer. it is not as simple as a math question for a lot of things. we have got behavior involved here and we have a lot of external conditions that have to be considered. and so the modeling piece of cbo isis an ever-changing thing, right? >> i will just, yes, sir, i think that you have hit the nail right on the head. models require additional work to be updated. like i'm the last person you want to be talking about models. i appreciate it --

>> i will talk about models, you talk about sports. >> talking about sports. the pitches worry about at cbo are at their heads, up and in. that is all i say. i'm being facetious. but iar do think you're correct, it requires a lot of tending and effort and analysis itself. so that is where i talk about the need for resources to do that. it is hard to do that sort of concurrentlyys pushing to get te estimate and analysis out the door but it is necessary. it is important. part of that is writing that up in a clear way that members can understand and appreciate and part of it is just having the tile to do it, and resources quite frankly to do it. >> mr. yarmuth, myself, mr. woodall are all on the celebrity committee for budget process reform. can both of you in just a minute or so, because i'm going to run out of time, can both of you give us a foretaste of what your initial suggestion wouldn be or your strongte guidance would beo

the select committee? you have got y three of them he. >> sir, i'm so pleased this joint select committee is occurring. will makel it progress. kind of like when we started tax reform, you look at the tax code, one thing we agree on it is broken and we need to fix it. we all feel with the budget process there are improvements we can make. starting from smaller to larger, they're not incremental, small changes in the existing process should be made, insuring a budget is in place. i concurred congressman mcclintock was saying until there is budget in place you should not pass legislation that costs money. i like those ideas. i think auto crs are something to think about. thee i think joint budget resolution where the president and congress agree in the beginning so you have a real law is important to be taken more seriously. the budget doesn't have the teeth it needs to. it is kind of absurd we have budgets in place, if we have budgets in place i should say,

subsequent policies are often completely at odds with the budget. regularly members don't even realize they're inconsistent. second i think doing more to avoid gimmicks that exist in the budget so everything from timing gimmicks to using roth iras and pension smoothing which are massive gimmicks to look like you're paying things when you're not. going through the gimmicks we produced a big report on gimmicks, figuring out how to address those. focusing on strengthening enforcement. we had a moment where pretty much everybody was onboard to waive pay-go for the tax bill. few people realized that allowed a massive change to the budget. tax bill added to the debt. getting rid of pay-go allowed that to happen. pay-go needs a stronger mechanism to have mechanism and effects in the long term and savings occur in the long term give you credit today so you have a political incentive to generate long-term savings. likely i would like to see a big

he overhaul that helps improve very poor fiscal outcomes and considering something like debt targets to gette you there along the year for a multiyear, budget. that is from smaller or more manageable to bigger. it is not easy to get anything done.ye i encourage figure out as much as you can push for and get that done. we need a win. we need congress to work together, succeed on something that moves us in the right direction. >> mr. davis? >> yes,wi sir. maya laid out really good ideas and proposals. i think her point about, needing a win is important. so i would say not try to bite off too much more than you can chew. you have a relatively quick turnaround. the focus as i mentioned earlier making the trains run on time could bech the biggest thing you could doqu to advance the budget process. at the bipartisan policy center we have series of ideas. dr. rivlin mentioned her work with senator domenici on a

series of budget process proposals which was done through the bipartisan policy center. he was a senior fellow there. couple key ideas from that i would encourage the committee to think about, the first is biannual budgeting. that is mentioned here today as a way to ease pressure on the budgetary agenda on congress and free up for time for actual congressional oh sight in second session of congress. another idea we would stress i mentioned in myon testimony ways to strengthen the budget committee. to makesi it a leadership committee in a sense that would create more of a sense of always be better to the process. process can be made to work, but it needs more support from leadership levels and needs to be made a priority. and i think, you know, lastly i will mention something like automatic continuing resolution is worthying about. there are obviously issues that you have to deal with, about creating incentives not to get

the work done, living under constant crs. there are ways to deal with that. take away uncertainty, the possibilities of a government shut down. >> thanks to both of you. mr. yarmuth. >> thank you, mr. chairman. thank both of the witnesses also. i have this knack of asking questions i don't expect a certain answer to. it is curious, something might be useful is if we asked cbo to as a matter of course do a score on an enacted piece of legislation every two years or so. that above some level, $5 billion, hypothetically, some level, with the aca we would have a score every two years

what it would like for the next 10. we obviously don't want to add too much to cbo's plate but since they have done a lot of the incremental work may not require that many additionalwo resources. ii threw that out, mr. davis. how do you react to that? >> you are talking about reas assessment of something enacted into law, to keep track of what it said, how far off the spending it was, that can be a tricky thing to do and almost impossible. depends on changes you enacted. if you make changes to existing program and the changes get all wrapped up what exists under current law it may be difficult to parse out those changes versus what occurs under current law. if you create a new program, for example, like congress did on medicare part-d, prescription drug benefit, that is something that can be tracked and cbo kept

track of their estimates versus how it actuallyat turned out. as folks are aware, their estimates were too high initially. the cost of prescriptionw drug benefit wasn't as originally estimated. i think that is in part what a baseline is. you take stock, every few months where current law spending is now, parsing by individual programs like that is more of a challenge. i think for new programs that have been enacted it is a fair question to ask, we did this, our expectation at the f time, how has it turned out ia fair yes. >> i don't have anything else i want to ask, give you both an opportunity since i have all this time left to talk about anything you have heard today so far that you were just chomping at the bit, horse racing term, to react to while sitting and watching and listening. >> i will react to something. i will try to do this the right way, i thought alice and doug

both did fabulous jobs pointing out the tensions and i took, i heard alice talk a lot about what are the real big priorities we should be focusing on. i thought doug did incredible job showing tensions and changes in pros and cons and not portraying things in black and white. i one of the things i heard frustration with our situation pushed back on cbo and i will slightly push back, that the fiscal situation and broken budget process comes from congress, it doesn't come from theed congressional budget offi. what we need to do is hep-c bo out the kinds of things that will enable congress do, many people want to do, hut us on a fiscally soundtrack and functions better. because of the political environment thaw existt that is really difficult. you don't want to politicize cbo, i spend some of my weekends, some of you have been

soccer parents, i spend weekends on soccer side lines yelling at refs, and it unbelievable the ref is always against our team but never against the other team, right? you want to say probably evens out when the ref makes a mistake orth not. i think cbo does do that we have to focus on what is making it impossible to get the right fiscal outcomes we want. i would keep turning a picture back to what the big fiscal situation is, how we will budget in a way that reflects and pushes for our national priorities and thinks about the tradeoffs to get there. that was my big picture. then i sit there think about the national debt pretty much no what is going on. thattu is where i am. the reason i ended up in this field i had a normal job on wall street working on finance i read a cbo report in the '90s. it was one of the most interesting things. it was unbiased, it was fair and talked about deficits of

$203 billion. i think i was really concerned. i think that was the number. things have really deteriorated since then. the question is what will we do to change isn't mr. chairman, question about the joint select committee, oneat thing i didn't mention that i think is really important, putting caps on full budget, not just thinking about sequester and mandatory, and tax expenditures are spending through the tax code. there is a trillion of them a year. figuring out those pieces in the budget and figuring out how to cap them. >> anything? >> briefly, there will be conflict with cbo. this is non-partisan institution. congress isgu a partisan institution. they get it. days from alice, analysis of carter energy plan from democratically-controlled congress. it wasn't too popular at that point t has been that way throughout cbo's history. i wouldn't worry about taking issue with cbo. they actually want to hear from you.

if it isss done in a right way o try to improve things, that is not a problem at all. they want the communication. >> thank you both for your testimony. i yield back. >>ov i thank the ranking member, miss macguineas, somebody said you're not good at sport metaphors, you gave as you good one on the soccer field. mr. woodall, from georgia, the floor is yours. >> thank you, mr. chairman. you said to encourage down at the ford building, remember cbo works for you. >> right. >> in both of your written testimonies you talked about the importance of an independent cbo. in my mind those two things are cat gore call opposites. --t categorical. either you work for me you do what i tell you to do or you get to do whatever you want to do, you're independent. hello me understand having your insideev view that distinction between working for us and yet only staff director on all of capitol hill who will come sit

at the witness table and tell the committee for which they work how it is. >> so let me say i understand what you'ree saying and i understand the frustration with thate and the distinction you made between omb and cbo with dr. rivlin. i think, i think what it boils down to what you mean by advice. the folks at cbo will sit down and talk with you about anything you want to talk about. you can run your ideas past them. they can tell you what economics says about those ideas, what their analysis indicates about those ideas, what additional options may be, but the difficult they have to be consistent with the advice and information and analysis they give to everybody. have 535 masters when they i bring in the senate. i know you don't like to talk about the senate in the house, when you do that that is a lot. it is more about the consistency of the advice. independence also means non-partisan. independence means not captured by one party or the other or

beholden to one committee or another, working for all of the congress. i think that you can have conversations with the director. you can go one-on-one with the director. you can raise some of these issues. he cansa put it in context for you. the same can be done at the staff level. a matter of understanding they have to give the same set of basic analysis to everyone and everyone has the benefit of their thinking. it may not line up with a particularly policy position or not. they set up cbo to be independence, for congress. say independence, independence for congress. budget committee is set up as policyt arm. the budget committees sort of set the policy positions using that non-partisan analysis and go forward from there, to be the policy, it is policy ideas and not so much cbo on the policy side. >> miss macguineas, you said you wish we were focused on

bigger picture issues than just process and yet we probably spend more time arguing about the referees than we do focus on underlying policy. seems to me we should push the referees to the background. they should be referees of behind the scenes conversation but they shouldn't rise to the level of importance that it gets in the way of the actual policy conversation we're trying to have. >> i think you have asked the most interesting questions in this whole hearing because i still think about the ones you asked previous panel about cbo versus omb and they're really thoughtful. i think cbo we need a referee, we need a referee that we agree is doing a good job. that is why oversight hearings are really important. then we need to spend our time disagreeing or vet evaluating cbo and scores we're gettingng on things. not to say they're perfect but we need to debate those bigger issues.

cbo score it has will not be as important spending our time thinking about what it means to ad $14 trillion to the debt. i'ms thinking about energy and getting a budget resolution passed that hopefully has reconciliation and savings in it. all the things that are going to improve the fiscal situation. to your specific question, i think cbo needs to be political political -- apolitical and also accountable. you set rules for them to follow in apolitical manner and when it isen appropriate you need to change those rules. different than omb, they are differenter parties with differt policy previous ends recognizes they don't cam back i think this is good policy or good or bad goal the way they do with omb. that is having one president versus all members ever congress. >> i'm not sure that omb has so

non-economists or cbo has so many non-economists working withth them until the chairman d these hearings. is there a downside for us partnering those two agencies, both charged with providing non-partisan counsel? >> well a couple of things. my view theyne have different, having worked at crs too, their missions are different. youu know, at crs is has to be broadly, basically congress's research arm. they are not required to set priorities but don't have to set priorities like cbo does for the type of work that cbo engages in. while there are some similarities theo broad sort of budgetary and economic analysis that cbo does is different from the policy analysis and research done at crs. i think you have goty to have, n my perspective, you need to have a single entity that is producing cost estimates and other analysis that is used in the budget process and there is

important work to be done on transparency and effective communications and taking no account all the latest research but i think a single entity providing that is important to avoid confusion in the budget process. make sure there is level playing field. estimates and analysis that's used to support that. so i think the two agencies are distinct. there is an importance that they be distinct because they have completely different missions. >> mr. chairman, thank you for -- >> i want to give miss macguineas an opportunity to answer that question as well. >> i think it is an intriguing idea. i think there could be some real potential in that. i don'tit know the details of wt the downside could be but i think it is intriguing. >> thank you. >> mr. renacci, ohio. >> thank you, mr. chairman. thank you to the panel. i love budget meetings. i get frustrated here, we're all talking about the answers.

i remember somebody told me in leadership one time, budget is just a vision, it is not a path. no. thel budget should be a path nt a vision. we have a path. we have to follow the path but i want to flip back to cbo because my biggest frustration with cbo, in a business world, i was a turnaround guy, so i would take over businesses that were in trouble, i would bring my cbo in,ke my individual, i would tel him, give me analysis, i need to make decisions based on your analysis. what he would do or she, depending who it was, give me best case, worst case, then i knew where i was at. best case, worst case. the problem here that cbo gives us only case. so that is a problem. best example i give you, that is where my frustration, cbo estimate amount of americans that would no longer have insurance on repeal of individual mandate, i brought this inn previous hearing was significant difference from s&p.

close to 10 million different. for members of congress it is important to have understanding to decide how confident we can be with cbo i think we could be much more confident when somebody comeses in, best case, worst case. you make your decisions because there is no single case. there is no individual case. mr. davis i would like you to tell me youren thoughts on that. >> that is a good point and i what would say broadly speaking that is sort of what cbo tries to doo in its analysis. what cbo says, what they try to do,s basis of their analysis i, to sort of try to find the middle of the range of expected outcomes, taking into account what outcomes are based on research and data and information. their experience, what the models show about a particular outcome for a particular policy, because what they, what they do, what they said before at this hearing to try to prepare estimates and analysis to support the budget process.

the budget process requires essentially a set of single numbers, single estimates for typically a 10-year period. that is their thinking. they're also, you know, have to a budget baseline. they're under the budget act, required to use current law baseline, that will often inform their analysis, the basis of theirus analysis. that will cause frustration, but to a broader point, hopefully when they write this, write up the analyses, when they try to discuss all the he will elements and assumptions, he discuss what the wide range is, what broad, best case and worst case scenarios are, form of writing up what they think their best analysis is, which is sort of the middle of the range distributions. trying to give their best judgment based on all the information they're aware of. >> that is why we need more transparency, absolutely so we see best case, worst case. we get niece numbers and

everybody lives and dice by these numbers. >> i agree. >> that is interesting. dr. rivlined biggest problem we need the president, house, senate, to review expenses, deficits, debts and reality. that is good point. that is where cbo would be helpful, miss macguineas, i appreciate, we had a lot of conversation over the years about the budget process and national debt and deficits and i admire your leaning forward on this issue. how can cbo help? we don't talk enough about that. should they be talking about it and how can they help members of congress in the area? that should be the starting point. i know they dig down in legislation, the big picture we're going in the wrong direction. i don't know if you have any thoughts on that? >> my guess for folks at cbo they are painfully aware how fiscallygo unsustainable our pah is because you can not look at cbo document and not come away with that, when i switched

careers into doing it when i read it because the numbers tell the story. i thinkco as alice rivlin said t is absolutely right they don't come out to say to congress you need to do this. they don't push policies more. they shouldn't be in the role of telling folks what to do, unfortunately the numbers are so bad they speak for themselves. this is really issue, it shouldn't be up for delate as a problem. anybody who looks at a cbo document will know that it's a problem. that the debt is growing faster than the economy as far as the eye can see. i think continuing to publish their reports. then we all have the role of making them more, putting them on a bigger platform, that is something you worked on very clearly and strongly which is how you kind of have overall national reports to the country about the fiscal state. so i think members of congress take what cbo does, look at numbers and use to it make the picture clear. >> the only issue, i have run out of time, we have a

representative government, sotaa lot ofes members don't understad theke reports when they come it. i do. you do. we have to make sure they're emphasizing that. many times we make decisions based ondo the next election, nt the next generation. i yield back. >> mr. arrington from texas. >> thank you, mr. chairman and want tot thank the panelists fr your counsel and your presence here today. i find myself enthusiastic agreement with a lot of what you said but in the interests of time let me go to the nuts and bolts of cbo. i think that is the main purpose here. although i would like to go to the real threat which is the debt and deficit spending. let me make one comment on that. because i agree with miss macguineas, the cbo has little to nothing to do with stopping this train wreck that is going to happen if we don't change our behavior. it is the will of the united states congress, plain and simple. we can make reforms on process.

we might be able to put some accountability measures in there that could help but ultimately it is the collective will of the united states congress and as a new member i'm awfully discouraged by myit first year d what we were able -- even as majority, i will just say it, to send a budget that finally got at the drivers of the debt which is our mandatory spending programs, reduced that, more than we have in 20 years, sent it to a majority, simple majority republican senate because there is reconciliation, they pulled it out. so, interesting way to start my time here in congress. nuts and bolts, would you agree with me, mr. davis, that success for cbo is delivering timely and accurate information to this committee so we can do our job? >> as best they can. >> to put it simply? >> yes.

>> so i subscribe to the peter drucker, if you can't measure it, you can't manage it. how well is cbo doing on delivering timely and accurate information? >> i think considering the demand they're under i think they do really, really well. >> do you have proof of that? do you have proof of that? can you give me a scorecard? how often have they been right? toto me this is also the biggest challenge, one of the bigger challenges in this oversight role we have in congress is, i don't know which programs are working, which ones aren't. we fund unauthorized programs. i can't tell you how many hearings where i asked the simple program, what is success, how do you measure it and how are we doing? i think cbo if we're going to manage it, at least oversee the management of cbo, we need to be able to ascertain their success rate. and with some reasonable sort of margin for error, how, what is their batting average?

then where can we identify, makingre adjustments and improvements? i certainly think resources are a part of the universal, best practice for organizational excellence. if they need more resources i think we need to talk about and i think we need to do it. but they need accountability too. i don't have a scorecard. is that fair for me to make, draw that conclusion at this point? . . are you satisfied that what you are doing is pulling in information that is objective is fully informed of their analysie information you think they should have and you should share it with them or if you think it is not well explained you should

share it with them. but i think it's more about the process and staying true to being independent and objective. >> i can only judge the inputs by the outcomes. if i know they are hitting the target reasonably well then i can say the inputs must be good. if they are not let's look at the input in the process but to me you got to start there and i don't have much visibility. i do think the review with setting would be a very important to this process. i consider it important to all the work i do before i complete something or submit something. ms. macguineas what you think about the review process for the vetting process with respect to cbo and their information and analysis? i know they have an advisory board but is at the right board and right people? >> i like your question a lot and i heard keith hall testify concerning the analysis of the actual which seems the kind of thing in the right direction.

certainly there should be an ongoing evaluation of how they are reformed. one of the important things is then to break out -- to be wrong on every single number but no one can be right on every signal number but when they are wrong because of the behavioral assumptions were wrong because things that change in the economy or other policy change the outcome so we have to be clear to do that and make sure the numbers are used responsibly. yeah, here reviewing is an interesting idea. i look through the panel advisors right before the testimony to make sure they were diverse and solid as i thought they were anything like an excellent panel of advisors. i would have focused on let's make sure they are really and truly engaged in a deep level and talked to a number of them over the years. i think the review makes complete sense. people are concerned that the outside perspectives of cbo are not diverse enough we should, by all means, recommend they talk to additional academics and experts. >> my time has expired. thank you. >> mr. palmer, alabama. >> thank you, mr. chairman.

mr. macguineas i've heard it said that getting a good cbo score is similar to getting a good sat or act score and a lot of it comes down to being good at taking the test. can you discuss some of the budget tricks and that they use to get favorable cbo scores -- if you can. i have a couple things i want to point out. >> yeah, as i mentioned, we came up with these huge long lists and i was stunned to learn just how many there really are that are utilized and we were concerned about publishing it because it felt like we were doing the bomb makers manual saying here are the instructions to use the gimmicks instead of don't use them. don't read them if you want to use them but only read if you want to stop them. >> sport please use sport metaphors not bomb metaphors. >> sorry. i think will support one is timing expirations.

when you have things that expire which are intended to expire and for this i will talk about tax expenditures. it's a perfect example of things that aren't paid for and plan to expire and we need to extend these and we should not pay for them even though they weren't paid for them before or pays that are put into legislation in the out years and when everyone knows that no one actually assumes they will be paid for and we have a lot of recent examples of that to any of both parties voting to never let those papers kick in. >> there are other issues that we have seen over the years. i iran a think tank for 24 years and was involved in did a lot of work at the federal level and i saw things on the affordable care act the class act. >> that was a big-time gimmick. >> yeah, it was a joke but the cbo allowed itself to be manipulated into that and to

show less of a negative impact on the federal deficit. >> sandy would know better than i but i think a lot of those come from budget committee to cbo. >> i do not disagree. [inaudible conversations] >> the fact that it does tenure scoring in the class act was five years. >> budget window was the issue there. >> the cbo has got to have the ability and take the responsibility to point this timeout. >> i do think the way it works is the rules are given cbo is following those rules and then what rules should be changed and there are many that should be changed. >> i will make a closing statement about that because i think this is right in line with what we're trying to do with the budget reform and appropriation tax course to process because they are under certain rules and guidance that hampers the

ability to do a better job. i give you another example was waxman markey, a cbo projected that by 2020 the house increase from cap and trade would only be about $175 a household in there either that by virtue of the fact that rising prices would force more household into lower income brackets and lower their taxes and it was a perverse way of saying these people would get a tax cut because their incomes were impacted and they wanted to be in a lower tax bracket. that's a gimmick of all gimmicks, mr. chairman. at that ones, certainly, i would not accuse the cbo of being political but there seems to be some bias there for that legislation to try to sell it and that could of been from the budget committee as well. i don't know.

that was in 2010. >> if i could respond briefly. i don't recall the specifics but what i can tell you is cbo closer process of legislating when it's drafted and this could have been part of an interactive process for drafting legislation and they are using the underlying baseline assumptions they would normally use and economic assumptions and i'm sure there are a lot of uncertainties but based on the legislative language that they put in front of them to estimate. >> i was very involved in that and i won't get into that numbers and how it impacts people but i grew up dirt poor so i pay potential and specific attention to things and lower income families in the terms of percentage of disposable income the bottom% i would have been five times higher than the top quintile. the point i want to make closing is mr. german, again, this will be helpful for the work that's

what committees are doing is that the cbo is under certain rules that prohibit them from doing better analysis. for instance, they are permitted taking into account savings that arise from efforts to combat waste and my pet peeve right now is improper payments. other areas where it requires a refund or investment there might be more technology and base score that is a cost without taking into account the savings and i really think this is weight we can help the cbo in particular the work be done by the select committee. i don't blame the cbo for its failures but i do think we have to eliminate the gimmicks and give accurate estimates. >> mr. bergman, michigan.

>> thank you, mr. chairman. take you to both of you. i feel sad for some of my colleagues across the aisle especially the freshmen who are not here because as a freshman you get to learn and you come to crawl, walk and run and these type of hearings are educational for folks who are first-time legislators, if you will. i may be dating myself a little bit but as i look around i remember some who might remember a comic strip called pogo and it was probably some of the best political commentary of the time and there was a character by the name of churchy who one of his favorite statements was we have met the enemy and he is us. okay. in the earlier panel former director said quote, every other year it will be a different

congress. i'd like to hear your thoughts on the challenges that that presents. >> well, it's a to start up briefly, i think that -- for cbo there are two challenges i guess. there's the policy challenge of new policy people coming in rather than additional difficulty trying to trying to reach broad agreement on but for cbo there is a new set of folks who may or may not understand, as you're saying, how it works and how the process works and under the budget act they give priorities for and how it independent nonpartisan works in a broader institution and that's a difficult challenge for them. i think -- >> is that the right answer and if you think about that in fact we have every two years and part

of me for interrupting but time moves on. have we created a long-term problem for ourselves in the 21st century technology in the rate at which things change and information flows and data has accumulated analyzed have we created -- we know we have created a fiscally unsustainable pathway and i don't think there's disagreement as we look at the pure broad numbers but have we how we conduct our business as congress now and the expectations that are laid upon cbo because you're working with a new congress every two years have we created an unsustainable path for ourselves as a continually changing congress. that is what i would like to hear your thoughts on. >> do you mean the physical

challenge or just the -- >> names, places, changing here every two years. >> i think. >> every two years. >> right, that's our electoral process and it's a challenge but i think that is why the role of the committee is important in helping to orient numbers to the process into the role of cbo. i also will call out you have a freshman member as you can see this in my time at cbo congressman paired up with democrat jim carney is now governor of delaware and informed a bipartisan pitchman group they wanted to hear from cbo on regular basis to discuss a range of issues, scoring matters, baseline roles and what is up with this and we are hearing this and can explain it for us and that complete interaction. they pulled together informally

and it was very helpful and constructive and so those kinds of things help with the two-year change can help individual members can band together and budget committees -- >> based on the history since again, the finite thing is time and two years is the time and are we any better at bringing freshman up to speed and getting them productive sooner or are we stuck in that treadmill where we go over the same class and it's like teaching [inaudible fine. every time that student comes into the airplane you know they make the same mistakes because it's a learning process. are we wasting time and money the way we do things today? >> i don't think so. i think it's the challenge of our literal system.

>> so that's a brutal reality we have to accept. >> yes, we have to turnover every two years and deal with the changes and yes, i think -- >> mr. german, back. >> no other members have appeared to seek time with our witnesses today so i want to thank our panelists, ms. macguineas, mr. davis, for appearing with the committee today. please be advised the members may submit written questions to be answered later in writing and those questions in your answers will be made part of the formal hearing record. any members wishing to split questions or any extraneous materials record may do so within seven days. again, thank you for and with that, this committee stands adjourned. [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> from capitol hill this morning news that representative louise slaughter, the top democrat on house rules committee has died at the age of 88. her office made the announcement just a short while ago. congressman slaughter was the oldest member of congress and

served her western new york district 431 years. she had been hospitalized after suffering a concussion in her home earlier this week. house minority leader nancy pelosi saying in a statement in part, louise was a trailblazer. the first woman ever to chair the powerful house rules committee. she used her leadership position to fight for women in working families in new york and across the country. reaction from her counterpart on the rules committee, pete sessions who just issued a statement saying that this morning our rules committee family received heartbreaking news about the passing of our dear friend and colleague, the ranking member of our committee, congressman louise slaughter from new york. they said the first penal chairwoman opportunity she was a force to be reckoned with and she always brought her spunk, fire in dynamic leadership to every meeting. louise is a fearless leader, deeply committed to her constituents and a dear friend. part of the statement from congressman pete sessions of texas, the chair of the rules

committee and ally look at capitol hill with the flags about to go to half staff here shortly. we'll keep you posted on further details. >> is coming up today on c-span2 the next, a house hearing on the growth of virtual currencies and live at 1:30 p.m. eastern former investors take part in a forum on the national security implications if the us draws from nafta. the primetime lineup starts tonight at 8:00 p.m. as interior secretary ryan zinke testifies about his agency's budget for a senate committee. >> this weekend the debut of our series 1968: america in turmo turmoil. for nine weeks will look back to the years to that turbulent time marked for, political

assassinations in the space race, women's rights, racial strife, fractured presidential election and the rise of the political left and right. this sunday the vietnam war from major military, political and diplomatic development through the undoing of lyndon b. johnson presidency with guests vietnam veteran and former virginian senators jim webb, author of the vietnam war novel, field of fire in the memoir, i heard my country calling. pulitzer prize-winning journalist, david, [inaudible] 1968, american turmoil. live sunday at 8:30 a.m. eastern on c-span's washington journal and on american history tv on c-span3. >> sunday on c-span's q&a, colorado college professor tom cronin talks about