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tv   CBO Director Testifies Before House Budget Panel  CSPAN  February 2, 2018 4:59pm-7:38pm EST

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game. visual history, and local historian brooks blevens talks about the history of the ozarks and stereotypes people face living in the region. >> backwardness. low level of education. poverty. lots of things that kind of come with that general territory of traditionally being a mostly white, mostly rural, mostly poor place, those images, those stereotypes, you know, they'll stick with us. and they are part of our story. >> watch the c-span cities tour beginning saturday at noon eastern on book tv on c-span 2. and sunday at 2:00 p.m. on american history tv c-span3. working with cable affiliates as we explore america. congressional budget office
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director keith hall testified before the house budget committee tuesday about his agency's history, organizational structure, and responsibilities. he also answered questions from republicans about their attempts to repeal the affordable care act last year. it is 10:00. good morning, everyone. the hearing will come to order. welcome to the committee on the butts hearing on oversight of the congressional budget office. this hearing will focus on cboest organizational and operational structure. it is the first of five hearings that the committee plans to hold regarding oversight of the congressional budget.
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the goal of today's hearing is to learn more about cbo, which was created as part of the congressional budget and impoundment act of 1974. for decades, this agency's primary duty and function has to assist congress in the federal budget making process by providing cost estimates, economic analysis, working pain ersz and other in sight you will publications. members of the house and senate budget committees rely on cbo as an objective, impartial resource when writing budget resolutions. the agency also plays a key role in advising this committee as it enforces budget rules. without question, there are dozens of fine men and women employed by cbo, including analyst sz, management and support staff. but more than 40 years since its founding, congress has not undertaken a comprehensive review of cbo structure and processes.
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in fact, cbo still operates under its original primitive authorization. i say this not to raise alarm about the future of cbo or question congress's need for it. it's simply a fact that serious oversight has not been exercised to ensure the agency still has the tools it needs to be successful in fulfilling its mandate. that being said, our intention is the same with today's hearing as it will be with upcoming hearings. we want to better understand how cbo carries out nonpartisan mission and support to congress. during today's hearing, we will take a closer look at the organizational and operational structure of cbo, including its staffing, assumptions, processes, and work products. to provide an overview on the inner workings of this congressional support agency and how it has evolved over the yeerks i'm pleased to welcome dr. keith hall.
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dr. hall has served as director of cbo since 2015 when he became the ninth director of the agency. before we hear directly from doctor hall, i want to stress this series of hearings is not to be partisan or invite cheap shots against the agency to budget independently. however, there are legitimate questions about how cbo operates and i'm hopeful that these hearings will shed light on how we can improve its operations to previ provide congress what it needs in the 21st century. to ensure cbo can efficiently carry out its mission, i'm pleased we are advancing a comprehensive review through these oversight hearings. and i look forward to productive conversations today with dr. hall. now, before i yield to my colleague h the budget committee's ranking member mr. yarmuth, you'll remind everyone this committee will strictly enforce the five minute rule.
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i'm a military guy. i like to run a tight ship. and i want to ensure that our hearings are as productive as possible. so i'll ask that your remarks and your questions are delivered with enough time for our witness to respond. if they are not, answers will be submitted for the record and i'll hold my colleagues and myself to this rule. so thanks in advance. i look forward to a productive hearing. and now would like to yield to the ranking member mr. yarmuth the great commonwealth of kentucky for his remarks. >> thank you. gracious congratulations on your new rule. all of us on gt budget committee take our role seriously and i'm glad we'll be discussing these important issues today. i hope that we will be just as diligent in our responsibilities to develop a budget proposal and will hear testimony from the federal agencies that we expect to be significantly impacted by the president's budget. director hall, thank you for
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your testimony in advance, and thank you for your service. congress created a congressional budget office to give us an independent and reliable source of budgetary information and expertise. for more than 40 years, cobb has fulfilled its mission, providing impartial, high catalina analysis to inform our decision making and improve our ability to protect the power of the purse. while everyone here is aware that director hall was appointed by congressional republicans, expectations have always been that the cbo director will carry out his or her responsibilities without a league gans or deference to any political ideology or party. same is true of the staff who are hired based on their ability and qualifications. not political affiliation. as a result, cbo produces its best analysis regardless of any desired outcome for an administration, majority in congress, or the congressional minority. despite that commitment to object jek tift, however, cobb
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has been the target of criticism. and i'm sure we will hear some of that today. you've actually heard some of it from me over the years. director hall, i do not envy you. you have what i argue is one of the thank less jobs in washington. and that is to be our objective referee. coming from a basketball state, i know how loved the referees are. in arena where passions call deep, your calls will often be embraced by one side by questioned by the oefrmt one day it's the republicans complaining, next it's democrats. that's been a reality in congress since cbo inception. but there has been a dramatic shift recently in the treatment of cbo. and as members of the committee this should be deeply troubling to us all. questioning and fair criticism of cbo have morphed into more caustic attacks, many have crossed the line. and much of this friction seems to colleagues efforts to repeal the affordable care act. look, i get it. i would not want to defend increasing number of uninsured
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americans by 20 million or causing premiums to sky rocket particularly when there is no viable plan for replacement. but i'm not sure what you thought cbo analysis would show. affordable care act expanded coverage through 3 related strategies, insurance coverage available to all, requiring individuals to get covered, and subsidizing premiums to make coverage affordable. if you end the individual mandate, which we have just done, people will go without coverage. if you ends subsidies that help families afford insurance, people lose coverage. if you takeaway consumer protections and once again allow enshuners to play gain, premiums increase for everyone not in perfect health and people lose coverage. no way around the fact that repealing the forktd wiaffordab act will result in millions losing coverage and no way to defend that to the american people. so with no where to turn, many of my republican colleagues unfairly went after the cbo.
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inappropriately impugning the integrity of the agency and the staff. i want to be clear, i think congress has ever right, even a duty to review cbo work and ask questions. and cbo needs to be forthcoming in providing explanations. democrats have certainly raised questions about assumptions or interpretations. but what we haven't done is called into question the integrity of the institution or individual staff members. it's all too easy these days to take refuge and information that tells us only what we want to here. but that does not lead to sound policy. cbo does not exist to give us the information we want to hear. its job is to give us the information we need to make informed responsible decisions. so someone of the few institutions in washington that serves that role. tax on cbo is not attacks on staff, but as deliberative body. reduce government and undermine the standards under which a functioning democracy depends. today i hope to hear from you dr. hall how you ensure your
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work is objective and transparency at cbo. i'd like to learn more about your staff and any need for additional funding or tools. you'll likely hear from us disagreements with some of your methodologies. i think some will challenge you in the process and enyour age you to look at alternatives methods. i think that's fair game. and look forward to that discussion. thank you for your leadership at cbo and for your testimony today. i yield back. >> thank you. in the interests of time if any other members have opening statements, i would ask that they be submitted for the record. i'd like to now introduce and recognize director of the congressional budget office, dr. keith hall. dr. hall thank you for your time today. let me say how enjoyable it was yesterday to visit the fourth floor of the ford building and the great staff work that's taking place over there with the congressional budget office under your leadership. the committee has received your written statement. and it will be made part of the formal hearing record.
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you have ten minutes to deliver your oral remarks. and the floor is yours. thank you, sir. >> chairman, womack, thank you for inviting me to testify. and thank you for your support and guidance. we at cbo have long relied on the budget committees to explain our roles to others in congress. we also rely on you to provide constructive feedback and guidance on koj's priorities. the work on your part has been key to our success over the years. i would like to make ten points in my remarks and look forward to talking to you how we can serve congress better. first, stronger role in budget matters. cbo wags established under the congressional budget act of 1974 that would support the budget process. cbo mission is to help the congress make effective budget and economic policy.
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in carrying out that mission the agency offers alternative to the information provided by the office of management and budget and executive branch. second, the congress sets cbo's priorities. cbo follows processes specified in statute or developed by the agency in concert with the budget committees and congressional leadership. cbo's chief responsibility is to help with matters under their jurisdiction. also supports other committees particularly the appropriations, ways and means and finance committees and leadership. among cbo statutory rirmtds is producing certain reports the best known of which is the annual budget and economic outlook that reports includes cbo baseline budgetary and economic projections. cbo is also required by law to produce a formal cost estimate for nearly every bill that is approved by a full committee of either house or senate. those cost estimates are only advisory. they can but do not have to be
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used to enforce budget rules or targets. moreover, cbo does not enforce rules. the budget committees do. third, cbo produces a lot of work each year. for example, last year they 440 cost estimates. gave help to staff. and published many reports about the budget, the economy and related issues. nevertheless, because of limited resource, the number of estimates and an analyses that cbo can produce fall short of congressional requests. moreover, we must balance our commitment to responds to the congress to release estimates and analysis only when their quality is high enough. fourth, in order to provide congress with the high quality analysis that it needs, cbo staff has expertise in many areas. among cbo roughly 235 people, the largest concentration of
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expertise is in the area of health. other areas of focus including national security. labor. taxes. energy. and macro economics. maintaining a broader array of expertise allows cbo to respond to policy makers needs quickly. analysts are organized into number of divisions but requires work for more than one division. cobb analysts also pursue high quality accuracy. ta approach issues with detailed funding of the programs and tax code. carefully read the relevant research literature. they painstakingly analyze literature from the government. and diverse range of outside experts, representatives of industry groups, other private sector experts and government employees at the federal and state levels. some of the consultations occur during periodic meetings.
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fifth, cbo analysis is objective and nonpartisan. mainta maintain this in many ways. another is we hire people on the basis of expertise. nearly 80% of cbo's employees have advanced degrees. and without regard to political affiliation. we carefully consider whether potential analysis can perform objective analysis regardless of their own personal views and enforce strict rules from having conflict of interest and limit political activities. experts views as you present the likely consequences of proposals being considered by the congress. our estimates are inherently uncertain but our goal is to produce estimates through the middle of the distribution of possible outcomes. sixth, models do not produce cbo estimates. cbo does. cbo estimates often require
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projections of how people in institutions would respond to pro decembered changes in law. computer model is one tool that they may use to make such a projection. various kinds of models, complex, and regression, and calculations in spread sheets. cbo models are constantly being improved. they cannot show the full effect. analysts must routinely go further with other information until the estimates correspond as closely as possible to what the best research suggests. seven cbo has rigorous system of checks and balances. all reports reviewed internally, that involves many people in the agency. experts help them hear all perspectives on issue. continually revisit our past work and between our projections
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and actual outcomes. also compare our analysis to others work and incorporate outside feedback into our projects. eighth, they priority toois transparency. many approaches to be transparent. to begin with, cbo cost estimates a estimates and publications. including our projections about the committee, spending, revenues, and health insurance s subsidies. key parameters. and seek external review of our reports before released and methods in which our products are based. cobb also promotes transparency. when cbo kpleetsds a formal cost estimate immediately made available to all congress, their staff and public on cbo website. furthermore, they regularly explain their analysis to staff.
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for instance earlier this month in collaboration with the research service, my colleagues gave presentation to 150 congressional staff members about how cbo insurance costs and coverage. unfortunately the pace of action limits the time available for providing extensive explanation of estimates. and because the over all demand for cbo work is high t and resources are contained, we need to balance requests for new analysis. and with our other responsibilities such as regularly updating baseline projections. ninth, we evolve as needs evolve. true to original mission, we work with congresses not envisioned when the agency was first created. for example, as legislation has grown more complex, we found ourselves spending more time preliminary analysis and technical assistance during the drafting stage. and being asked more often to prepare cost estimates for bills
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heading to votes marked up by committees first. to accommodate the needs, cbo shifts and develops new analytical tools. we significant resources to identify health care issues. similarly, improved our ability to study how legislative proposals would effect the economy and thus the budget as congress desire for dynamic analysis intensifies. tenth, cbo is always looking for ways to do things better. reviewing every aspects of our simulation model of heekt insurance coverage. in addition, we will further improve our capability to perform dynamic analysis as well as how it effects the budget. responsiveness and transparency top priorities of mine. and cbo has plans to bolster
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them further. we will increase the public documentation of our computer models. we will also do more to explain how athey do this. this will depend partly if we have received the funding. as always, we look for ways to serve you better. i look forward tour suggestions. >> look forward to the questions. the chair expects to be here for the entire did your aches of the hearing. and as such i'm going to defer my time until later in the sequence of the q&a. soy so i'll be yielding first to our members who i know are on the tough time clock because of the things crammed into one day. so i'll withhold my questions at
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the present moment and use those as we cleanup the hearing at the end. now i yield to my friend the ranking member from kentucky. >> thank you, i intend to do the same thing. i'll sit until the bitter end with you. thanks. >> the first round of questions go to my friend from oklahoma. mr. cole. >> thank you, mr. chairman. i want to begin by thanking you for the hearing. i know it's important for us to do. i begin by thanking you dr. hall, and your staff. i've dealt with a lot and with the staff and it's been professional and courteous no matter who was at the head of it. i think you have a fine agency. i don't always agree, but never had any difficulty getting the explanations and the judgments, and that's fair enough. i do want to ask a couple of things. and my good friend from kentucky talked about the affordable care act analysis.
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and there is one area that i want to ask about. and it's sort of down in the weeds. and then i want to build on that and ask you how you come to assumptions and models and what kind of input, if any, congress has as you build your predictions on a series of assumptions and models. as i recall, and i think i've mentioned this to you before whether you were kind enough to come by my office, in the model that was used, there was an assumption that nonmedicaid expansion states would all become medicaid expansion states. and, therefore, people would get insurance and, therefore, they would lose insurance later on down. i quibble with that. just because, and i'm not basing this on a policy argument either way, i'm not arguing for or against the affordable care act. i can tell you politically in my state that is not going to happen. no way it was going become a
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medicaid expansion state. population was heavily opposed. just politically was not feasible. and frankly state didn't have money for 10% match at the time. so there are literally in that model of how many people lose insurance a bunch of people that don't have it in oklahoma would not get it because you would not have the medicaid eksz pangs so therefore wouldn't lose it. so take me through how you make those kind of assumptions. and then as you are doing that, if you would, because i think when you make assumptions like that, sometimes it would be helpful to, and maybe you do this, just talk to the committee itself, both sides of the aisle, and say, okay, this is what we are doing. do you have a problem with this? do you think there is some fault in this? or something else we should be thinking about? we shouldn't be making the final decision, you should, but more impact back and forth between
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members and institution which is here to serve them? >> tlaung for that question. that was actually a tricky part of the aca for us. because initially all states were required to expand. so our initial estimates had 50 states iexpanding. then when that was over turned, we have course didn't anticipate that. so now into an area where we now have to sort of predict how many states will voluntarily expand and won't expand. now, we have never been so extreme that we think all the states are going to expand. i think right now we anticipate that enough states right now have expanding that it covered about 50% of the population that could potentially be eligible. we see it going up to 70%. so not so extreme so we go to 50% to all the states. it's much lower than that. and that's a tricky thing. because what we've done is looked at states, looked at past behavior, looked at a number of
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things, how they have taken federal money in the past. and sort of put them into categories, buckets, if you will. and from those bukckets we assin some probability if they expand over the next ten years. although we put states in the buckets, state a could actually be in ha different bucket in reality, and state b could move back to that other bucket sochlt there is uncertainty in that. and we try to not focus too much on the individual states. once we have states categorized we then calculate the population and put that on there. >> please tell us who made these decisions? and is there any political dimension? i mean literally in a lot of these states members on both sides ft aisle give you a pretty
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good opinion, again, reserving for you? >> first of all, we decide what are the different things that could influence whether a state expands or not. we had large number of dimensions under which we did that. and used to put them in the buckets. now, we worked that out with consultation with folks. i had a briefing talking about how that was done. that sort of thing. we did not -- i don't know exactly who we wound up talking with. we probably talked with some state insurance companies. >> i don't want to be the first guy the chairman chastises for running overtime. so thank you. we'll visit about this again. but thank you very much. >> california. >> thank you very much for this hearing. and also thank you director hall for being with us today. today's hearing giving us an opportunity really to discuss how important cbo's impartial analysis is to congress and to the american people. and i'd like to reiterate the fact that congress created cbo so we could have clear guidance
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on budgetary matters to inform our work here and for the public and it was not created so republicans or democrats could smear the organization's impartial and nonpartisan analysis just because we don't like cbo scores. last year, director hall, and our ranking member mentioned aca, it's a fact that the republicans spent weeks attacking your organization's score of their, quite frankly, repeal bill. they found it ridiculous when speaker ryan jammed through an updated repeal bill without a score in may. and that upon your analysis, though, it would reduce health care coverage by 32 million while increasing premiums for older americans by as much as 800, i think it was 850%. so can you just explain how your
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o comes up with just the basic analysis of how many people will go uninsured? how you came up with that? and what else do you need from us in hoard to ensure that these attacks no longer happen? what is it you think we can do to make sure that your job could be accomplished without the partisan attacks? >> well, i'll start with the last question first, briefly. things like oversight hearings are very helpful to us. i love the chance to talk about things. and one of the things i wish we were able to do more is come to visit individual's offices and make little presentations on things. i've never turned that down, but i think in hindsight i would have pushed into ocffices more how we got the numbers and what we were thinking. on the aca repeal, various versions of that, but some things that were kind of clear,
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right. there were aspects of it that were essentially reducing subsidies for people. things that were to reduce the expansion of medicaid that would eliminate the mandate. so those are all things that are going to work to lower the coverage relative to our baseline. even just saying those things without modeling it, i think you are talking about a decline of probably tens of millions of people from coverage, without the modeling. and with our modeling we spent a lot of time doing this carefully different aspects of it. and best estimate i think on the final bill was something like 23 million person decline in coverage overall. but involved a very long process and a lot of steps to it. we used the famous health care simulation model, that was just a piece of it. we had to create several other models. we had to use models looking at the interaction with medicare.
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we had tuesday a tax model. so it was a very complicated process. i can't do it justice here, but we did make a presentation that i mentioned at the congressional service, going through exactly what we did to get to that estimate. i can make those floats available to tu and we can think about doing another presentation. >> do you think it was the outcome of the analysis that was not liked? >> i can't guess. i think the numbers were very large for folks. and i personally am not sure they should have expected anything but pretty large numbers. but we certainly can try to do better in explaining what we've done. >> and also, i have a few more minutes. i want to ask you about the trump administration and their criticism of the cbo. i remember they indicated their
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budget would kick off 3% growth and end the deficit within ten years. and cbo found that it would do no such thing. instead of i think it was boosting growth, instead i think you came up with 1.8% or 1.9%. so what is it again? is it the process or is it the outcome of your a nal sigs that the administration also believes was not tach rate? >> well, you know, i don't know that much about how they did their economic forecasting. they haven't provided a lot of information on it. but certainly this is part of the value i think of cbo. we did our own independent analysis. we did our own forecast in the economy. we looked at a lot of data. we were very careful about that. and when we published our budget outlook we have a lot of detail in there how we get to our economic forecast and how that kmeek forecast effects our budget forecast. so very transparent about that.
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>> thank you. >> gentleman from georgia. >> tlaung for holding the hearing today. you have your work cut out for you. i'm reading from the post, tune in for the congressional office. it's hard to see how we get from where we are to where we want to be. i thought my friend from california accurately expressed her frustration about partisan attacks on the budget office. and then went in to use the budget cbo data to make partisan attacks on bills. and i think that's a challenge. when i go back and look at the 74 act, i think you said in your opening statement, director, cbo was created to give congress a stronger role. i think what was actually true the budget committee was corrected to give stronger role, and budget committee. under the original committee you
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were to be the joint staff. isn't that the original incarnation of the cbo? >> yeah, i'm not sure what the original intent was. but certainly that characterization is right. we are here only to assist the budget committees and the rest of congress. >> my reading of history tells me the senate found it beneath them to share staff with house budget committee, so once they in his on having their own staff, and we have our own staff, and you were left to advise us both on the side. my experience, you talk about hiring people irrespective of political outlook, and i think that's very challenging to do. my experience with cbo directors i tend to learn more about their politics after they are gone than while they are there. we see a lot in hindsight. i'm reading from a cbo american health care act. and the top line says this, cbo
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estimate that enacting the american health care would reduce federal deficits by $119 billion over the decade. and increase the number of people uninsured by 23 million in 2026 to current law. what you could have said we are going to increase health care for 12 million people between now and 2026 current law? you could have said we are going to expand the choices people have and repeal the mandates in their life. every single sentence has a political flavor to it. you rightly describe your role as scorekeeper, but because words have meaning, every single line takes on a political connotation, how do we scrub to prevent that? and specifically, for example, did folks talk about describing the american health care act in health care freedom terms
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instead of people losing insurance because theyec it's not right for them and they leave it on their own volution? >> i respectfully disagree our language was political. one of the things we tried hard to do was to be very factual about this. >> let me interrupt you. because my time is limited. that's critically important. the top line says americans lose something. the fact is americans have the right to choose something new. they lose nothing. they make new choices. and if you don't recognize that line as being political, then we have a much harder challenge. if you recognize that just by nature of words having meaning, they will be political. someone will take those and use them politically. then it may not have been your intent, but at least we recognize the outcome of that. >> we did not use language like lose. we talked about how the number
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of people with coverage would change over time relative to the baseline. i think part of what happens is we have no control over how the press reads our work and interprets it and translates it. and i think sometimes some of the language that people use in describing it is not really our language, and it gets attributed to us. we try very hard. this was a document written by members of congress. we have lots of detail in there where that change in coverage -- >> those are the winds of change blowing here, director. [ laughter ] >> you make a very interesting observation. cbo was in fact created to advise congress. and i would expect that you probably get more attention from outside of congress than you do from inside of congress these days. though we won't have time to do it in that hearing, i look forward to having that conversation. i think congress could benefit more from your work if it was less the object of political
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conversation more policy. >> let me say one thing about that. that was a conscious decision. when we put out the estimates, while the debate was going on, i got so many offers, we got so many offers to go appear on tv and talk about things. we deliberately chose to let our report speak for itself. that would be like interviewing the referee at halftime. right. made our estimate. . we did our best to describe t then it was up to you to deal with the politics and decisions about it. that is consistent with the idea we are providing advice. we are not trying to get attention at all except by you because we want to help make you good decisions. >> from massachusetts. >> thank you, mr. chairman. thank you director for being here. i appreciate your presence and your work. i'm reminded of when i lost my dog, who i loved very much, and
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people expressed their con doll sen cole doll enss and i said no i have the freedom from my dog, that's how i looked at t can you tell me what are some of the transparency initiatives you have taken to better understand, to help the public better understand your work? you admitted this is a place where you could do better to help congress and the public understand your analysis. so what are some of the things you are working on? >> sure. we always relied upon trying to write-up our estimates as clearly as we possibly can with as much detail as we possibly can. and we always counted on being able to come in and talk to members if they have questions and that sort of thing. lately, we are hearing concern over tran par antsy. trying hard to increase transparency. and doing it in a number of ways. there has been a lot of talk
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about the health insurance coverage model where completely revising that. we'll be making presentations about different aspects of that publicly so we get feedback on it. and we are going to provide documentation and provide some computer code. that's a big lift. and actually we have been planning on doing this since i came on board three years ago. we have been too busy doing health care estimates. we had hoped to be done literally a yearing a. but too busy doing health care estimates and having to do that with the old model and trying to be more tran transparent. that would help. also trying to document our processes, increasing that. trying to document our models more. doing things like our long-term budget model, redoing parts of that, make that publicly available. >> director, what kind of formal review does cbo undergo. >> do you consult outside
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experts? what are some of the ways that you check your work? >> well, part of what we do is we train people very carefully that they need to go out and get information from various different sources with different poirts of view. and people who have some understanding not only how legislation would work but how it would be implemented. so we do that very carefully with training. then once we get that done, we try very carefully to rely on all the data we found to make a general opinion on how things are going to work. we have a very careful review process. everything we produce is reviewed at several different leve levels. for big things we have a huge number of people involved. health care estimates we probably had two dozen people involved. so a lot of view points inside cbo, but also trying to get variety of view points outside of cbo. >> are there analytical tools you would lack that you would
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like to have? are there places where you feel you could improve the robustness of your analysis if you had access to more materials or more resources? >> certainly with the analytical tools the answer is yes always. because we have so many models. we are always trying to update them. we always need it to be adapted. to give you a range of work we have, we did account of the models, we got up to about 215 different models and constantly updating these things. so this gives you ha idea of the challenge in keeping these things up to date. have a lot of people doing that. and also a challenge for the transparency part because it takes time to make these available. >> my final question is about relatively new challenge you face which is on this outside criticism of cbo.
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as anyone who has led a team knows moral is important and it effects the quality of work. has the moral of your team suffered as a result of these attacks? and how do you see that affecting your work going forward? >> i think our moral has held up pretty well. because i think we have people who are professionals and they expect that people criticize and disagree with the analysis. that's fair game. we do have some trouble when people call us biased or something like that. which is going just too far. because we are actually trying very, very hard to do our work carefully. i think for the most part people understand. and we've had quite a few people come to our defense. people actually know cbo's work and view cbo's work carefully. that's been very helpful. >> thank you, mr. chairman. >> gentleman from alabama, mr. jerry palmer. >> thank you, mr. chairman.
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i want to get away from the partisan jabs and get to issues that i think all of us ought to take very seriously, and one of them is your report 2017 the long-term budget outlook. and you pointed out that, this was about a year ago, that debt to gdp was about 77%. is that where we are? >> yes. >> and you also pointed out in 30% that the gdp will be 150%? >> yes. >> and for anybody who is still a wake at this point watching this, i want to point out that our debt would behalf as big as our economy. is that right? >> that's correct. >> is that a steer us problem? >> it is a serious problem. it's not getting better. >> would you suggest that this committee might ought to be taking a very serious look at how we scale that back instead
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of talking about what we did last year, year before last? >> well, i want to be careful about making recommendations to the committee. >> you put out the report. and it's a serious report. and i assume you are planning to release another long-term budget outlook in a month or two. would that be fair? >> that's fair. >> okay. what are -- you are also looking at the numbers now. i don't know if you can speak to that. but roughly what would we need to do in the next budget to get us on track to say get us back to the historic 50 year average for debt to gdp which i think is about 40% is that right? >> that's right. yes actually have some of those scenarios in our budget outlook coming up. we have some scenarios what it would take if you start now. i don't know it off the top of my head. >> it's about $680 billion? >> that sounds about right.
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>> so my point, mr. chairman, since you are now the chairman of the budget committee, we have some serious work to do if we want to get our fiscal house in order. and it's going to require that we make some tough decisions in regard to budget, mandatory spending, and that would include health care. also, i want to ask you. you in your last report that we were looking at, i think you were projecting economic growth at 1.9%. is that correct? >> well, yeah, the long-term economic growth would settle in at 1.9. >> what's long-term, ten years? >> i think we settle into it, that's right, before ten years. seven or eight years, and then going forward it would remain at about that level. >> so are you optimistic or pessimistic that that number might improve? >> well, i think part of what i'd like to do is point out the sort of things that would be
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needed for that to improve. >> what would that be? >> well, it would be supply side things. it would be the capability of the economy to increase production past potential. so the obvious things, biggest single problem we have is slow growing labor supply because of the aging population. >> i was going to get to that. i appreciate you bringing that up. because that's part of the work that we have to do in the budget committee in regard to making sure that the ablebodied are in the workforce and that we then take a look at what we might need to do in regard to bringing in other people to work. i only have a little over a minute left and i want to change directions just a little bit here and ask you. i appreciate the work you are doing towards trying to enhance a culture transparency at the cbo. in addition to those efforts that you've listed, has there
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been any discussion of including sensitivity announcement so you can see how small changes could drastically impact that? >> i'm a fan of that. when we have more time, outlook. that can be hard to do in cost estimates because realtime constraint. and then sometimes there are the so-called unknowns, unknowns. where there are some statistical uncertainty. >> because of limited band with for the staff? what do you need? because if we are going to start talking about how we resolve the lnger term issues 30 years down the road, these miner changes could matter a lot to this committee? >> to be honest, that's one of the reasons we have ta fair number of technical economists who are there to help us work through some of the methodology and develop some ways to be more
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transparent on things like the uncertainty. >> thank you, mr. chairman. yield back. >> thank you. >> thank you, mr. chair, and thank you for your time. before i came here i ran the department of revenue. i know they can't move forward if they have limited visibility. a business wouldn't stay in business if it only plands 30 or 60 days at a time. yet here we are, four months into the fiscal year, and have continuing resolutions. would you agree that this very short term approach under mines the budget process and introduces uncertainty into government programs and agencies? >> i appreciate the question. but i want to try to back off in offering advice to the budget committee beyond the technical work that we do. it's part of how we establish our objectivity.
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>> well, does this uncertainty make it harder for you to provide long-term budget projections? >> sure. it poses challenges. i spent some time as bureau of labor statistics, and challenge from not knowing the budget was not trivial. >> what about your own ability to plan for this year and higher staff? >> that's an issue for us. we had some extra expenses last year, and right now our continuing resolution is not what it needs to be. and if we were to continue at this continuing resolution for the rest of the year, we'd actually have to cutback on staff and training that would make it difficult for us. >> thank you. also, my district is district on the northern border washington state. it is a very politically diverse district yet everyone seems to agree we need to pass comprehensive immigration reform.
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we have farmers, business community, faith based community, across law enforcement, across the board want to see comprehensive immigration reform. and in your prepared testimony, you mention that the cbo will publish new reports in 2018 describing your processes for produci producing economic forecasts for major legislation affecting health care. i'm wonder do you plan to do any regarding immigration? >> if we have specific proposals we'll do our thing and estimate the likely impact. >> so in 2013, cbo released impact on kmeek impact of comprehensive immigration reform, that says that changes in direct spending and revenues under the legislation would decrease the federal budget deficits by $197 billion over the 2014 to 2023 period and by roughly $700 billion over the
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2024 to 2033 period. folks are talking about debt and deficit. and so as there is several proposals in both houses of congress at the analysis and modeling that will be helpful for members to know as we work to craft a new immigration bill? >> i think you've got the main takeaway is fine. i don't recall too many specifics at this point. but obviously immigration reform really depends upon a lot of the specifics. that's one of the things we're very, very careful about is that sometimes the details matter when you don't think they matter. that makes a big difference. and we rely on research literature, what the most current research literature that talks about the effect of immigration on labor force and things like that. >> well, clearly, there's a lot of work that went in from the
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cbo in the past on this issue, and it has shown that it would decrease the budget deficits, and obviously would have -- is an important part of the conversation when we're looking at a tax bill that just passed that would increase our debt and deficit by over $1.5 trillion. so i think this is an important conversation. i want to emphasize that congressional budget office is nonpartisan office, and it is tasked with objectively looking at the facts. so i want to thank you for your work. and i yield back. >> thank you, ms. delbene. mr. renacci from ohio. the witness is yours. >> thank you, mr. chairman. i want to congratulate you on your selection. i look forward to working with you in 2018. i appreciate this hearing. i hope we can look at budget committee reform we did a few years back and look at some of those issues as well over the coming year. i want to thank you, director hall, for being here.
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i appreciate you coming to my office. i know a few months ago, and talking about how you can be more transparent. we talked about my career. i mean, i spent almost three decades in the business world. i had 1 300 employees at one point in time. i had to wake up every morning deciding -- making decisions on how i can make sure their livelihoods were maintained, and i relied on people to help me do that, just like we rely on your organization. and i think that's important. but what you and i talked about in my -- in our meeting was the biggest concern i have is that in the business world you make a decision, and then you look back and see where you failed or where you didn't fail. my concerns has always been with the cbo, is that you do a lot of good work, and you put out a plan. but then we never go back and look at where we made a mistake and how we can correct it. it's easy to say this is what's going to happen. i realize it's difficult for you
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as you make those decisions, you're moving on to another issue and another issue. at the same time, i think it would be best for members, especially in the budget committee, to realize that some of your decisions are right, and some of your decisions are wrong. where you made your mistakes, where you made your failures, where you were right so we can learn better. i'm hoping at some point in time we can talk about how that transparency can be better informed for us. i still don't know how you do that. every time we do have mistakes, can you kind of talk about how you're going to change that transparency? >> one thing we've actually done this past year, we actually produced a report that looked at how we've estimated outlays, how accurate we've been after outlays. so, for example, between 1984 and now, our estimates of outlays were off by about 1.7% on average within the first budget year. and over six years we're off by
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about three percentage points. so that gives you an idea, when we make an estimate, on average, that's how far we're off, up or down. you know, it's hard to -- hard to say whether that's good or bad. we'd like it to be zero. but that's a pretty good comprehensive look. it gets hard when you look at individual pieces of legislation. they wind up being thrown into a bigger budget category. you can't always follow them. we're doing that sort of thing. we did a pretty careful report on how we did on the coverage estimates under the aca, not just coverage, excuse me, the budget estimates under the aca, that's something to actually look forward to. there's been a lot of focus on that. we went back and did a nice objective look on how we did and how others did. >> 1% or 2% on a $3.5 trillion budget is a big number. we look at those cases as well.
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the trustee report and the cbo differs on social security trust fund and the shortfall. can you tell me, you know, why there's differences there and how you're reconciling that out? as a member of the ways and means committee, i'm very concerned about social security, and very concerned about the shortfalls and the outlays. but we also have two reports that differ. >> we actually -- we had a hearing a little while back that was really helpful for us to understand how social security comes up with its numbers. we talk to them about how we come up with our numbers. i'm hoping that after we produce our next long run budget outlook that we go back to compare ourselves a little bit to the social security folks. the biggest difference starts with economic assumptions, which are sort of basic. we do have some differences there, some differences in labor force. but then there's some other things like mortality rates and that sort of thing where we have some differences. we did write up a report that has some of the details of where we differ.
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i'd like to update that. >> you would admit, though, because i talked to you about your predecessor. i have the cares act out there, i had outsiders do preparation of cost differences and cbo scores are different than my -- my outsider scored it. when i met with cbo i really did get a learning model for myself. and it's -- it was simple math. it was the differences in the -- cbo was saying, this is what we believe, and my outsiders were saying this is what i believe. you admit we could have those differences on anything, on any issue? right? >> that's right. >> that's why the transparency is so important. >> sure. >> i appreciate it. again, i yield back, and thank you. >> thank you, mr. renacci. next to florida, ms. wasserman schultz. >> thank you, mr. chairman. congratulations. it's good to see a fellow appropriator leading this committee. director la oor hall, it's good with you. for a little historical context
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for some of my colleagues, you may know i was the chair and ranking member of the legislative branch of appropriations subcommittee for ten years. in that role i was responsible, in part, for the oversight of cbo's budget. we spent a lot of time working with your predecessors to make sure that cbo had exactly what you said you needed in terms of expertise, in terms of the staffing levels so that you could really do an objective and expert analysis of all the workload that you have. that's something that congress has endeavored to continue to make sure you have because if you are hamstrung by not having enough staff then there's a concern. i've had cbo analyses i've agreed with, and some i've disagreed with. i remember when you came before us for the first time and you were appointed by speaker ryan, i believe, and you worked in the george w. bush administration, and you subscribe to the idea of
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the practice of dynamic scoring, which is an analysis -- analytic process with which i disagree. yet i don't malign your -- you and your staff's analyses even when i disagree with them. facts can be annoying. especially when they're presented to you and they don't line up with your beliefs. we're in a world of alternative facts. so, to me, it's absolutely essential that we have cbo's objective analysis in the majority, in the minority so that we can at least have some objective facts. with that predicate, i want to just ask you, under your leadership, do you feel like, given who you worked for previously, who you were appointed by, that cbo or that members of congress should read bias into your analysis that are
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generated by unduly favorable projections or unfavorable projections are the likely effects of republican policy proposals? >> i have about 25 years of managing policy analysis, policy research. i've worked with a lot of very great technical people who are professional, do their work objectively. cbo is at the top, top of that. they're just outstanding, the people. they're very, very professional. we do a really good job, always done a good job of hiring capable, professional people. the culture there is very strong to try to do objective work and get all sorts of viewpoints and try very hard to be objective about things. we have value because we're credible. and that's why i've been particularly bothered about the efforts to sort of attack our credibility. because we spend so much time trying to be objective and
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impartial and do our work middle of the road, and always have. i think, again, with people who are really familiar with us, i think we have a very strong reputation for doing non-partisan work. >> thank you. and please send our best wishes and support and thanks to the folks that work for cbo. you work excruciatingly long hours. i've had many conversations with two or three directors before you. and your work is really second to none. whether i agree with it or not. and i'll again stress that you are currently using a practice of dynamic scoring with which i and most democrats don't agree. and yet we still have faith in your analysis. before i run out of time, i just want to ask a question that's more granular. in the 2014 long-term budget
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outlook, cbo projected that with the continuation of current policy, the life expectancy gap between those with high incomes and those with low incomes will continue to grow. director hall, is there any reason for us to believe that this projection was erroneous and that an improved cbo organizational and operational structure would have resulted in a more -- which is the subject of today's hearing, would have resulted in a more accurate projection? >> well, that gap in the life expectancy is something we've certainly seen in the literature, and in the data. we're actually -- we are actively researching that a bit to see that we get it right in our forecast. that's an important part of our long-term forecast. >> yield back the balance of my time. >> thank you. mr. arrington from texas. >> thank you, mr. chairman, and i look forward to serving under your leadership and congratulations on your appointment. dr. hall, thank you for your service to this committee and to our country.
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the topic, as i understood it, was organizational and operational in nature. so i'm going to be a little boring in my series of operational questions. just because they may be boring doesn't mean they're not extremely important. so let me start with the peter drucker sort of philosophical question. and let me ask you if you subscribe to this. if you can't measure it, you can't manage it. do you subscribe to that? >> yes, actually. developing metrics about how we're doing is very important. >> how do you measure success in your organization for the work that you do and for the people you manage? just succinctly, if you could, please. >> sure. a part of it is judging the quality of the end product. everything that comes out of cbo has my signature on it. we have a strong review process. we want to be comfortable with it. we now do things that we're going to try to do more things
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to assess how we've done. i mentioned the report looking about how we've done in projecting outlays, we've done on revenues, one on economic -- >> would you say quality -- pardon me for interrupting. just to be more specific. when you're talking about quality, are you -- do you mean accuracy? impartiality? would those two be at the top of the list? >> yes. >> how do you measure accuracy? do you go back and look at what your projected and estimates, and within a margin of error that's reasonable, how far you hit the target, or how far away from the target you were? >> that's right, we do. one of the things we do, we've done privately for years, which i think there's been an increased interest in, we may start to make public, once a year we do an analysis of actuals, where we get down into all the small budget categories and see, how do we predict those numbers this past year, and what was the actual number?
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we have an analyst go through that, and we've always done this, and talk about where they were off, where they weren't off, and that is part of how we judge their performance. >> i commend you for that exercise. i think that's -- i'm comforted to know you do that. so do you have like a success rate on your timeliness, success rate on your accuracy, success rate on impartiality? whatever the metrics are, do you have that, and could i look at that? to see how often you're hitting the target. and so we can work together to make improvements. if you can't measure it, you can't improve it. >> yeah. i can see what we have. one of the things we're hampered by is pieces of proposed legislation are such a small part of budget categories. that once we make an estimate quite often we have no idea how it actually worked out because the data is just not there to do that. so one of the things we try to do is try to do more of that individual analysis.
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but a lot of it is we just can't do it. >> you mentioned -- thank you for all that. let me jump to culture. i'm big on culture. i think it has a tremendous impact on your success and outcomes, desired outcomes. you said you had a strong culture. where do you have -- where is your weakness? where culturally can you improve? and be very transparent about that. it would be helpful to us. >> i think one of the most complicated things we do is this sort of tradeoff, when we're under really severe time pressure. we have to decide what's a good high quality analysis, and try to hold to that. and so sometimes it's this real tradeoff between -- between feeling like we've got a high enough quality we're comfortable enough with an estimate, and frankly, being leaned on sometimes pretty hard by committee staff, hurry, hurry, and now we're throwing in this transparency part. that's another third area.
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and that's a tough trio of things to manage. >> let me run through the list. thank you for answering the question. are you all unionized? okay, no union members. and what are you doing now from a sort of product standpoint, or line of business, that you weren't doing in your stated mission in 1974? that is, what are you doing additionally to what you've been authorized to do in terms of products? >> well, the biggest single thing is the technical assistance we provide. we spend more time offering technical assistance, talking with committee staff, giving them little estimates of what proposed legislation -- we spend way more time on that probably than we do in our formal cost estimates. and i think that's a difficult thing. because there's no output for that except, i hope, that
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committees find it valuable. they spend a lot of time asking us technical questions. that's a real difference from the old days. a lot of it is because legislation gets to be so complicated and complex. >> thank you, dr. hall. my time is expired. i'll follow up with the rest of my questions. and mr. chairman, i yield back. >> thank you. let's go now to ms. jayapal from washington. >> thank you, mr. chairman, and thank you, dr. hall, for being with us. i want to just echo how important we know the congressional budget office is, and thank you and your staff. i do share the concerns with my colleagues that we are operating in an increasingly partisan environment where actual institutions are being undermined. you mentioned some of the accusations of bias. and i think, you know, i found several statements omb director mick mulvaney, who questioned the analysis of a bill last
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june, and a person is doing scoring of obamacare, my guess is there's probably some sort of bias in favor of a government mandate. last year the white house tweeted that the cbo continues to prove its model simply can't be trusted to accurately predict the outcomes of important health care legislation. i want to give you a chance to respond to those charges once again. but also just say i think it's important to recognize, with all due respect to my friend from georgia, who was commenting on ms. lee's questioning, that there is a difference between the -- what the office does, what the congressional budget office does, and how members choose to use it, use the results of that. and we all understand that we have different perspectives, different political philosophies. we may use the numbers you come up with in different ways. we may believe different conclusions can be drawn from those numbers. your job, as i understand it, is to provide us with the numbers of any proposed legislation.
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so i want to give you just a quick minute to respond, again, to the charges of bias against the agency. and while you do that, please tell us, if your staff are career, or appointed. so that the public, and explain to the public that might be watching what that means to be career staff. >> first of all, we hire people at cbo purely on their technical abilities. we don't ask anybody about their politics or their views in anything. we try very hard to avoid that. and part of our process is, you know, i've worked for many, many years in the executive branch where i helped hire lots of people who were very technical, unbiased, people who were able to work objectively. we go even a little further. and it's part of the culture. we'll actually go back and look at some of the places where some of our employees worked. if they've been in political jobs, relatively lately, we don't hire them.
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if they -- we check their social media. if they post a lot of things that would be inappropriate for someone at cbo to post, then it puts doubt as to whether they can work objectively. that part's really important to us. and then, you know, we don't just throw analysts out there by themselves. we have a review process that involves lots of people. and, you know, ultimately, the director's responsible for all the work at cbo. and i think -- i think the cbo has processes in place, and we try very hard to make sure that we're objective, and it works like that. frankly, if there were signs of someone being objective in their work, and not being objective in their work, that would be a problem. that would be against cbo policy. and we're -- we're like congressional offices. people work at the pleasure of the director. >> thank you.
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i appreciate that. let me talk about the importance of the cbo score. my colleague, mr. higgins and i introduced a bill to say that for major legislation we should have a cbo score before it goes to the floor. tell us what members of congress miss when we don't have a cbo score in front of us as we're evaluating a major piece of legislation like health care, or taxes. >> well, i think one of the most important and underrated things that we do is we describe the legislation very carefully and in detail about what exactly it does. and if you've ever looked at the actual text, and then read a cbo, you can tell there's a lot of work there just describing exactly what it does and what it involves and what's impacted. that's a real help right off the bat in addition to, of course, then us going further and trying to look at the effects in the budget. >> thank you. let me just end by asking, if there's anything you want to say on the recent tax bill, and how you built that -- all the wide-ranging impacts into your baseline.
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you have 30 seconds left. >> sure. well, the estimate of the tax bill itself was done by the joint committee on taxation. we're required to take their estimate. we're going to work it into our own economic and budget forecast. we've been doing that. we normally would close our economic forecast in early december. it's still open. i think we're going to close it by friday, hopefully. and it will include the full economic impact of the tax bill. and then on top of that we're now going to overlay the budgetary impacts. it will be fully scored, in a sense, in our baseline. >> thank you so much, director, and i yield back. >> thank you. next we go to the former distinguished chair of this wonderful committee, gentle lady from tennessee. miss black. >> i congratulate my friend, my colleague and my classmate on your new role as the budget chair. i wish you the best of luck. i will certainly be a team player with you. i also want to thank you, mr. hall, and your members of your
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staff for the hard work they do. i know as the budget chair and also being on the ways and means committee, the many, many hours that you all spend. you have a very dedicated staff. however, i think it is good and healthy for us to have these hearings. and i don't want to have this hearing to go away with the title in the newspapers saying that we are picking on or totally disagreeing with the congressional budget office. but i think it's healthy for us to have a discussion. and we're not talking about whether we agree or disagree, we're talking about getting it right. that's really what we want to do. because honestly, we have to set policies. and those policies that we think are good, and we get a score back that we don't necessarily think is an accurate score is difficult for us. when we look at some of those scores, you know, they are off a little bit. i know the economic forecast of the cbo was growth somewhere between 1.6 and 1.9. and the growth this year was 2.3. and we had two quarters of
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over -- of 3% or over. we know that there are going to be some differences there. but where i want to go, and it concerns me the most, and i don't really know that i understand exactly how you get these assumptions. the economic models are numbers. so they're a little easier to do. when you get into behavioral assumptions is where i have the question. because i have seen on more than one occasion an estimate come out from cbo where i don't agree with the assumptions that they're making on the behavioral side. for instance, on that was one of the bills i had about making sure our dollars under title x would first of all go to those organizations that don't provide abortions. and that there was an assumption that if we did that, then perhaps those organizations that do provide abortions would close down. and then we would have x number more pregnancies. and those pregnancies would result in more children being on medicaid.
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i have a real problem with the assumption that if one provider closes, that women aren't intelligent enough to go to another provider to get the services of birth control. and, in addition to that, that the children that would be born as a result of those additional pregnancies would necessarily all go on medicaid. the numbers were so high, the policy then is difficult because we have to pay for it. that's where i have a problem. is how we get to these assumptions that are behavioral assumptions. if you can talk briefly about that, i would really appreciate it. >> sure. we try very hard to see what sort of economical literature there is, on how these things are working, what's likely to happen, what sort of data is available. on things what you're describing, it can be really hard to make an estimate. but we do as thorough a job as we can. you know, we -- when we're looking at the health care providers, you know, how many
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are in regions where they're the only provider? how many are in regions where they're not? one of the things i think that would be always helpful, especially if it's something you don't agree with, is we love the opportunity to come in and tell you how we got our numbers and how it happened. to be honest, if you feel like we're missing something, if there's some research, literature that we didn't see, we'll take a look at it. >> so there -- i thank you for that. and i appreciate that. and i hope that that message gets out to all of the colleagues here in congress so that we can have more of that dialogue. that gets to my second point is about transparency. i think that we have to look at a way that the members of congress can get more transparency from the cbo to make sure that we are looking at what you're deciding, and what we think is not exactly accurate, and have that dialogue. so i would say one thing i continue to hear from my
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colleagues, and i've even heard it from my colleagues across the aisle, that they would like to see how you got to where you got to. and sometimes you can just say once you see the information, oh, okay, i agree with that more. but we have got to have an environment here where when we're making decisions and policies that affect the people, not only in our own states and our own districts, but across the entire country, that we have full transparency. and that probably is a dialogue we need to have more conversation on, mr. chairman, and i know that as you move forward on additional hearings, that that may be also something that's talked about a little bit more. many times you can accept what it is that someone's saying or have that argument if we at least have the transparency. with that, i am right on time. i yield back, mr. chairman. >> thank you, miss black. to california, mr. carbajal. >> thank you, mr. chairman, and thank you, dr. hall, for your
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testimony today and thank you for the objective non-partisan analysis that you provide our committee. the recent tax bill made substantial changes to the tax code that will have wide-ranging impacts on the budget and the economy. can you walk us through how you build that into your baseline? >> well, sure. it starts, of course, with the economic forecast. and it's a lot of walk through all the details of the bill, you know, of course, jct did the estimate on the legislation. but we're tasked with putting our own estimate into our baseline. we have spent weeks and weeks already going through the tax bill and working through how we think it's going to affect the economic forecast and preparing, then, for the budget side of things once we get an economic forecast then we have the budget forecast on it.
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there's so many steps on it. but we have a bunch of really dedicated people, a really good tax group in there. and we're going to try to produce something that's understandable and is as accurate as possible. >> do you ever have third party outside people that look over your analyses? >> absolutely. we have a very good panel of economic advisers, they meet twice a year. they approve our economic forecast for us. we make a presentation to them. they'll make comments. they're a diverse group. whether they realize it or not, when they volunteer to be on the panel they give us their phone numbers and we call them up and we'll have discussions with them on aspects of the analysis or the forecast that we're unsure of. >> and how do you go about selecting those advisers? >> if you look at our panel, it's up on our website, a panel
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of very, very impressive people, from different schools. and we actually make an effort of people who have sort of a diverse background with respect, possibly, to politics. i don't want to -- we try to avoid that part of it. but we try to get people who have different points of views certainly on some of the things that we have to deal with. >> have you ever gotten any criticism or objection from anybody on this committee about any of those advisers? >> i'm not sure about this committee. i think -- not during my time, no. we've been pretty transparent about who they are and that sort of thing. i haven't heard anything. >> thank you. what is the cbo's best estimate of the impact of the recent tax bill on the deficit. i understand it's $1.5 trillion. >> that was jct's estimate. we are in the process, right now, of working through our estimate. it will be a little while before it comes out in our budget outlook.
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it will be there. >> so you don't have an estimate today? >> no, i don't. >> okay. do you know if the estimate that jct has put out there includes the compound interest over the next ten years? >> i think we did a version of that that included the interest. >> and what is that version number that you came out with? >> i'd have to get back with you. it added a little bit more to it from the deficit. but i don't remember right offhand. i should know. >> i believe the number was 2.3 trillion. but i appreciate -- i appreciate you getting me that information later. >> okay, i'll be happy to follow up. >> thank you very much. i yield back my time. >> thank you, let's go to minnesota, mr. lewis. >> thank you, mr. chairman, congratulations, looking forward to working with you. director hall, thank you so much for being here. i'm perplexed at the other side of the aisle's hammering of dynamic scoring. it's only a model about sane
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triold and alfred marshall came up with supply and demand curves. no one doubts the elasticity of work saving investment. if you were to ask anyone on this panel if they wanted to reduce smoking, which we ail want to do for young people, what's the first thing they'd do? they raise the cigarette tax. well, but prices don't have any effect on people's behavior. well, of course they do. and so this -- i understand you've got a very tough job. if i could predict interest rates or the super bowl winner, i'd be in a different line of work. but the bottom line is, there are things that we can predict with historical accuracy. i understand you have a very tough job. as i say, monetary policy is something you have no control over, and would have to be a problem for some of your models. but let's get back to the baseline you issued last year of 1.9% growth if we may. the atlanta fed came out with their first quarter estimate of
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4.2% gdp growth. you mentioned in your analysis, and today, that you had concerns over the labor supply. but as we all know, the gdp, economic growth, made up of two principal parts. productivity and people. either one goes up, you'll get more economic growth. did you take into account from an historical perspective the increases of productivity when there is more capital invested, more incentive to invest capital, and why you're sticking with 1.9%, or at least a year ago, we'll see this year, but 1.9% growth when we're clearly seeing faster growth, at least right now? >> the productivity has been really slow. but we do actually have in our long-term forecast productivity getting back to its historical levels. something like 1.3% or 1.4%. that is part of what's baked into that long-term growth. it's why it really is that labor supply part. >> how did you account for the increases in gdp growth in the last few quarters?
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>> part of it has been a number of things. part of it has been anticipation of the tax bill. part of it is probably demand side because we are getting stimulus. and we still think there's been slack in the economy. so there's room for sort of demand stimulus. that's clearly a bit of what's going on. >> that's an interesting point you make. i'm glad you did. that's really why some of us have concerns about this. we can go through the debate over keynesian analysis or supply side economics all day long. we had that experience. we had it with stimulus package with the previous administration and we didn't get growth. some of us would like to see more supply side analysis in there and restoring productivity and growth to quote a famous economist, john baptist, that supply will create its own demand. we don't need to go down this keynesian road time and time again. isn't that a value judgment that the cbo makes that we're going to use demand side analysis?
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>> not really. because i think certain aspects of any legislation is demand stimulus, and other aspects affect the supply side. so we don't assume at all that that supply side, that labor supply and productivity is just fixed. that, in fact, there can be policy things that affect that. >> do you think you have a demand side bias? >> no. i think -- i think one of our challenges is we have to work through the demand side in the near term years, and then slip into the long term, which is supply side. and that part's just tricky. it is two different models, really, two different approaches. >> it certainly is. it's a great debate. in 2012 you came out with the exchange coverage rates for the affordable care act. and that estimate updated from 2010 you said that by 2016 you predict around 23 million would be covered under the exchanges. center for medicare and medicaid center said 10.4 was the actual
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number. what happened there? >> well, the first thing that happened was the supreme court decision that took away the requirement of the country that states expand medicaid. that threw a big kink into things. once we corrected that, we've still been off a little bit. a little bit of talk about the exchange stuff, just really quickly, is a little bit of cherry picking. the most important thing was getting the budget effect correct. >> i'll cut you off. i've got to go. thank you for being here. looking forward to a healthy debate. i would hope you understand that you were created by political branch of government, you serve the political branch of government, this is a political exercise, and so we've got to get the referee to make the most accurate call as possible. thank you so much. i yield back. >> thanks to the gentleman, and reference to his remark about the super bowl. there is one thing you can take to the bank, and that is the minnesota vikings will not be winning.
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>> that's low. >> the super bowl. >> i miss chairman black already. >> i'm going to hear from all the minnesota people now. mr. higgins from new york. >> thank you, mr. chairman, and coming from buffalo, the super bowl is not a good subject. dr. hall, thank you very much. just a couple of questions, in the previous speaker had talked about supply side. and these are all very fair debates that should be debated rigorously. and, you know, supply side trickle down and i think the new term for all of that is dynamic scoring. and that is what the future economic impact from tax policy will be. which is, you know, it's not an exact science. and i guess that's why it's subject to a lot of interpretation. but a couple things that concern me. you know, the treasury secretary had stated explicitly,
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explicitly that the tax cuts, as proposed, that are now in the bill, particularly the corporate tax cut, which was about 14 percentage points, but the percentage change was actually 40%. the tax cuts generally pay for themselves. do you believe that? >> i want to be really careful. because different tax changes have different effects. some can have an effect on supply, and some on the demand side. >> okay. >> i think the literature, we need to look at the literature, and how things have been affected going forward. and we're going to have our own estimate of -- it's not a -- it's not an effect of just the bill, but we're going to work the tax cuts into our economic forecast. so you'll see how we view that particular bill. >> i appreciate your cautiousness. but i would remind you that there's not a tax cut in human history that has ever paid for itself, not once.
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ever. the best literature in that area comes from harvard and yale economists who say that best-case scenario, that you could recapture in economic growth about 30 cents for every dollar in tax cut. and i would challenge you to challenge me as to whether the literature says anything differently. but let me move on. the white house council of economic advisers came out with a report saying that the corporate tax cut would result in increasing annual household income. i'm not talking about a one-time bonus. but annual household income of between $4,000 and $9,000.
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do you believe that? >> i haven't read that report. but i can tell you we will have our own analysis, independent analysis of the effects of that. >> but you're familiar with that report? >> i'm not really, to be honest. >> you're not familiar with that report? everybody in america is familiar with that report. that has a direct impact on the federal budget. because if you -- >> sure. >> because if you increase household income, that increases aggregate demand in an economy, where aggregate demand is increased in an economy, that increases employment. as head of the congressional budget office, this issue has been discussed, debated in various publications over the last six months. i'm shocked that you've never heard of that. >> i can tell you in a few months' time we will have our own analysis and our own view of
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that and we'll be very careful to explain why we've come up with whatever estimate we come up with. >> switching topics, infrastructure investment. i think the president will talk a little bit about tonight, presumably, about an american infrastructure investment of some $200 billion, which will be used to leverage a sum of a trillion dollars in infrastructure through the contribution of state and local contributions and the private sector. all of us agree that infrastructure investment is desperately needed. i would remind people that the $200 billion is woefully inadequate. i would provide as an example of that is the united states deficit financed $180 billion over the last decade rebuilding the roads and bridges of iraq
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and afghanistan. those were off budget. they're deficit financed. they add directly to the debt. so what would be the ideal infrastructure investment to really have a positive impact on job growth in the american economy? >> give the witness about 20 seconds to answer. >> okay. really quickly, we are prepared to analyze any proposal that comes forward. we'll do it carefully and in detail. i do not want to make recommendations. we don't do that. >> thank you, sir. i yield back. >> next we go to the keystone state, which could produce a super bowl winner. mr. smucker. >> thank you, mr. chairman, yes, that's one other given. one thing we know that philadelphia will be there. thank you and congratulations. dr. hall, i'd like to thank you for the work that you do and the work that your staff does. i have some comments, some have already been addressed.
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but i'd like to start by just saying how important i think cbo is to the committee and to the budget process within the committee, and within congress. and it's important really to asserting the proper constitutional role of congress in developing a budget. and i say that from the perspective of having served in the pennsylvania state senate. during my time there initially we had no equivalent to the cbo in the senate. and even when negotiating with a governor of the same party, we had to rely entirely on the executive branch data in regards to decision-making. and it changed the dynamic of -- dramatically when we established the independent fiscal office of the legislative branch, similar to your role. so yes, i disagreed with some of
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your analyses about health care, but we can't lose sight of the fact of the importance of the initial intent of the cbo that was laid out in 1974 and of the importance of the work that you do to what we do. i do think your -- the effectiveness of the cbo is almost entirely dependent on its perception of members of congress. and number one, it has to be perceived as non-partisan. and number two, it has to be perceived as accurate as possible. i like your idea of more communication with members of congress to talk about what cbo does. you said you've come to congressional offices if they request at any time. but i think an important role of what you should see as part of your role is to continue to talk about what you do and the
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importance of what you do. is that part of your strategic plan at all? >> yes. the only time that i think i shy away from that is i don't want to talk about legislation as being debated. i don't want to get involved in the political process. but otherwise, yes, absolutely. >> have you ever brought members to your facility? >> yes. >> to show us the operations? >> yes. and you're -- >> that's something i'd like to do at some point. >> you're welcome to come over. >> we've talked about the -- there's been a lot of discussion about the importance of being non-partisan. i think it's equally important that we can believe that we have the best thinking out there in regards to policies that -- or in regards to your analyses. and we know that predicting is tough. and it reminds me of a quote that's often been attributed to mark twain when he said predicting is difficult, particularly about the future. but i guess in terms of experts that you bring in, could you
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characterize to me what you look for? are you looking for the best thinking in the country? would you say that the group you have really does provide some of the best experts in terms of policies that we're looking at? >> absolutely, i do. i think we get people who are very smart, very capable, who have a lot of technical skills. and part of how we get them is because we work for congress. they feel like they can make a difference by helping inform congress that we have an important job. one of the things is underrated is we spend a lot of time, our folks, keeping in touch with experts around the country. so we have a really good understanding -- >> how do you choose those experts? >> well, part of it starts with our panel of economic advisers. we have a really good panel. they're all very well smart, connected people. and we do a lot of calling and say, well, here's our topic we're concerned about. who should we talk to?
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we make an effort to get -- literally we get opposing views. if you look at some of our analytical research reports we put out, you'll see us list the names of the people who reviewed it. we treat it like it's a journal article. we try to multiply ourselves. >> i'm running out of time. i'm sorry to interrupt you. i have a number of other questions. one that i really wanted to get to, the cbo was first put into place 43 years ago. what can we -- i think we should look at the entire budget act of 1974, and update it and improve it. as a part of that, how can we ensure cbo is more effective and more efficient in its operations? you can't answer that now, i don't think. but i'd love to hear from you at some point if you have specific ideas or recommendations for updating the act and improving your operations. >> sure. >> thank you. >> miss schakowsky from illinois. >> thank you, mr. chairman.
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i also want to associate myself with the comments and the questions of mr. smucker. we're all interested in cbo being able to do the best job. and i want to thank you for the work that you do. and associate myself with all the thank yous that we have made. after the passage of the republican tax bill in december, cbo revised its cost estimate for the expenditures for the children's health insurance program. in fact, the new estimate showed that reauthorizing chip for ten years would save the government about $6 billion. so why did passage of the gop tax bill change the cbo score for c.h.i.p. so dramatically? >> the elimination of the mandate had an effect. one of the short versions is, the elimination of the mandate, we think, will raise the average premiums and exchanges. and since if children aren't
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covered under c.h.i.p., they're likely to be covered under exchanges through medicaid, then it will cost the government more by having children covered that way as opposed to c.h.i.p. directly. >> so essentially, the c.h.i.p. savings are a side effect of the increased costs that americans are going to face due to the republican effort to undermine the affordable care act? >> i wouldn't word it that way, but it is an effect of the mandate. >> eliminating the mandate. cbo looked at the effect of repealing the individual mandate, the number of uninsured americans and premium costs. what did the cbo estimate? >> we estimate that after ten years the number of people covered with insurance will be reduced by about -- will be down by about 13 million people, relative to the baseline. and that premiums would be about -- and exchanges would be
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about 10% higher at the end of that time period. >> and what about the administration's decision to end cost-sharing reduction payments, the aca outreach budget by 90%, allow work requirements for medicaid, were those part of that calculation as well? >> no, no. we've treated the cost-sharing reductions actually as an entitlement. so at least so far, until we get other direction from the budget committee. so since it was an entitlement. it wasn't affected. >> beyond the tax bill, how does the cbo account for the administrative action that changed the implementation of the aca? is that a consideration as well? >> it is. that's one of the more difficult things sometimes to estimate. it was with the aca because there was a great deal that had to be done to implement the aca. and we had to make some assumptions about how it would
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be implemented, how well it would be implemented. and, you know, clearly some of that didn't happen so well. and so we've update -- we update every year, we update our estimate of the operations of the exchanges and that sort of thing to take that into account. >> was there consideration of the fact that there was reduction in the amount of publicity, of telling people about it, a shortening of the enrollment period, was that part of the calculation? >> it will be. it's been a while since we updated it. we'll do that this spring, we'll talk about that and see if we think that's having some really solid impact that we can measure. >> thank you. is the cbo updating scores of other health legislation following the passage of the tax bill and the c.h. i.p. reauthorization? >> yeah, there are some proposals out there. we would -- if we're working anything, it might be technical assistance in which case i can't talk about it.
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but if we're asked to update any of those by the committee of jurisdiction, we'll do an update on those. >> so you initiate, or are you always responsive to inquiries from the congress? >> we don't initiate very much at all. we respond. >> and that goes for the administration as well? or is it -- no, i'm talking about looking into acts of the administration, executive orders, et cetera. >> okay, sure. no, we actually -- every year we go down and look to see if there's been changes in implementation, whether it's executive orders or et cetera that are going to have a big enough impact to change our baseline, and we will change our baseline if we see those. we'll try to detail it in our budget outlook report. >> i appreciate your work, and i yield back. >> thank you, ms. schakowsky. go now to georgia, mr. ferguson. the witness is yours. >> thank you, mr. chairman. dr. hall, thank you. and i want to thank you for
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taking time to come to my office. i have taken you up on that offer. i would encourage other members of the committee to spend time with you and your staff in their offices, or in your office, really talking about the process. i want to thank you for the direct and candid responses that you gave me. i found it helpful and look forward to continuing that. one of the things i want to go to, i want to get back to process here. if you could go back and pick a five-year window in the budget process. it doesn't matter to me where it is. go back 10 years, 12 years, 15 years. and look at the estimates that you made in year one, and what they actually turned out to be ten years later. and do that to the second year, and go out another ten years, and third year, and all the way out year five. what's the accuracy at the ten-year mark? when we're making a decision on
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budget, we're making it on this ten-year budget window. so if you go back historically, what's the accuracy at ten years from the date that this budget committee acted on those recommendations? or those assumptions. >> this past year we looked at our record for estimating outlays. it's in kind of broadish categories. it gives you an idea of the average error. we looked at it at the budget year and then we looked at it six years down the road rather than ten years down the road. after six years, our average error was about 3%. >> 3%. >> 3%. that means for individual smaller parts, some could be higher or some lower, but they averaged out to be about 3% error. >> we're making decisions on a ten-year window. >> right. >> which is where it becomes harder and harder the further you go out to predict. correct? >> maybe when we update this
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report we'll consider trying to do it for a little bit longer. >> let me say, i would encourage you to do that. because i think it's important, if we're going to make decisions based on a ten-year assumption it does us little good to have six years worth of historical data. that's kind of -- we're missing a significant portion of the equation in doing that. so when you look at it, and you look at the results during that window, what tools do you need to get -- to close that gap so that you can become -- because 3% may not sound like a big number. but, you know, when you've got a $4 trillion budget hanging around, that's a pretty big number. >> right. >> what do you need to be more accurate in that? >> that's a good question. we have a lot of challenges. one of which is that we have so much more work than we can handle. but that's not really an issue of being able to just throw resources at it.
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we suffer from a real peak load problem. when health care gets popular, our poor health care -- they're not poor, because they energized by this. they're working full-time. >> can you talk very briefly about maybe developing, or should we consider developing a new model for scoring that maybe -- you know, we're in this debate right now, demand side versus supply side. you know, you've heard it here today. but, you know, do we need to look more at what the private sector does using predictive algorithms to anticipate changing consumer behavior? i think the private sector does that in a very, very effective way. should we look at doing that more here or your office to give us a better outlook? >> we could. we really do look to research and we do try to talk to private sector folks. so, you know, we can continue to
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make an effort to sort of see how we can improve our accuracy by talking with other people like the private sector who does similar sort of work. >> i think it would be important that we look at -- two things i want to push on this. again, i think we need to look at the ten-year accuracy. okay, if we're going to operate in a ten-year budget window, we need that ten-year data. that's important. we need to see what those outlying years are actually like. and then to look at -- look at different modeling programs that use predictive algorithms to look at consumer behavior, and how that may change these budget outlooks. the final question i want to ask you, it's something when the gentleman from pennsylvania smoke, mr. smucker, asking about your hiring process, and you said we try to get people with opposing views. define the view and the opposing view. >> sure. by that i don't mean in our hiring, but in our consultations with folks. if it's a topic where we know in
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the literature there's some debate in the literature. this has a big effect, this has a small effect, they focus on different things, that's the sort of thing we'll look at. our real goal is to represent the state of research on a topic. and, you know, sometimes there's not full consensus on a research topic. so that's where we look for that sort of diversity. >> so the view would be process by -- you would have a demand side view and a supply side view? i know that's a broad -- >> yeah, it would be something like that, that's right, that's right. >> okay, thank you. mr. chairman, i yield back. >> i thank the gentleman. let's go to ohio, mr. johnson. should be noted that the ranking member has agreed to allow us to take care of the people in the queue before we go to him. mr. johnson, the floor is yours. >> thank you very much. >> thank you very much. again, congratulations on your chairmanship. this is your first hearing and i think it's a good one. dr. hall, i too want to echo my thanks for you and your team coming by my office and having
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the meeting a few weeks ago that we did. i really don't know how to frame this question that i have. but i've heard you say a couple of times in your testimony, you know, we use this model for this, we use that model for that. it seems to me that there's an element of science and an element of art in the work that you guys are doing. that there is an element of subjectivity and objectivity. some fact, some assumption and speculation. i'm a pretty simple minded guy. is there not a way to develop a scoring methodology that applies
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to everything, so that members and their staffs understand -- i mean, we have talked extensively here about the need for budget reforms. here about the need for budget reforms because we've got a budgeting process that doesn't work. we've got an appropriation process that fails us year after year, not for lack of intent, but process. seems to me it would be a lot easier to address some of our budgeting and fiscal concerns if we had more clarity and understanding around the methodology. is there not a way to develop a methodology, the methodology to score legislation to -- so that members and the american people
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can understand what we're potentially getting ourselves into? >> we're certainly willing to talk about ideas that you have and one of the things that we have coming out, i've talked about documenting models. well, we are also trying to document our processes. we actually have a document coming out saying here's the process that we go through in creating a cost estimate. so you see all of the steps and here's what we do and that's a transparency thing so we can at least see exactly what we do in the process and undergo and it gives you ideas on how we can do that differently or how we could articulate the results differently. >> a follow-on question. you just said, developing a cost estimate. a cost estimate is not the only thing that we need. we need to understand the long-term implications on the cost side certainly, but on all
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of the other unintended or unplanned consequences of legislation. >> right. so how do we -- how do we get to that part of it so that we have a clear picture of what legislation's going to do and not just the cost, but -- long term? i think when we do cost estimates, in fact, we were just talking about this a little bit. we have, you know, we have arc rassy. how much time do we have until it's a comfortable result. how much time do we need to get time to do it and provide transparency. those are three things that conflict with each other quite a lot. i always thought on eye always think that the more time we have on an estimate to be able to do
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the work and be able to do it carefully, the better our estimate is and the more precise we can make it. and in business you look at three factors, you look at time, and your money and quality because you can get two of those in that pyramid, but you can't get all three of them at the same time. higher quality will cost you more and it will take more time. if you want to cut time you will sacrifice quality or you're going to spend more money. you've mentioned a couple of times, at least i heard it once and you just alluded to it there taking more time and you said earlier that we have more work than you can handle. what drives that? i mean, the cbo is the organization that we go to to get these things scored and it's a critical part of what we do and as my colleague from georgia mentioned earlier, the politics
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of it is crazy in today's 24-hour a day news cycle. why do you have more work than you can handle? is it a resource problem? is it a time problem? is it a training problem? >> ten seconds to answer. >> what is it? >> ten seconds. >> i'd say the big issue is so little of our work is getting a piece of legislation handed to us and say score this. so much of it is having idea rs and helping -- helping committee staff think through things. one of the things that we should think about in this piece of legislation, that technical assistance takes up just a ton of our time, but it seems to be really valuable and there is a reason to come to us to help with that. >> mr. chairman, i do yield back and i apologize for running over. that's an issue that we've got to address, i believe, as we talk about budget reforms and oversight of cbo. there's got to be a clear understanding of the process and what they're doing and how much
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time they take to do it and whether they have the resources to do it or not because it has such serious implications to the work we have here. >> that's what the oversight hearings are about and we'll have three or four of these. more to come. the gentleman from indiana? >> i thank the chair, congratulations. great hearing. dr. hall, i want to thank you and your staff, particularly your staff that are responsive particularly when there are things going on and i remember the health care bill last year that we were able to work out some medicaid issues. really in the fast lane on that and i appreciate the responsiveness. having said all that, when you talk about technical assistance, what percentage of your staff's work is on technical assistance is given to committee staff or committees versus personal offices? >> most of it is committees. that's absolutely true, but when we do have personal staff it tends to be technical help
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because the individual staff, they -- i'm sorry, individual members, they don't have legislation that's at a committee so it's not typically a formal estimate. >> what percentage of your staff's time is used with personal. >> we'd have to look into it. we probably do 250, 400 informal estimates. >> i appreciate that. as we go through this debate, understand where you're spending your time. you talk about behavioral assumptions and how you looked at available literature and you offered the -- a member of congress to submit literature if the estimate or the scoring came back and it was not what was expected or assumed order anything like that, is there a procedure for a member of congress to submit literature as they submit the bill for scoring to you? >> i appreciate that question because that's one of the things that we do when we get some legislation. we ask the committee staff,
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whoever gave it to us is there some data you want us to look at? is there some research you would like to see? >> you were not made to wait until we receive the scoring. >> we want to make sure that we know what you're thinking of. >> i appreciate that, when you talk about the economic advisers, and i want to focus on that process a little bit. you say you use these economic advisers to multiply, quote, unquote, your ability to understand what's going on in the world. how, is there objective methodology you use in selecting these people? >> no, to be honest, it's a director's choice to look at the make up of the committee and think about whether we want strength in one area or another area and to think about whether we have the right kind of balance. >> how do you ensure absent any criteria or objective methodology and how you're not creating an echo chamber for
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yourself and your organization. >> best i can say is we put the names of everybody up on the website and we can take a look through the panel. >> i've been looking and honestly, while i can determine perhaps some of their natural bias or professional bias based on the organization they represent or work for. i don't know any of them personally, i have not peer reviewed their published work. have you or is there any methodology or criteria that would work to ensure you have a mix of economic ideology and theory is that sort of thing? >> absolutely. we do look through their work. >> i asked if there was objective methodology and you responded and say it's kind of a director's pick and we want to make sure that in your mind if it looks great and is there any criteria or process that your organization goes through? this is one of the reasons why
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we have technically capable people at cbo because they keep up with literature and read the literature. we get people on the panel and we expect them to be technically capable and to be objective in their advice on things just like we try to be objective in our working, as well. >> you understand, sir. if you don't have an objective methodology and you have a published criteria, you risk at least the attack if not the reality that you're creating an echo chamber and if you're informing your work to members of congress then you might intentionally create a bias that might cause some of this tension we might be seeing from time to time on a given bill. my suggestion to you is let's help make this process more transparent and at least name the people on the website. let's create and agree on on a bipartisan way a published set of criteria or methodology to select these people, if in fact, they're informing your work to
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such a degree. >> i mention those folks because they help keep us balanced and we make our own decisions and we make our own judgments and we help inform our own judgments and i don't want to suggest that they're making decisions for us. >> i'm not suggesting that in my questioning. my time is up, but the point is you brought up this panel up as a way to inform your work which i think is healthy assuming that that panel is healthy. i yield back. >> thank you. >> mr. brat, virginia? >> thank you for holding this hearing. thank you, dr. hall, i want to get to you real quick and i used to be a liberal arts professor and sometimes what's missing in the city is the systematic connection between pieces of knowledge and so my friends over there as the nice democrat friend, and they're very smart and intelligence of the way they ask questions and we asked the chicago economist was asked does
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the tax bill for itself. you get into current law and current policy and then the key question is no one really cares about does the tax bill pay for itself. i care. does the economy pay for it? do all of our policies together pay for it? when you put in deregulation and some of those outcomes, as well. so that's what i found missing and the score is at the federal level only. it doesn't include state and local impacts, right? which also has a huge impact. state and local revenues is 40% of federal and when you abstract away from this, it becomes politically misleading. you've been asked a narrow question. does it pay for itself when you score it? how do we get at truth and its totality to avoid the politics and i do want a truthful outcome. when i'm making decisions on that question, how do you think about that quickly? >> sure. >> i think it's one of my points is we adapt to what congress
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wants. if there's something different that you want that we can do we're happy to talk with you and try to work it out. >> then it's on us. i'm interested in that because if you look at the fed, the fed forecasting which is horrendous after the 'on 8 recession and it never got there, and there's systematic bias for eight years in a row. you've got a problem when you can guess the direction of the error year after year after year. >> the second big issue that's coming our way in terms of you had the budget debate and the csr bailouts, subsidies, et cetera. what is the assumption of cbo on the score there? president trump ended the csr payments and how is that going to be scored as if he's ending them or as if he's continuing them? we've been treating it as an entitlement and unless we get direction to do something different. >> okay. we're assuming essentially that the money will be found
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somewhere because it's an entitlement. >> right. that brings us back to the health care debate and the score there again, i just don't feel that we have a systematic account in charlottesville. we have the highest rate quotes in the country. $39,000 all in before the family of four on the individual side gets to access insurance. that's not sustainable. and so we would love your economists to say, hey, the way you're going, the economics are not sustainable for health care in addition to showing us the merits of technical bills and the big programs, too. medicare, social security. i'll just add one other piece that's interesting to me. lately immigration is a huge issue coming our way. we're all debating that. have you guys done any scoring on the total cost of illegal immigration yet? >> no. no, we haven't. >> so that's -- how do we get these folks to preempt.
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these studies take long periods of time to do. and so it's a major issue on the -- so that's just our -- can i request that or at what level will the request be acted on. >> i would be happy to talk to our folks and talk about how our take on the literature and what it says about immigration and the effects and give you an idea of where we see things in the moment and whether or not you want us to do some work. >> right. i don't want to get political, but, and it is pretty well known in academia. i came from a small liberal arts college, et cetera, and you can look around the country and who they donate to, and if you go to harvard and yale and princeton where the overwhelming political -- and it's not bad. it's a free country and you can be in any party you want, but if you don't have any economist on
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the faculty who voted for the current president of the united states, you might call that bias, right? in a certain sense, and so we're trying to get at and that includes a bernie populist thing over on the left that ran through the country, and i'm just curious your response. how do we track that? >> let me give you an example of the challenge and when we look at the effects of minimum wage. >> yep. >> ton of lit rach oerature on ma minimum wage. >> sorting through the research and what was good research, solid research and wasn't. >> yep. >> and called that down. >> right. >> and focused on things and it was the actual work that we tried to focus on. >> right. >> that was really what got us down to where we had somewhere to go and i think that's sort of how i think about the people we talk to. we let their research speak for them. >> right. right. it -- what is somewhat missing is the normative aspects of
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economic, right? we try to abtract and act like we're doing objective, you know, social science when it's very hard to come by that. am i already over? i thought i had 28 left. mr. chairman, thank you very much for running the hearing and thank you very much for being here. >> thank you, mr. brat, for your commentary. we have two that have joined the deus. miss jackson-lee, are you prepared? miss jackson-lee from texas. >> thank you. congratulations to your position and the ranking member, thank you for this important hearing. to dr. hall, thank you so very much for your patriotic service to this nation. i was just in the judiciary committee voting on the need for transparency and to view something called the nunes memo and the underlying materials and as much as my colleagues on the other side of the aisle have chosen in certain committees to issue statements without facts.
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is it the role and the mission of the cbo to present whatever they present on the basis of facts? >> absolutely. >> i recall being here in 1997 and in actuality it was the budget resolution in 1997 that created the children's health insurance program. i'm not sure if you were on staff or if you might be aware of that, but good things can come out of a budget resolution. we've offered to save lives and let me for a moment just to create the atmosphere very quickly. unlike in a dictatorship or autocracy where the king is law and the constitutional democracy, such as the law is king and the health of the constitutional democracy not by the physical health, and the vitality and robustness, strength and resilience of the critical institutions. the president began this term in office and he learned that the fbi was investigating this russian interference with the elections and whether the trump campaign personnel was involved
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and the president tried to coerce the personal arc ladies and gentlemenance of fbi director comey to secure that he fired him. special counsel mueller was appointed to take and oversee the russia-trump investigation that the president and his republicans in congress began a campaign that continues to this day of disparaging and trying to discredit and here we are now looking at an institution that since 1974 has in a non-partisan manner done the work that it should do and we are being disparaged and litmus tests and who voted for whom. i would ask a question, as you look at talented analysts and others with phds and masters, do you ask them to show you the voter registration card? >> absolutely not. >> and since we don't have registration parties or at least they're not in my state in techs te texas, do you ask them what political party they're? >> absolutely not.
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>> teams are called together of expertise and they're analyzing in that discussion, do you ask who you voted for for president of the united states? >> no. >> would that be the appropriate guide in which you make your determinations for the very important work that you're doing? >> absolutely want. so let me proceed on this. is this a document that you have produced? >> yes. >> ten things to know about the cbo. >> lawmakers created cbo to give the congress a strongest role in budget matters. is this a political statement? >> i hope not. did you intend it to be a political statement? i did not. the congress said the cbo priority ands do you intend that to be a political statement. >> i ask unanimous consent to put this statement of the cbo into the record. without objection. >> thank you. >> let me ask specifically points. the recent tax bill made changes to the tax code that would have wide-ranging impacts on the budget and the economy. can you walk us through how you
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build that into your baseline, and i know my time is short and i'll abbreviate. let me give you this other one and what is the cbo of the recent tax bill on the deficit and do you do this in a non-partisan way. the third question, would you explain why the extension change after the enactment of the tax bill? >> the process, the actual tax bill itself was scored by the joint committee in taxation. we are required to take their estimate and put it into the estimate, but when we do the baseline which we're work on right now -- >> may i pause you for a moment because of my time. i can get that in writing? >> sure. >> let me jump to this question. is this tax deficit going to have an impact on the budgeting process of the united states?
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>> the tax being passed, creating a $1.3 trillion tax cut? >> it will likely change the forecast for the next ten years or 30 years. >> and impact government, as well? >> the deficit tax bill will impact it. let me ask you this. you talked about the question of the aging population and full employment or the opportunity for people to work increasing the engine of the economy. so suppose to speculate dreamers were able to work or younger population. does that drive the economy? >> the effect of any of those things on the labor supply is part of our analysis. >> so all of that plays into it? >> yes. and you make the analysis fairly without any attention to political yeas or nas. >> i thank you. with that i yield back. >> thank you miss jackson-lee. mr. grossman? >> thank you, sir. i was at a couple of other meetings first, but i decided to save the best for last. >> understood. >> i'll give you a couple of
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questions off the top and i don't know if this has been asked already. what time every year do you come out with estimates as far as future revenues or future revenue estimates? >> we do our first baseline analysis typically around this type of the year and we'll be delayed because we're working in the tax bill. >> okay. i'd like to ask you because there's a feeling that business optimism may have changed or attitude towards government may have changed when president trump was elected. could you tell us right now what the receipts were? do you have the receipts from last year? the government income tax receipts. >> i don't have them in front of me, i'm afraid. >> are they available yet? >> if they are we can get them to you. >> okay. we'll go back. they probably are, i just don't -- we'll look at the third quarter. >> okay. do you have the receipts for the third quarter of 2017?
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>> i'm sure we do. >> whether those were higher or lower than your estimates were for the prior year? at the time you came out with an estimate? >> every quarter we produce a document that tells you how we're doing with the reaps. >> we don't know if they're above or below projections. >> i want to like you a lot, and that's usually a big deal. okay. you -- we'll switch gears and that amazes me. we'll switch gears a little bit and we asked a 9% to 10% increase in spending over last year, is that true? that's right. you're not alone in that and everyone thinks we're not spending enough money and i'm not going to single you out for
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that, and we're apparently right now spending substantially more than in president trump's last year, correct? than eight years ago. i'm sure that's true. given that substantial increase and i feel as things become more computerized and automated you should require less people, but you feel you need a substantially larger staff today than eight years ago. >> we're trying to respond to a congressional interest in speeding up some of our estimates and in providing more transparency and if we're going to do that we need more staff. >> you think congress is asking a lot more questions than they were eight years ago? maybe it is. your demand for your services is much greater now than it was eight years ago? >> i wasn't around eight years ago, but i'm sure it's true, actually. a lot of the transparency stuff is just not free. we have to take time to do that and something has to give. >> okay. you right now have 233 full-time
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employees, is that true? 233? >> and how many employees do you think you need to adequately do your job? >> i think we're fine doing our job now, if congress wants more from us we have a planned increase by three years that will enhance it. >> right now you feel inquisitive, congressmen, you are worried about the future? >> let me put it this way. since i've been in, we have way more work than we can do and we have to prioritize things. >> okay. >> one of the more frustrating things for me is dealing with individual members who want some of our time while at the same time we are working very hard all out on a similar work for a committee. >> do you think sometimes congressmen ask dumb questions?
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>> no, actually. >> in order to turn around stuff on a timely basis you feel you need 20 more people than you currently have and if you were given your rather substantial increase you would hire 20 new employees, is that what you would do with it? >> that's right. >> some of it is an increasing cost of doing business for us which includes the cost of living raises for people. when you don't get money for cost of living then you have to go down a couple of people. >> okay. >> those are all of the questions and i'll yield the remainder of my time. thank you. >> my ranking member has been very patient deferring, and i want to yield to the gentleman from kentucky, mr. armouth. >> it's been an interesting session and i've enjoyed the conversation. dr. hall, thank you for your testimony and your responses. they've been very cogent and i appreciate them, and i also want
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to add that i've been the beneficiary of visits from you and your team and they're very valuable and i've had the pleasure of coming to your place of business and your team is very impressive, as well. first of all, i want to mention, i think it was my friend mr. woodall who talked about not knowing and not having a sensitive bias of the leadership of the cbo and i will say in the six years that your predecessor was here when i never for an instant had an idea of what his personal bias was and i was pleased to find out after i left the position that he was pretty liberal and i will say i've never had one indication in listening to you or talking with you of what your personal bias may be, too. so i salute that. this is a totally rhetorical
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question, but have you ever done an analysis of the cost per piece of legislation, and it was enacted. >> we have it in large part because it varies so much. >> it can be a piece of legislation changed in the name of a building or something we've worked on for 18 months. >> right. just because mr. groveman asked the question, in this document that you provided, it says that in 2017 you did 740 reports. do you have any sense of how that has grown just within your tenure? yeah. we're probably a hundred or so above. in some respects it's misleading because so much of the work is on the technical assistance side. that if we wrote down the instances of technical assistance we are up to 10,000 of those to give you an idea.
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>> that will work. i think you were asked a question and you were responding about going back to the aca and the situation with the exchanges and you were cut off. would you want to continue to make that -- it was an explanation of what was happening in the exchanges and how that might relate to coverage and cost? >> one of the points i want to make is while i want to get an estimate of the exchanges correct, i wanted to get the budget impact correct and so we've actually written a little piece that goes through how that worked out for us and how accurate we were on the spending and on the subsidies and how accurate we were on the number of people who were uncovered and included the exchanges so it's a bit more of a complete look at things and one of the real challenges, of course, especially with the aca, implementation was such an important thing and we wind
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up -- we do what we can, but we wind up assuming that the immremation will be about average as the piece of legislation and that doesn't always happen. >> i don't want to spend too much time on health care, but i want to ask one question. one of the things we focused on was making sure that preventive care was a significant part of the agenda because we believed, those of us involved in that that preventive care has a significant benefit on the budget in reducing long-term health care costs. have you ever -- has the cbo to your knowledge ever done a score on the benefits of preventive care? >> yeah. the one that had the clearest sort of result was from the cigarette tax, and the cigarette tax there would be revenue generated from the tax and there would be revenues, if increased
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revenues with better health, that had a real impact. it had an odd -- in terms of spending it had an odd counter, right? because the cigarette tax would reduce the number of smokers and that would reduce the medicare spending and then people would live longer and that would increase government spending because they're living longer and there was an odd thing there that balanced out the spending which was an odd part of what we do sometimes. but inside the budget window that wouldn't be as great an impact, but in terms of pure preventive care, the ability to have check-ups without co-pays and so forth, has there ever been a score done on those types of initiatives? >> the tax one was really obvious. sometimes the preventive medicine stuff is hard because there's not as much evidence as
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we'd like to sort of base the analysis on and moving to another question. i was struck by this in many contexts. when cbo puts out a number and that gets used for political purposes and that is in concrete on the public's mind and has the cbo contemplated and this is a restriction that you can create a range of estimates so that first of all, you would know your error rate, but also it would -- it would not be something that is -- that people rely on for arguments when in fact nobody's going to be accurate exactly and the range might be more useful? >> well, it's a budget committee
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thing. the budget committee needs a point estimate. so we try to characterize uncertainty as best we can and that's hard to do. to be honest, so much uncertainty is unknown unknowns. can you walk us through the requirements that are either in stch out thstretch out how you have the baseline? >> there's quite a lot. for example, how we treat social security trust funds and et cetera. we're directed to assume that that pays out rather than the trust fund cuts off benefits, you know. when we forecast discretionary spending we aren't really forecasting it and we just put an inflation rate in and assume that. so most of those little rules
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are directed either through law or through the budget committee. >> that goes to mr. brad's comment about it's on us to actually deal with some of these. i just want to talk a little bit about something that i'm obsessed with and that's the pace of change in society and how that complicates a lot of policy making and not to speak of your role. i remember when secretary geithner used to come before the committee and one time i asked him and we were talking about 30 or 40-year-old projections and i asked him how reliable 30 or 40-year-old projections were, and he said i don't think any projection outside of five years is reliable and the pace of the world has quickened since then. i was reading the other day an interview that was done with the managing director of mercedes benz, and he had some unbelievably disruptive predictions about what was going to happen in various field, transportation, energy, education, the legal profession within the next ten years, and
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they are things that, for instance, the basically the cost of electricity and the cost of solar power going to virtually zero has huge implications, of an abolition of a huge percentage of the jobs that exist. we know about the possibility of 170,000 truck drivers losing their jobs because of self-driving vehicles. a lot of these things are happening and my question is is that the kind of futuristic thinking and is any of that done in the cbo? you don't have any on staff, but that might be helpful pip need them in congress, how about that? >> they're in unknown unknowns and we can look at things like
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productivity. productivity is ranged at 2 percentage points and how was that ranged, historicry and we can put that into the long-term forecast and we can vary those important variables but how they varied in the past ask give you some idea of what the direction you'red hadding and it doesn't give you the real outliars and it does give you an idea of what it means for our forecast. >> thank you witness again for your work, service and your appearance here today. i yield back. >> thank you. mr. armouth. >> i hope not to take all of my 10 minutes. i want to bring out a couple of questions. one, cbo has nine distinct divisions. when was the last time that there was any kind of a review of the organizational structure of cbo and how often do you
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assess the structure, if you will, of the organization? >> we certainly think about it. we've certainly had a little turnover in the heads of those divisions. i think more than half of them have -- we've been replaced over the last three years because of retirements and et cetera and when that happens we do think about that we have the right sort of organization and we think about that and we haven't give 10 thought because it works pretty well, we work in teams and our budget analyst from our product area and our program analysts and one thing we try to focus on and try to coordinate better. we sometimes our budget analysts are really different from our ph.d economists and we need to make sure that they listen to each other and work together
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because there's a tendency for them to be a part and that's part of our organization. >> but you're not afraid to get outside the box? >> no, no. not at all. >> okay. just a couple of words on joint committee on taxation. >> do you guys have a -- and i realize there on the floor right above you and they're probably watching so you have to be careful with your answer. do you have a really good relationship with him? is it a good collaborative relationship with him? >> i think so. i think so. we have pretty distinct, clear roles and they've been very patient about helping them review our stuff and we've worked well together, i thought, through the health care because of the health kacare estimates involve it. from time to time because of the makeup of your organization, are there discussions that go on between the -- this goes back to my collaborative question.
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are there times when your folks and cbo might think differently about something coming out of the joint committee on taxation and are they free to exchange those ideas in hopes of getting a little closer to the truth as we all want to know. >> i think so. the biggest room for improvement, frankly s that if we were more transparent with each other and i don't think we know a ton about their model and i know we know a ton about our model, but we do manage to work together, but i can't think of unstances where we did any sort of second guessing on what they've done. >> i wadon't want you to speak the joint committee on tax, but since the passing of the tax cut and jobs act there have been a number of companies and
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businesses, large and small, that have made significant decisions about how they're going to take this windfall, real or perceived and how it's going to impact downstream the people that work for them. bonuses, raising minimum wages and inputting more resources into the retirement plan and those kinds of things. does any of that, does the amount and i don't know but has the avalanche of this news coming out, has it surprised anybody in your organization? in the joint committee on tax? >> i know we've had discussions about it from our look at the forecast with the tax cut in it. and we've done looking back and seen how consistent is this with what we've seen with the initial
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reaction to the tax bill. i don't think we have anything that's been dramatically different than we expected, and hopefully we'll try to talk about that when we release the budget outlook. to be respectful of the time, the uk has a -- in their cbo equivalent and the office of budget responsibility where they take certain policy issues and they give some kind of a confidence factor to them regarding the data that is used and regarding the modelling that is used and the behavioral aspect of it and then they give a final grade to that. the cbo have something lookic that? i know you've spoken about how you look at your products from a
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confidence standpoint, but do you have a confidence factor built into it and have you considered using something like that and sharing that with the congress? >> yeah. i mean, our confidence and our uncertainty is sort of mixed into our work, but. >> it's an interesting idea. we have had some interactions with the british equivalent. i think it would be worth our time to take a look at what they do and see if we can get some good ideas from them. if it's something that you all think is valuable, we'd love to figure out how to do it. >> very good. >> dr. hall, thank you for appearing before this committee today and you can submit written questions, and those questions and those answers will be made part of the formal hearing record and any member who wishes to submit questions and any extraneous material for the
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record will do so within seven days and with that, this hearing stands adjourned.
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the u.s. economy added about 200,000 jobs in january and the unemployment rate remained at
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4.1%, that is the lowest unemployment rate since the year 2000 and those numbers were released by the bureau of labor statist beings th statistics this morning. >> for nearly 20 years in depth on book tv has featured the best known non-fiction writers for live conversations about their books. this year as a special project we are featuring best-selling fiction writers for the monthly program in-depth fiction edition. join us live sunday at noon eastern with kocolson whitehead author of "the underground ra railroad" and his other includes "the intuitionist" with author colson whitehead, sunday from noon to 3:00 p.m. eastern on book tv on c-span2.
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>>. >> sunday night on "q & a," author bill james talks about his book the man from the train in which he investigates one of the deadliest serial killers in american history. >> many of the crimes happen within 100 yards of the railroad track and one of the things that helps us identify his crime as opposed to somebody else's is that it usually happens at the intersection of two railroad tracks. the -- and it's at the intersection of two railroad tracks presumably because he knew he had to get out after he committed his crime he had to get out of town before dawn and he didn't want to be stranded there waiting for a train to come through that he can hop on. so being at the intersection of multiple railroad tracks gave him the opportunities to get out of town before the crime was discovered. >> sunday night at 8:00 eastern on c-span's q & a. >> maryland


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