tv CBO Director Testifies Before House Budget Panel CSPAN February 4, 2018 2:39am-5:16am EST
morning, we are live in jackson, mississippi, for the next up on the c-span 50 capitals tour. the mississippi attorney general will be our guest. >> this past week on capitol congressional budget office director keith hall ofponded to allegations favoritism. this is two and half hours. [gavel pound] >> it is 10:00. good morning.
the hearing will come to order. welcome to the committee on the budget hearing on oversight of the congressional budget up as. cbo'searing will focus on organizational and operational structure. the goal of today's hearing is to learn more about cbo, which was created as part of the budgeting and an pound meant act of 1974. for decades, this organization's primary function in duty has been to assist congress by providing cost estimates, economic analysis, working papers, and other publications. members of the house and senate budget committee rely on cbo as an objective and partial -- impartial resource for
budgeting. it also plays a key role in advising the committee is it enforces budget roles. without question, there are dozens of feynman and women employed by cbo including analysts, management, and support staff. for more than 40 years since its founding, congress has not undertaken a conference of review of cbo's structure and processes. it is still under its original permanent authorization. alarmthis not to raise about the future of cbo are question congresses need for it. it is simply a fact that serious oversight has not been exercised to make sure it has the tools it needs. that being said, our intention is the same. we want to better understand how cbo carries out its nonpartisan mission. during today's hearing, we'll take a closer look at the
organizational operation including its staffing, .ssumptions, and work processes to provide an overview in how it has evolved i am pleased to welcome dr. keith hall. as director since i want to stress this series of hearings is not designed to be partisan or invite cheap shots. legitimate questions about how cbo operates. i am hopeful these hearings will shed light on how we can improve and provide congress when it needs in the 21st century to ensure cbo's can effectively end efficiently carry out its
mission. where going to carry out a review through these hearings and i look forward to a productive conversation with dr. hall. ifore yield to my colleague will remind everyone this committee will strictly enforce the five-minute role. i'm a military guy. ship and iun a tight want to ensure our hearings are as productive as possible. so i will ask the remarks and questions are delivered with enough time for our witness to respond. answers will be submitted for the record and i will hold my colleagues and myself to this role. to a an advance. i look forward to a productive hearing. gentlemand to the from kentucky for his remarks.
and congratulations on your new role. i look forward to, would go with you. and thank you for calling this hearing. all of us on the budget committee take our over site role seriously. and i'm very glad that 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 t director hall, thank you for your testimony in advance, and thank you for your service. congress created a congressional budget office to give us an independent pan reliable source of budgetary information and expertise. for more than 40 years, cbo has full fiduciary its mission, providing impartial, high quality analysis to inform decision making it and improve the ability to protect the power of the purse. while everyone here is aware director hall was appointed by a congressional republicans, expectations have always been
that the cbo director will car oi out his or her responsibilities without allegiance 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 best analysis regardless of any desired outcome for administration, majority in congress or the congressional minority. despite that committed mtd to object tift, however, cbo 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. direct director hall, i do not envy you, you have the most thank less job in washington, to be objective referee, coming from basketball team i know how loved the referees are. you'll questioned by one side or the other. one day republicans, other day democrats. that has been reality in
congress since cbo inception. but dramatic shift in the treatment of cbo as members of committee this should be deeply troubling for us all. many have crossed the line. and much of this friction seems to center on analysis of my republican efforts to repeal the affordable care act. look, i get it, particularly when there is no viable plan for replacement. but i'm not sure what you thought cbo's analysis would show. the affordable care act expanded coverage requiring insurance companies to make meaningful 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 end subsidies that help families afford insurance,
people lose coverage. if you take consumer protections and allow this, and people lose coverage. there is no way around the fact that repealing the affordable care act will result in millions of american families losing health 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. 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 fort cohcom in answering questions. 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 information that tells us only what we want to hear. but that does not lead to sound policy. cbo does not exist to give us
the information we want to hear. it's job is to give us the information we need to make informed responsible decisions. so one of the few institutions in washington serves that role. tax on the cbo aren't just tax on director hall and staff. they are tax on our integrity as deliver tive body. they reduce stress in government and undermine the standards on which a functioning democracy depends. today i hope 20 hear from you dr. hall how you ensure your work is objective and stemgs you've taken to increase transparency. i would like to learn more about your expert staff technical capabilities and any need for additional funding or tools. you'll likely to hear from us disagreements about your methodologies. i think some mr. challenge you. i think that's all fair game and i look forward to that discussion. thank you for your leadership at cbo and for testifying today. i yield back. >> thank you, mr. yar man. >> 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. thank you for your time today. let me just say from a personal standpoint how enjoyable it was yesterday to visit lt 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. you have ten minutes to deliver your oral remarks. and the floor is yours. thank you, sir. >> chairman, ranking members, thank you for inviting me to testify this morning. and thank you for your support and guidance. we at cbo have long relied on the bucket committees to explain our roles to others inening could. we also rely on you to provide construct stiff feedback and guidance on congress 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 then i look forward to talking with you how we can serve congress better. first, lawmakers created cbo to give the congress a stronger role in budget matters. cbo was established under the congressional budget act of 1974 to provide objective, nonpartisan information that would support the budget process. cbo's mission is to help the congress make effective budget and economic policy. in carrying out that mission the agency office 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 under the budget act is to help the budget committees with matters under their jurisdiction. also supports other committees particularly the appropriations, ways and means, and finance committees and leerd ship.
among cbo stat or i requirements is producing certain reports best known of which is automatic budget and kmeek outlook. that report includes cbo baseline budgetary projections. cbo is also required by law to produce a formal cost estimate for nearly every bill approved by a full committee of either house or senate. those cost estimates are only advisory. they can but do not have to be used by to enforce budgetary rules or targets. moreover, cbo does not enforce such bug tarry rules, the budget committees do. third, cbo produces a lot of work each year. for example, last year the agency published 740 formal cost estimates. provided technical assistance to congressional staff. as they developed literally thousands of legislative proposals and amendments. and published many reports about the budget, economy, and many issues. nevertheless because of limited resources number of estimates and an analyses that cbo falls
short of congressional requests. moreover, we must balance our commitment to respond quickly to the congress with our professional responsibility to release estimates only when kwaumt 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 expertise is in the area of health. other areas of focus include national security, labor, taxes, energy and macro economics. maintaining a broader array of expertise policy needs quickly. analysts are organized a number of divisions but much much cbo requires work for more than one division. cbo analysts also pursue high quality and accuracy. approach issues with detailed understanding of the federal programs and tax code. carefully read the relevant
literature. and painstakingly analyze information. and diverse range of outside experts, including professors, and lists at think attention, representatives of industry goups, and government employees at the federal, state and local levels. some of the consultations occur during periodic meetings with cbo panel of economic advisers and panel of health advisers. fifth, cbo analysis is objective and nonpartisan. maintain objectivity in a number of ways. one is that we make no policy recommendations. another is we hire people on basis of their expertise. nearly 80% of cbo employees have advanced degrees. and without regard to political affiliation. we carefully consider whether potential analysis regardless of their owner personal views, and we enforce strict rules to
prevent employees from having financial conflicts of interest and limit their political activities. we aim to reflect the full range of 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 within the goal of possible outcomes. six, they do not do estimates, cbo does. cbo estimates often require projections how institutions and people would respond to proposed changes in law. computer mod sell one tool that analysts may use to make a projection. various kinds of models such as complex regreks and calculation in spread sheets. cbo models are constantly being enriched and improved. nonetheless models can often not show the full scope of legislative proposal. they must go further so they see the estimates correspond as quickly as possible to what the
available research suggests. seven, cbo has vigorous system of checks and balances. all of the cost estimates and reports are reviewed internally for objectivity, and clarity. that process involves many people at various levels in the agency. analy analysts consultations hear all perspectives on issue. we continually revits our past works and projections and actual outcomes. we also compare our analysis to others work and incorporate outside feedback into our projects. eighth, they have transparency. to begin with, cbo cost estimates and publications, in addition we document the estimates. we report on the accuracy of our projections, including economy, spending, revenues and health insurance subsidies. we public analysis of how
sensitive they are and seek external review of reports before released and methods in which the products are based. we also transparency broad access. when cbo completes a formal cost estimate made immediately available to all members of congress, their staff, and the public, on cbo's website. furthermore, cbo analyst regularly explain to staff. for instance earlier this months in collaboration with the research service, my colleagues gave presentation to 150 staff members about how cbo estimates of health insurance costs and coverage. unfortunately the pace of congressional action sometimes limits the time available for providing extensive explanation of estimates. and because the demand is high, resources are constrained, we need to balance requests to explain more about analysis with requests for new analysis and other responsibilities such as regularly updating our baseline projections.
ninth, cbo evolves as needs of congress evolve. though cbo has remained true, we work with the congress in ways probably not envisioned when the agency was first created. for example, as legislation has drawn more complex, we found ourselves spending more time providing preliminary analysis and technical assistance during the drafting stage. and we are being asked more often to prepare cost estimates for bills that are heading for votes without being marked up by committees first. to accommodate the congress's needs and agenda, cbo shifts staff and develops new analytical tools. for example, developed significant resources to identify health care issues so we would be prepared for large scale legislative proposals on that front. similarly, improved our capability to effect the economy. tenth, cbo is always looking for ways to do things better. reviewing every aspect of
simulation model of health care coverage, federal health care spending for people younger than 65. in addition, we will do t- analyst how changes in federal regulations effect the budget. tran par antsy are top priorities of mine. and cbo has plans to bolster further. we will increase the public documentation of our computer models. also do more to explain how analysts employ models while producing estimates. as always, we'll look for ways to serve you better. i welcome your suggestions. >> thank you, doctor hall for your opening remarks. look forward to the questions. the chair expects to be here for
the entire did youration of the hearing and as such i'm going to defer my time until later in the sequence of q&a. so i'll be yielding first to our members who i know are on a tough time clock today because of the number of things that have been crammed into one day. the fact that the republican retreat begins tomorrow. so i'll withhold my questions at the present moment and use those as we clean up the hearing at the end. now i yield to my friend the ranking member from kentucky. >> thank you, mr. chairman i intend to do the same thing. i'll sit until the bitter end with you. thanks. >> for the first round of questions go to my friend from oklahoma, mr. cole. >> thank you. i want to thank you you for the hearing. i know my good friend former chairman wanted do as well. and it's important for us to do. and i want to begin by thank you you dr. hall and your staff. i dealt with a lot of cbo
directors since i've been on this committee, and it's been curtis and professional. 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. there is one area that i want to ask about. and, you know, 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 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, when 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 mean i'm not arguing for or against the affordable care act. i can just tell you politically in my state that's just not going to happen. there was no way it was evergoing to become a medicaid expansion state. population was heavily opposed. just politically was not feasible. and frankly the state didn't have money for 10% match at the time. so literally in that model of how many people would lose insurance a bunch of people that don't have it now in the state of oklahoma, would not get it because you would not have medicate expansion, so therefore couldn't lose it. so walk 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? we shouldn't be making the final decision. you should. but just a way in which you have more input back and forth between members and the institution which is here to serve them. >> well, thank you 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 expanding. then when that was overturned, we have of course, we didn't anticipate that. now we're into an area where we now have to sort of predict how many state also voluntarily expand and not expand.
i think right now enough states have expanded that 50% would be eligible. we could see it going up to 70%. it's much lower than all the states and that's a tricky thing. what we've done is looked at states, their past behavior, looked at how they've taken federal money in the past and sort of put them into categories. buckets, if you will. from those buckets we assign some sort of probability that they will expand at some point over the next ten years. what that means, then, is that although we've put states in the buckets, state a could be in a different bucket, in reality, and state b could be moved back to that other bucket in reality.
we then calculate the population in those three buckets and put some probabilities on that. >> i'm not going to ask an additional question. my time is limited here. but please tell us who made these decisions and is there any political dimension? they give you a pretty good opinion reserving the right for you to make the decision. >> we decide what are the things that could influence whether state expands or not. using that to sort of, i say, put them in the buckets. we work that out with consultation with folks. i had a briefing, talking about how that was done, that sort of thing. i don't know exactly who we wound up talking with. we probably talked to some state insurance company. >> i don't want to be the first
guy the chairman chastises for running over time. thank you very much. >> okay. >> thank you, mr. chairman and our ranking member for this hearing and also thank you, director hall, for being with us today. today's hearing gives us an opportunity, really, to discuss how important cbo's impartial analysis is to congress and the american people. i would like to reiterate the fact that congress created cbo so we could have informed and it wasn't created so republicans or democrats could smear the cbo's nonpartisan analysis because we don't like cbo scores. last year, director hall, and ranking member mentioned the aca. weeks were spent attacking your
score of their terrible aca repeal bill they found it ridiculous when speaker ryan jammed through an updated repeal bill without a score in may. can you just explain how your organization 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 order to ensure that these attacks no longer happen? what is it you think we could do to make sure your job could be accomplished without the partisan attacks? >> things like the oversight hearing are really helpful for us. one thing i wish we were able to
do more is come to visit individual offices and make presentations on things. i've never turned that down but in hindsight i think i would push into offices more when somebody wants to know where we got the numbers and what we were thinking. on the aca repeal bill there were various versions of that but some things were kind of clear, right? the -- there were aspects of it that essentially were reducing subsidies for people. reducing medicaid, eliminate the mandate. those are all things that are going to work to lower the coverage relative to our baseline. even saying those things without modeling it, i think you're talking about a decline of tens of millions of people from coverage without the modeling. and we spent a lot of time doing
things very carefully. and our best estimate on the final bill was something like 23 million person decline in coverage overall. but involved actually a very long process. there were 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, use models looking at interaction with medicare. we had to use a tax model, joint committee and taxation. it was a very complicated process. i can't do it justice here but we did make a presentation that i mentioned to the -- at the congressional research, doing exactly what we did to get to that estimate. i can make those notes available to you. we can think about doing another presentation if folks want to hear it. >> so, do you think it's the process that appeared flawed by those who attacked this or do you think it was the outcome of your analysis that was not
liked? >> you know, 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. >> okay. and also, i have a few more minutes. i just want to ask you about the trump administration and their criticism of the cbo. i remember they had indicated their budget would kick off a 3% growth. and end the deficit in ten years and cbo found it would do no such thing. instead of, i think it was, boosting growth. instead you came up with 1.8% or 1.9%. is it the process or outcome that the administration believes was not accurate?
>> this is part of the value of cbo. we did our own analysis. we looked at a lot of at a tima. we're very, very carefully about that. we published our budget outlook and have a lot of detail about how we get to our economic forecast and how that affects our budget forecast. we're very transparent about that. >> thank you. >> thank you, miss lee. gentleman from georgia. >> thank you very much, mr. chairman. thank you for holding the hearing today. i'm reading from the washington post they said if you're already bored with the state of the union, tune into what we're dubbing as republicans versus the congressional budget office. 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 the budget committee was created to give congress a stronger role and under original legislation, you were to be the staff of the budget committee, joint, shared staff between the house budget committee and senate budget committee. isn't that the original incarnation of the cbo? >> i'm not sure what the original intent was but that characterization is right. we're here only to assist the budget committees invest to congress. >> my reading of history tells me the senate found it beneath them to share a staff with the house budget committee. once they insisted on having their own staff, we insisted on having our own staff and you were left to advise us both there on the side.
my experience, you talk about hiring people irrespective of political outlook. i think that's very challenging to do. my experience with cbo directors, i tend to learn more about their politics after they're gone than while they're there. we see a lot in hindsight. i look at -- i'm reading from a cbo cost estimate of the american health care act. the top line says this. cbo and jct estimate enacting health care act would reduce federal deficits by over $19 billion and $23 million in 2026 current law. >> yes. >> you could have said we're going to increase health care freedom for 12 million people now between 2026 relative to current law. you could have said we're going to expand the choices that the american people have and repeal the mandates in their life every
single sentence has a political flavor to it, has a -- you rightly describe your role as score keeper but because words have meaning, every single line takes on a political connotation. how do we scrub to prevent that? specifically, for example, did folks talk about describing the american health care act in health care freedom terms instead of people lose insurance because they decide it's not right for them so they leave it on their own volition? >> i respectfully disagree that our language at all was political. one of the things we tried very hard to do was to be very factual about this. >> let me interrupt you. that's critically important. the top line says americans lose something. the fact is americans have the right to choose something. 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. >> i say we do not use language like lose. we talked about how the number of people with coverage would change over time relative to the baseline. i think part of what happens is that we have no control over how the press reads our work and interprets it, translates it. 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 document is written for members of congress. we have lots of detail in there about where that change in coverage -- >> those are the winds of change blowing out here, director.
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 congress than you do inside congress these days. though we won't have time to do it in this hearing, i look forward to having that -- congress could benefit more from your work if it was less the object of political conversation, more policy. >> right. may i say one thing about that? it was a conscious decision. we put out these estimates while the debate was going on. i got so many offers. we got so many offers to appear on tv and talk about things. we deliberately chose to let our reports speak for itself and not be -- that would be like interviewing the referee at half time. we did our best to describe it and it was up to you all to deal with the politics and decisions about it.
we're actually not dry tri-ing to get attention at all except from you because we want you to make good decisions. >> i'm reminded of when i lost my dog, whom i loved very much and i said no, no, no, i just have the freedom from my dog. that's how i looked at it. can you tell me, what are some of the transparency initiatives that 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. what are some of the things you're 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. we always wanted to talk to members if they have questions and that sort of thing. lately we're trying to -- we're hearing concern over transparency, trying very hard to increase transparency and doing it in a number of ways. there's been a lot of talk about the health insurance coverage model where we're completely revising that. we're going to be making presentations about different aspects that have publicly so we could get feedback on it, provide documentation and computer code. that's a big lift. it's actually -- we've been planning on doing this since i came on board three years ago. we've been too busy doing health care estimates. we had hoped to be done literally a year ago. health care estimates and having to do that with the old model to take the time to sort of update things and be sort of more transparent.
that would help, i presume acres bit, for people to understand where we get our health care estimates. although again we also made some presentation. we're trying to document our processes. we're increasing that. we're trying to document our models more. we're doing things like our long-term budget model. we're going to make that publicly available. >> what kind of formal review does cbo's work undergo? do you consult outside experts? whom do you decide to consult? what are some of the ways you check your work? >> we train people very carefully that they need to go out and get information from various different sources with different points of view and people who have some understanding, not only how legislation would work but how it would be implemented. we do that very carefully with training. once we get that done, we try very carefully to rely on all the data we found to make a general -- have 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 levels for big things, we have a huge number of people involved, for the health care estimates we probably had two dozen people involved. so a lot of viewpoints inside cbo, but also trying to get viewpoints outside cbo. >> are there analytical tools you lack that you would like to have? are there places you feel like you could improve the robustness of your analysis if you had access to more materials, more resources? >> certainly with the analytical tools the answer is yes, always. we have so many models. we're always trying to update them. they always need to be adapted. to give you an idea of the range of work we've got, we did an account of the models, the models that exist but that are recurring. we got up to about 215 different
models. we're constantly updating those things. this gives you the idea of the challenge we are have in keeping these things up -to-datup-to-da. it takes time to make these things publicly available. >> my final question is about a relatively new challenge you face, which is this outside criticism of cbo. as anyone who has led a team knows, morale is important. morale affects the quality of work. has your morale, the morale of your team suffered as a result of these attacks and how do you see that affecting your work going forward? >> i think our morale has held up pretty well because i think we have people who were professionals and they expect that people criticizing the analysis or disagreeing with 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.
we're actually trying very, very hard to do our work carefully. i think for the most part, people understand. we've had quite a few people come to our defense. people actually know cbos work and use cbo's work carefully have come to our defense. that's been very helpful. >> thank you mr. chairman. >> gentleman from alabama, mr. gary palmer. >> thank you, mr. chairman. i want to get away from the partisan jabs and get to issues that i think all of us ought to take very seriously. one of them is your report of 2017, the long-term budget outlook. you pointed out that -- this was about a year ago, that gdp was currently 7.7%. is that where we are? >> yes. >> you also pointed out in 30 years that the gdp will be 150%.
>> yes. >> and for anybody who is still awake at this point, watching this, i want to point out that this means our debt will be bigger than our entire economy. is that correct? >> that's right. >> is that a serious problem? >> it is a serious problem. it's a serious issue that 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 of talking about what we did last year or year before last? >> i want to be careful about making recommendations to the committee. >> you put out the report. >> we support that work. >> you put out the report. it's a serious report and i assume you're planning to release another long-term budget outlook in a month or two. would that be fair? >> that's fair. >> you're obviously looking at the numbers now. i don't know if you can speak to that. 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 of net to gdp. >> we have some of those scenarios in our budget outlook that would be coming up. we do have some scenarios of what it would take if you start now and that sort of thing. i don't know those off the top of my head. >> it's about $680 to $700 billion, isn't it? >> you read the last one. that sounds right. >> so my point, mr. chairman, is that since you are now chairman of the budget committee, we have serious work to do if we want to get our fiscal house in order and it's going to require we make some tough decisions in regard to budget, particularly mandatory spending. that would include health care. also i want to ask you, in your last report that we were looking at, i think you were projecting economic growth at 1.9%. is that correct?
>> long-term economic growth would settle in at -- >> what's long term? ten years? >> i think we would settle into it, that's right, before ten years. seven or eight years and 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 would like to do is point out the sort of things that would be needed for that to improve. >> what would that be? >> supply side things, capability of the economy to increase production, past its sort of potential. obvious things, biggest single problem we have is supply because of the aging population. >> i appreciate you preemptively bringing that up.
making sure that the able bodied are in the workforce and taking a look at what we need to do in order to bring other people in to work. i only have over a minute left. i want to change directions a little bit here and ask you, i appreciate the work you're doing towards trying to enhance the culture of transparency at the cbo. has there been discussion about sensitivity so members can see how small changes and assumptions could drastically impact the estimate? >> i'm a fan of that. we do that certainly in the reports where we have more time, like the outlook. that can be really hard to do in cost estimates where there's a real time constraint. and then sometimes there's the so-called unknown unknowns where there's some statistical uncertainty. but also there's some uncertainty. we just don't know what it is. >> is this because of limited band width or insufficient
tools? limited band width for the staff? if we're going to start talking about how we resolve the longer term issues 30 years down the road, these minor changes could make big differences, will matter a lot to this committee. >> sure. to be honest that's one of the reasons we have a fair number of economists to help us work through this methodology and develop some ways to be more transparent on things like the uncertainty. >> thank you, mr. chairman. i yield back. >> thank you. mr. palmer? >> thank you plrks chair and thank you, director hall, for being here with us and for your time. before coming to congress, i was a business woman and ran the washington state department of revenue. and i know that organization can't move forward if they only have limited availability. a business wouldn't stay in business if it only planned 30 or 60 days at a time yet here we are, four months into the fiscal year and have passed four
continuing resolutions. would you agree that this very short-term approach to budgeting undermines the budget process and introduces unnecessary 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 sort of the technical work that we do. it's part of how we establish our objectivity. >> well, does this uncertainty make it harder for you to provide long-term budget projections? >> sure. it poses challenges. i spent some time as the head of a federal agency, bureau of labor statistics. and the budget challenges there from not knowing the budget was not trivial. >> and what about your own ability to plan for this year and hire staff? >> that's an issue for us. we had some extra expenses last year. right now our continuing resolution is not what it needs
to be. if we were to continue with this the rest of the year we would actually have to cut back on staff, training and things like that that would make it very difficult for us. >> thank you. also, my district is a district on the northern border of washington state, pretty diverse district yet everyone seems to agree that we need to pass comprehensive immigration reform. we have farmers, business community, faith based community across law enforcement, across the board want to see comprehensive immigration reform and if your prepared testimony, you mentioned that the cbo will publish new reports in 2018, describing your processes for producing economic forecasts for major legislation affecting health insurance. i wonder do you plan to do anything for major legislation affecting immigration? >> if we have specific proposals we'll do our thing and estimate
the likely impact. >> in 2013, cbo released a report on economic immigration reform. that report said 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 $7 billion over the 2024 to 2033 period. folks are talking about debt and deficit. and so as there are several proposals for immigration reform in both houses of congress at the moment, are there any key takeaways from your 2013 analysis and modeling that will be helpful for members to know as we work to craft a new immigration bill? >> i think you got the main takeaway is fine. i don't recall too many specifics at this point.
obviously immigration reform really depends upon a lot of the specifics. that's one of the things we're very, very careful about. 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 is. >> a lot of work went in from the cbo in the past on this issue and it has shown it would decrease budget deficits and obviously 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. i think this is an important conversation. i want to emphasize that the congressional budget office is a nonpartisan office and is tasked with objectively looking at the
facts. thank you for your work and i yield back. >> thank you. mr. renacy from ohio, the swns yours. >> thank you, mr. chairman. i want to congratulate you on your selection and look forward to working with you in 2018. i appreciate this hearing. i hope we can also go back and look at budget committee reform we did a few years back and look at some of those issues as well. thank you, director hall, for coming to my office and talking about how you can be more transparent. we talked about my career. i spent almost three decades in the business world. 3,000 employees at one point in time. i had to wake up every morning making decisions on how i could make sure that 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. what you and i talked about 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 concern 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. as your make those decisions you're moving on to another issue, another issue. at the same time i think it would be best for members, especially in the budget committee, to realize some of your decisions are right, some of your decisions are wrong. where you made your mistakes, where you made your failures, where you were right, so we can do 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 talk about how you're going to change that transparency?
we talked a little bit about that. >> one of the things we've done this past year, we actually produced a report that looked at how we 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 about three percentage points. it 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 say whether that's good or bad. we would like it to be zero. 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 estimate, pretty careful report on how we did on the coverage
estimates under the aca. not just coverage. excuse me. budget estimates of the aca. that's something to look forward to. there's been a lot of focus on that. we went back and did a nice objective look about how we did and how others did. >> sure. $3.5 trillion budget. i know the trustee report and cbo differs on social security trust fund and the shortfall. can you tell me 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, the shortfalls and outlays but we also have two reports that differ. >> we had a hearing a little while back that was really helpful for us to understand how social security comes up with the numbers and we talked to them about how we came up with our numbers. after we produce our next long-run budget outlook, we go
back to compare ourselves a little bit to the social security folks. the difference, the biggest difference starts with their economic assumptions, which are sort of basic. we do have some differences there, difference in labor force. there are 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. i would like to update that. >> you would admit, though -- i talked about your predecessor. cost differences and cbo scores are different than my outsider scored it. i met with cbo. i did just get a learning model for myself. and it was simple math. cbo was saying this is what i believe and my outsiders were saying this is what i believe. we could have those issues on
anything. >> that's right. >> that's why transparency is so important. >> sure. >> i appreciate it. yield back. thank you. >> mr. renacy, thank you. miss wasserman-schultz. >> thank you and congratulations on your ascendency. for a little historical context for some of my colleagues, you may know that i was the chair and ranking member of the legislative branch 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 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 we v that's something
that congress has endeavored to continue to make sure you have. because if you are ham strung by not having enough staff then there's a concern. and i've had cbo analyses i've agreed with, disagreed with. appointed by speaker ryan, i believe, and you worked in the george w. bush administration and did dynamic scoring, an analytic process with which i disagree. yet i don't malign 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. but we're in a world of alternative facts and so to me it's absolutely essential we have cbo's objective analysis in the majority and minority so 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 generated by unduly favorable projections or unfavorable projections are likely effects of republican policy proposals. >> i have about 25 years of managing policy, policy analysis, policy research. great technical people who are professional, do the work objectively. cbo is at the top of that. they're very verks professional. they do a really good job.
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 have been particularly bothered about the efforts to sort of attack our credibility because we spend so much time trying to be objective, 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 nonpartisan 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. i'll again stress 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 outlook, cbo projected with a continuation of current policy, the life expectancy gap between those with high incomes and those with low incomes will continue to grow. is there any reason for to us believe that this projection was erroneous or the subject of today's 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 are actually are actively researching that a bit to see we get it right in our forecast. because that's an important part of our long-term forecast. >> thank you. yield back the balance of my time. >> thank you. mr. arrington from texas. >> thank you, mr. chairman. look forward to serving under your leadership and congratulations on your poi appointment. dr. hall, thank you for your service. the topic, as i understand it, was organizational and operational in nature. and so i'm going to be a little boring in my series of operational questions but just because they may be boring doesn't mean they're not extreme ly important. the sort of philosophical question. if you can't ma 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 you do and the people you manage? just succinctly, if you could, please. >> sure, sure. judging the quality of the end product. everything that comes out of cbo has my signature on it. we have a very strong review process. we want to be comfortable with it. we now do some things, we'll try to do more things to assess how we've done. i mentioned the report looking at how we've done, outlays, revenues, economic -- >> would you say quality -- pardon me for interrupting. to be more specific, when you're talking about quality, do you mean accuracy, impartiality? would those two be at the top of the list of quality? >> yes. >> how do you measure accuracy? do you go back and look at what you projected, what you estimated and then 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 that we do, we've done privately for years, which i think there's been an increase, we start to make public. once a year we do an analysis of actuals. we get down into all the small budget categories and see now how do we predict those numbers this past year and what was the actual number? we have an analyst go through that. 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 yourcra accuracy, succe rate -- if you have that can i look at that to see how often
you're hitting the target so we can work together to make improvements. if you can't measure it, you can't improve it. >> right. i can see what we're have. what we're really hampered by are pieces of proposed legislation are such a small part of budget categories. once we make an estimate quite often we have no idea how it actually worked out because the data is not there to do that. we try to do more of that individual analysis. a lot of it is we just can't do that. >> thank you for all of that. let me jump to culture. i think it has a tremendous impact on your success. you said you have a strong culture. where is your weakness? where culturally can you improve? be very transparent about that. that would be helpful to us.
>> when we're under time pressure we have to decide what is a really good analysis? there's a trade-off high enough quality, comfortable enough with the estimate and frankly being leaned on sometimes pretty hard by committee staff. hurry, hurry, hir. now we're throwing in this. >> thank you for answering the question. are you all unionized? okay. no union members. what are you doing now from a product standpoint or line of business? what are you doing additionally to what you've been authorized
to do in terms of products? >> 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. there's no output for that except i hope that committees find it valuable. they spend a lot of time asking the technical questions. that's a real difference from the old days. a lot of it is because it 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. mr. chairman, i yield back. >> that would be great. thank you. >> let's go now to the congresswoman from washington. >> i want to echo how important we know the congressional budget
office is and thank you and your staff. i do share the concerns with some of 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. i found several statements, omb director mick mulvaney, and said if the same person is doing the score of undoing obamacare, who did the scoring of obamacare in the first place my guess stla there's some sort of bias in the favor of a government mandate and last year the white house tweeted that the cbo simply can't be trusted to accurately predict the outcome of important health care legislation. i want to give you a chance to respond to those charges once again but also say i think it's important to recognize, with all due respect, my friend from georgia, commenting on miss 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. but your job, as i understand it, is to provide us with the numbers of any proposed legislation. so i want to give you a quick minute to respond again to the charges of bias against the agency. while you do that, please tell us if your staff are career or appointed. and explain to the public 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 politickers views in anything. we try very hard to avoid that.
part of our process is -- i worked for many years in the executive branch where i helped hire lots of people who were technical, unbiased people, able to work objectively. we go even a little further and it's part of the culture. we'll go back and look at some of the places. if they've been in political jobs relatively lately, we don't hire them. we check their social media. if they post a lot of things that would be inappropriate for someone at cbo to post, it puts doubt as to whether they can work objectively. we just don't throw analysts out there by themselves. we have a review process that involves lots of people. ultimately, the director is responsible for all the work at cbo.
i think the cbo has processes in place and we try very hard to make sure that we're objective. >> frankly, if there were signs of somebody not being objective in their work, that would be against policy. we're like congressional offices, people work at the pleasure of the director. >> thank you. i appreciate that. let me talk about the importance of the cbo score. my colleague, mr. higgins and i introduced a bill saying 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 taxe
taxes. >> we describe the legislation in detail and what exactly it does. if you ever looked at that actual text and read a cbo you can tell there's a lot of work there. describe exactly what it does, what's involved and what's impacte impacted. >> thank you. let me end by asking if there's anything you want to say on the recent tax bill and how you built all the wide ranging aspects. >> sure. joint committee in taxation. we're going to work it into our own economic and budget forecast. we've been doing that. we would normally close it in december. it's still open. we hope to close it by friday, hopefully. full impact of the tax bill. on top of that, we'll overlay the budgetary impact. it will be fully scored in a
sense in our bien. >> thank you so much, director. and i yield back. >> next we go to the former distinguished chair of this wonderful committee. young lady from tennessee. miss black. >> i congratulate my friend, my colleague and my classmate on your new role as the budget chair and wish you the best of luck. i will certainly be a team player with you. i also want to thank you, mr. hall, and all of your members of your staff for the work they do. i know as budget chair and being on the ways and means committee, the many, many hours 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 newspaper saying that we are picking on or totally disagreeing with the congressional budget office but i think it's healthy for us to have discussion. we're not talking about whether
we agree or disagree. we're talking about getting it right. we have policies and those policies 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 was 2.3. we had two quarters 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 -- i don't know yo 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. on more than one occasion i've seen an estimate come out where i don't agree with sumpgs they're making on the behavioral
side. for instance one of the bills i had about making sure that our dollars under title x would, first of all, go to orgs that don't provide abortions and that those organizations that do provide abortions would close down and then we would have x number more pregnancies and those pregnancies would result with more children being on medicaid. well, 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. so the number was so high on that, of what the costs would be that the policy then is difficult because we have to pay for it. and that's where i really have a problem, is how we get to these
assumptions that are behavioral assumptions. if you could talk briefly about that i would really appreciate it. >> sure. we try very hard to see what sort of economic literature there is, what sort of literature is on how these things are working, what's likely to happen, what sort of data is available. on things like you're describing, it can be really hard to make an estimate. we do as thorough a job as we can. looking at the health care providers, how many are in regions where they're the only provider, how many regions where they're not? one thing i think 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 we didn't see, we'll take a look at it. >> 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, which is about transparency. i think that we have to look at it in a way that members 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. one thing i continue to hear from my colleagues and even my colleagues across the aisle, that they would like to see how you got to where you got to. sometimes you can 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 something that's also talked a little bit more. many times you can accept what someone is saying or have that argument if we at least have the transparency. with that i am right on time and i yield back, mr. chairman. >> thank you, miss black. >> thank you, rank ing member ad thank you, mr. chair. thank you, dr. hall, for your testimony today and for the objective, nonpartisan analysis you provide our committee. the recent tax bill will have wide ranging impacts on the budget and the economy. can you walk us through how you build that into your baseline? >> sure. it starts, of course, with the economic forecast. and it's a lot of walk through all the details of the bill.
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, we have the budget forecast on it. there's so many steps on it. we have a really good tax group in there. and we're going to try to produce something that is understandable and is as accurate as possible. >> do you ever have third party outside people that look over your analysis? >> absolutely. we have a very good panel of economic advisers who meet twice a year. they actually sort of approve our economic forecast for us.
we actually make a presentation to them, will 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. we'll have skugs with them on aspects of the analysis of the forecast that we're unsure of. >> how do you go about selecting those advisers? >> well, if you sort of look at our panel we're it's up on our website. very impressive people from different schools and we actually make an effort of people who have sort of a diverse background with respect to politics. we try to avoid that part. >> 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. not during my time, i don't know. 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 jtc'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. >> so you don't have an estimate today? >> no, i don't. >> okay. do you know if the estimate that jtc has put out there includes 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 you came up with? >> i'll have to get back to you. >> i believe the number was 2.3 trillion but i appreciate me
getting me that information later. >> i'll yield back my time. >> mr. lewis? >> thank you, mr. chairman. congratulations. looking forward to work wug and director hall. thank you so much for being here. i'm a little perplexed at the other side of the aisle's handling over dynamic scoring. it's only a model about a century old and alfred marshall came up with supply and demand curves. i don't think anybody doubt the the elasticity of work and savings, we saw that in the '60s, '80s and are seeing it now. if you were to ask anyone on this panel if they wanted to reduce smoking, which we all want to do for our young people, what is the first thing they would do? raise the cigarette tax. but prices don't have any effect on people's behavior. of course they do. i understand you've got a very tough job. if i could predict interest rates or super bowl winner i
would be in a different line of work. the bottom line is that 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. let's get back to the baseline you issued of 1.29% growth if we may. atlanta fed came out with their first quarter estimate of 4.2% gdp growth. you mentioned in your analysis and today that you had concerns over the labor supply. as we all know, the gdp, economic growth made up of two parts, productivity and people. either one goes up you're going to get more economic growth. did you take into account, from an historical perspective, increases of productivity when there is more capital invested, more incentive to invest capital and you're sticking with 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 historic levels, something like 1.3, 1.4%. so that is, in part, what's baked into that long-term growth. it really is that labor supply part. >> how would you account for increases in gdp growth in the last few quarters? >> the problem with the last few quarters has been a number of things, anticipation of the tax bill. part of it is probably demand side because we're getting stimulus. we still think there's slack in the economy and there's room for demand status. >> that's an interesting point that you made. that's why some of us have concerns about this. we can go through the debate over kenzian analysis or demand
and supply side. we had it with stimulus package in the previous administration and didn't get growth. i think some of us would like to see more supply side analysis in there, restoring productivity and growth to, quote a famous economist, john baptist, say that supply will create its own demand and we don't need to go down this road time and time again. isn't that a value swrumt that the cbo makes that we're going to use demand side analysis? >> not really because i think certain aspects of any legislation is demand stimulus and other aspects affect the supply side. we don't assume at all that that supply side is just fixed. in fact, there can be policy things that affect that. >> do you think you have a demand side bias? >> no. one of our challenges
that part is just tricky. it is two different models really, two different approaches. >> it certainly is. great debate. in 2012 you came out with the exchange coverage rates for the affordable care act. you predicted around 23 million would be covered under the exchanges. center for medicare and medicaid center said 10.4 was the actual 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 would still be off a little bit. little bit to 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'm going to have to cut you off. i've got to go. looking forward to a healthy debate. 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. yield back. >> thanks to the gentleman. in reference to his remark about the super bowl there is one thing you can take to the bank. that is that the minnesota vikings won't be winning the super bowl. >> that's low. i miss chairman black already. >> i'm going to hear from all the minnesota people now. >> mr. higgins of new york? >> thank you and coming from buffalo, the super bowl is not a good subject. couple of questions. the previous speaker talked about supply side. these are all very fair debates that should be debated vigorously.
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. it's not an exact science. i guess that's why it's subject to a lot of interpretation. but a couple of things that concern me. the treasury secretary had stated explicit ly that the tax cuts generally pay for themselves. do you believe that? >> i want to be really careful. some tax changes have different effects. some on the supply side, some on
the demand side. the literature, we need to look at the literature and how things have been affected going forward. we're going to work the tax cuts into our economic forecast so you can 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, ever. the best literature come from harvard and yale economists that in best case scenario says you can recapture in economic growth about 30 cents for every dollar in tax cut. i would challenge you as to challenge me whether the literature says anything differently. let me move on.
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. do you believe that? >> i haven't read that report but can tell you we'll have our own analysis. >> 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. >> if you increase household income, that increases aggregate
demand in an economy. 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 that and will be very careful to explain why we've come up with whatever estimate we have come up with. >> okay. just switching topics, infrastructure investment. i think the president will talk a little bit about tonight, presumably, about american infrastructure investment of some $200 billion, which will be used to leverage a somewhat of a trillion dollars in inf infrastructure through the combination of state and local
contributions in the private sector. i think all of us agree that an infrastructure investment is desperately needed. but i would remind people that the $200 billion is woefully inadequate and 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 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 to the keystone state, which could produce a super bowl winner. mr. smucker? >> thank you, mr. chairman. yes. that's one thing that we know that philadelphia will be there. thank you. congratulations. dr. hall, i would like to thank you for the work that you do, the work that your staff does. i have some comments. some of my comments have already been addressed. i would 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.
who should we talk to? we make an effort -- we get some opposing views. if you look at some of our analytical research reports we put out, you will see us list the names of the people who reviewed it. we try very hard to multiply ourselves -- >> i'm running out of time and i'm sorry to interrupt. i have a number of other questions. one i wanted to get to was the cbo first put in place 43 years should look atwe 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
>> the elimination of the mandate had an effect. we think it is what will raise the average premiums and exchanges and since children aren't covered under chip they are likely to be covered and exchanges or through medicaid and it will cost the government more by having children cover it that way. >> so essentially the chip savings are a side effect of the increased cost 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. effect ofked at the repealing the individual mandate
, the number of uninsured americans in premium costs. what did the cbo estimate? >> we estimate that after 10 years the number of people covered with insurance will be reduced by about 13 million people relative to the baseline. premiums would be about 10% higher. >> and what about the administration's decision on reduction payments? the aca outreach budget? allowing work requirements for medicaid? were those part of the calculation as well? >> no. entitlement, so -- at least so far until we get other direction from the budget committee. the tax bill, how does
the cbo account for administrative action on implementation of the aca? is that a consideration as well? >> it is, and that is one of the more difficult rings to estimate. 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 be implemented and how well, and clearly some of that didn't happen so well. year, ourit every estimate of the operations of exchanges and we try to take that into account. ofwas their consideration the fact that there was a reduction in publicity, of telling people about it, a shortening of the enrollment. >> it has been a little while since we have updated it, we will probably do that this spring.
>> is the cbo updating scores following the passage of the text -- of the tax bill? >> there are some proposals out , if we are working on anything it might be technical systems, but if we are asked to update any of those by the committee of jurisdiction we will do an update. responsive toays inquiries from congress? >> we don't initiate very much at all, we respond. >> for the administration as well? you are talking about the administration -- >> every year we go down to see if there are changes in
implementation, whether it is executive orders, that will and we trybaseline to detail it in our budget outlook report. >> i appreciate your work in the yield back. >> let's go to georgia. you for taking the time to come to my office. i have taken you up on that offer and i would encourage other members of the committee to spend some time with you and your staff in their offices, talking about the process. i want to thank you for the direct in candid responses, i found it helpful and look forward to continuing. process. get back to take acould, go back and five window in the budget process and it doesn't matter to me where it is.
10 years, 12 years, 15 years. look at the estimates you made in year one and what they turned out to be 10 years later, and do that to the second year and then another 10 years and all the way out to your five. accuracy at the 10 we are making it on this 10 year budget window so if you go back, what is the ?ccuracy at 10 years just this past year we looked at -- hecord for estimating gives you an idea of the average error. we look at the budget year and then 10 years down the road but after six years the average error was about 3%.
that means for individual parts, some could be higher and lower but the average was about 3% sto. >> yet we're making a decision on the 10 year window, correct? >> maybe when we update this report, we will consider trying to do it -- >> i would encourage you to do that because i think it is important but if we are going to make decisions based on a 10 year assumption that only give -- it doesn't do much to have 10 years worth of historical data. we are missing a significant portion of the equation in doing that. when you look at it and you look at the results during that needw, what tools do you to close that gap? 3% may not sound like a big
number but when you have a $4 trillion budget lying around that is a pretty big number. what do you need to be more accurate? >> that's a good question because we have a lot of challenges, one of which is that we have so much more work than we can handle, but that is not really an issue that we have been able to throw resources at because we suffer from a peak load problem. ,hen health care gets popular they are working full-time. >> can you talk very briefly about -- should we consider developing a new model for scoring, we are in this debate right now, demand-side versus 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 effective way and should we look at doing that more here to give us a better outlook? >> we really do look to research and try to talk to private sector folks. we can continue to make an effort to see if we can improve our accuracy by talking with other people. >> i think it is important we look at two things. i think we need to look at the 10 year accuracy -- if we are going to operate on a ten-year budget window we need the tenure data, we need to see what those outlying years are actually like. 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 is something that when
the gentleman from pennsylvania spoke, it was asking about your hiring process. you said we tried to get people with opposing views. define the view in the opposing view. >> by that, i don't mean in hiring but in consultation referrals. if it's a topic where we know there's some debate in the literature, this has a big effect are small effect, that is the sort of thing we will look at. our real goal is to represent the state of research on the topic, and sometimes there is not full consensus on research topic. >> mr. chairman, i yield back. >> let's go now to ohio, mr. johnson.
the ranking member has agreed to allow us to take care of the people in the queue before we go to him. >> thank you very much. again, congratulations on your chairmanship. this is your first hearing, and i think it is a good one. too, want to echo my thanks for you and your team coming by my office and having the meeting a few weeks ago that we did. i don't really know how to frame this question that i have, but i have heard you say a couple times in your testimony, we use this model for this, we use that model for that. anseems to me that there's element of science and an element of art in the work you guys are doing, that there's a elementn of subjectivity and
objectivity. some facts, some assumption, and speculation. i'm a pretty simple kind of guy. to develop aa way scoring methodology that applies to everything? and theirmbers staffs understand -- we have talked extensively here about the need for budget reforms, because we have a budgeting process that doesn't work, we have an appropriations process that fails us year after year. not for lack of intent, thought process. it seems to me it would be a lot -- it seems toss
me we would benefit from more clarity and understanding around the methodology. is there not a way to develop a methodology, the methodology, the score legislation, so that members in the american people can understand what we are potentially getting ourselves into? >> we are certainly willing to talk about ideas that you have. one of the things we have coming out, you talk about documenting models, we are also trying to document our process. we have a document coming out that says here is the process we go through in creating a cost estimate. here are all the steps, here is what we do. that is a transparency thing. that is the process we undergo, and it gives you ideas on how we could do it differently or how we could articulate the results differently.
developing aaid cost estimate. cost estimate is not the only thing we need. i mean, we need to understand a long-term implication on the cost side certainly, but on all areother unintended unplanned consequences of legislation. get to that part of it so that we have a clear picture of what legislation -- not just but long-term? estimates,did cost we have accuracy, how much time
do we spend to it where we are comfortable with the result. we need time to do it and we need the right transparency, those are things that conflict with each other quite a lot. i always think that the more time we have on an estimate, to do the work and do it carefully -- you look at time, youy, and quality, because can get to of those in the pyramid that not all three in the same time. higher quality will cost you more in take more time. if you want to cut time he will sacrifice quality or you are going to spend more money. , atmentioned a couple times least i heard it once, you just alluded to it there, taking more
time, you mention that we have more work than you can handle. what drives that? the cbo with the organization we go to to get these things scored and is a critical part of what we do and as my colleague from georgia mentioned earlier, the politics of it is crazy in today's 24-hour day new cycle. is it a resource problem? a time problem, training problem? issue isd say the big so little of our work -- we have a piece of legislation handed to us and face were this. so much of it is having ideas and helping committee staff through things. what are the things we should think about in this piece of legislation? technicality takes up just a ton of our time but there's a
reason that come to us. >> i yield back and i apologize for running over. that is an issue we got to address, i believe, as we talk about budget reforms and oversight of the cbo. there's got to be a clear understanding of the process and what they are doing, how much time they take to do it, whether they have the resources to do it or not. it has such series of locations to the work we do. >> that is what oversight hearings are about. >> i yield back. >> the gentleman from indiana. >> i think the chair, and congratulations. dr. hall, thank you. i also want to thank your staff who always seem to be responsive , especially with 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. when you talk about technical assistance, how much would you say -- what percentage of your staff's work on technical assistance is given to committee staff versus personal offices? >> most of it is committee. when we do have personal staff it tends to be technical help. an individual staff -- individual members, they don't have legislation out of committee, so it is not typically a formal estimate. >> so what percentage of your staff time -- >> we have to look into it. we probably do 350, 400 informal estimates. >> i appreciate that. i want to understand where you are spending your time. you talks about behavioral function. you looked at available literature and you offered a member of congress to submit literature.
if the estimate or the scoring came back and it was not what was expected, 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 is one of the things we do, we ask the committee staff or whoever gave it to us, is there data you want us to look at? made to wait, not members of congress are not made to wait -- >> we want to be sure we are looking at what you are thinking of. >> i appreciate that. when you talk about the economic advisers and the health advisers you have, i want to focus on the process a little bit. economicou used these advisers to multiply "your ability to understand what's going on in the world." what is there objective methodology used in som selecting these people. >> to be honest, it is literally
a director's choice to look at the makeup of the committee and think about whether we want some strength in one area or another area, to think about if we have the right kind of -- >> how do you assure, absent any criteria or methodology, if you are not creating and i cut chamber for yourself or organization? >> the best i can say is we put the names of everybody on our website, you can take a look at the panel. >> i've been looking. honestly, while i can determine some of their natural bias or professional bias based on the organization they represent her work for, i don't know any of them personally. i have not peer-reviewed their published works. have you, or is there any methodology or criteria that would force you to do you appear review? >> absolutely. we do work through their work -- >> i asked if there is an
objective methodology, you responded it is directors peck. is there any objective methodology or criteria are process that your organization goes through? >> this is one of the reasons why we have a very technically capable people working at cbo, because they keep up with literature and read the literature. when we get people on the panel we expect people to be technically capable and objective in their advice, just like we try to be objective and are working. >> so if you don't have an objective methodology, you don't have published criteria, you risk at least the attack if not the reality that you are creating and i could chamber into yourself, that if you were using these advisers to inform your work to members of congress, than you might intentionally or unintentionally create a bias that might cause tension.
be,uggestion to you would let's make this process more transparent. it's a great start to have the names of the people on the website. let's create and agree on, in a bipartisan way, criteria or methodology you might use to select people. if they are informing your work to such a degree. >> let me be clear, i mentioned those folks because they help keep us balanced. we make our own decisions, we make our own judgment, and we try to inform our own judgment but i don't want to suggest they are making decisions for us. >> i am not suggesting that, and my time is up. the point is you brought up this panel as a way to inform your work, which i think is healthy. assuming the panel is healthy. >> thank you. mr. brass from virginia. >> thank you, dr. hall, for being with us. i have four questions i want to get to real quick.
i used to be a liberal arts professor, and sometimes what is missing in the city is stigmatic connection between pieces of knowledge. my friend over there, my nice democrat friend, they are very smart and intelligent in the way they asked questions, we had the chicago economist, and the economist says it doesn't pay for itself. then you get into current law versus current policy, and then the key question -- 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. this score is always at the federal level only, it doesn't include state and local impact, which has a huge impact, and if you subtract a way it becomes politically misleading, you have
been asked of narrow question. how do we get truth in its totality, to avoid the politics. when i am making decisions on that outcome, how do you think about that quickly? >> one of my points was that we adapt to let congress wants. there is something different that you want and we are happy to talk to you and try to work it out. >> if you look at the fed forecasting, it was horrendous after the 2008 recession. that, butasons for there was systematic bias for eight years in a row, you have a problem when you can guess the direction. the second big issue that is coming our way, the csr bail what is the, etc.,
assumption of cdo on the score there? how is that's going to be scored? as if he is ending them are as if he is continuing them? >> we have been treating it as an entitlement. unless we get direction to do something different. we are assuming that the money will be found somewhere because it is an entitlement. >> that brings us back to the health care debate, in the score, i don't feel like we got a systematic account. in charlottesville we have the highest rate quotes in the country for a family of four on the individual side. that is not sustainable. we would love your economy is to save the way you are going, the economics are not sustainable for health care, in addition to showing us the merits of technical bills. the big programs also, i will just add one other piece that is
interesting to me, immigration is the huge issue coming our way, we are all debating that. have you guys done any scoring on the total cost of illegal immigration yet? >> no, we haven't. >> how do we get these folks to preempt -- these studies take long periods of time to do. -- can ijor issue request that, at what level will it be acted on if we ask for a score? point mightarting be -- i'd be happy to talk with our folks and we can come in and atk to you about how we look the literature and what it says about immigration, to give you an idea of where we see things nothe moment and whether or you want to see the work there. >> i don't want to get political, but it is pretty well
known in academia, i came from a small liberal arts college, and around the country, the makeup of faculty and who they donate to, if you go to harvard and yale and princeton, the overwhelming political -- it's a free country, you can be any don'twant, but if you have any economists on the faculty who vote for the current president of the united states you might call that bias. we are trying -- and that andudes a populist thing, how do you track that? >> let me give you an example. when we looked at the effect of minimum wage, a lot of it has an agenda, a lot of it is not very clear. we did a lot of sorting through the actual research, what was good research and what wasn't, we combed that down and focus --
it was actual work we tried to focus on. that gets us down to where we had somewhere to go, and that is how i think the people we talked to and we let their research speak for them. what is witnessing is the normative aspects of economics. we try to abstract and act like we are doing objective social science, when it is very hard to come by that. mi already over? sorry. thank you very much. >> thank you. joined the that have dias. ms. jackson lee from texas. >> thank you, and congratulations to your physician. thank you for this important hearing, and dr. hall, thank you for your patriotic service to the nation.
i was just in the judiciary committee voting on the need for transparency to view the newness memo and the underlying material and my colleagues chose to issue statements of facts. is this the role in the mission of the cbo to present whatever they present on the basis facts? >> absolutely. it was the in 1987, budget resolution of 1997 that created the children's health insurance program. i am not sure if you were of staff for might be aware of that, but good things can come out of the budget resolution. we have often saved lives. justllow me for a moment to create the atmosphere very quickly. unlike in a dictatorship or you can judge
the soundness and health of constitutional democracy not by the physical health of the chief magistrate of the vitality, resilience of its critical institutions. the president began his term in office by disparaging the can -- the intelligence committee, he learned the fbi was investigating russian interference, the president tried to coerce personal fbi directors and then fired him. special counsel robert mueller was given to oversee the investigation and the president began a campaign to obstruct him and disparaging. here we are now, looking at an institution that since 1974 house in a nonpartisan dinner done the work that it should do and yet we are being disparaged litmus tests. i would just ask a simple question, as you are looking at people with phd's and master's,
do you ask them to show you their voter registration card? >> absolutely not. >> and since we don't really have registry that parties, do you ask them what party they are as? >> we do not. >> as you continue your discussion to oversee the ballot, the work you do, and teams are called together with expertise, in that discussion, do you ask who they voted for? >> no. >> would that be the appropriate guide in which you make your determination for these important works? >> absolutely not. -- ise of the precedent this a document that you have produced? >> yes. >> 10 things to know about the cbo. number one, lawmakers created the cbo to give congress a stronger role in budget management. this is a political statement? >> i hope the. >> did you intended to be? >> we did not. >> the congress sets the cbo
priority, did you attend that as political? do i have unanimous consent to put this statement into the record? >> without objection. >> thank you. theme ask specifically, reason textile made substantial changes to the tax code, with wide-ranging impact on the budget. can you walk us through how you build that into your baseline? and i know my time is short. and what is cbo's best assessment of the impact of the reason textile on the deficit, mdu do this in a nonpartisan way? and if you can remove the third question, would you explain why the scoring of a simple chip extension changed the textile? process, the actual tax bill itself, was scored by the joint committee of taxation. we were required to take their estimate but when we do our baseline, which we are working
on right now, we've old in the effects of the tax bill. >> can i get that in writing? let me just jump to this question. is this tax deficit going to have an impact on the budgeting process of the united states? >> do you mean -- >> the tax bill being passed, is that going to create an impact? >> it may -- it will likely change our forecast for the next 10 years or 30 years. bill --e deficit tax let me ask you this. talk about the question of aging populations. unemployment or the opportunity for people to work increasing the engine of the economy -- suppose dreamers were able to work, does that drives the economy? >> the effect of any of those things on the labor supply is part of our analysis. >> all that plays into it, and
you make the analysis fairly without any attention to political ghaisar names. >> yes. >> i happily yield back, thank you. >> thank you. mr. grossman, wisconsin. >> thank you. sorry, i was at a couple other meetings first, but i saved the best for last. i will give you a couple questions off the top. what time every year do you come out with your estimates as far as future revenues are passed revenues? >> we do our first baseline around this time of year. we will be delayed in this year because we are working with the tax bill. >> ok. i would like to ask, because there is a feeling that business optimism made have changed when president trump was elected. could you tell us right now what the receipts were -- do you have the receipts for fourth quarter last year?
>> no, i don't think we do. i don't have it in front of me. >> are they available yet? >> if they are, we can get them to you. >> ok. >> they probably are, i just -- >> we will look at third-quarter. do you have the receipts for the third quarter of 2017? >> i'm sure we do. >> do you know whether those were higher or lower than your estimate for the prior year? -- every quarter we do produce a little document that tells you how we are doing with receipt. >> but you don't know whether it was above or below projection. >> i don't know, sorry. >> i want to like you a lot, but that is usually a big deal. we will switch gears. me. kind of amazes we will switch gears. you want 9% to 10%
increase in spending this year over last year? is that true? >> yes, that's right. >> and you are not alone in that. everybody thinks the problem we have in this government is we're not spending enough money. but you are apparently right now spending some steps to actually >> i always feel as things become more computerized or automated you should require you people, that you feel need a substantially larger staff today than years ago? >> we are trying to respond to congressional interest in speeding up some of our estimates and providing more transparency. if we are going to do that, we need more staff. >> you think congress is asking
a lot more questions than they were eight years ago? you feel your demand for your services is much greater now? >> i wasn't around eight years ago, but i am sure it is true. i would say a lot of the transparency stuff is not free. we have to take time to do that and something has to give. >> you have 200 employees? 233? and how many employees do you think you need to adequately do your job? >> i think we are fine adequately doing our job now, but if congress wants more from us, we have a plan to increase our staff by about 20 people over three years that we think -- >> so right now you say you have enough people to deal with inquisitive congressman, you were worried about the future? >> let me put it this way. since i have been here we have way more work we could do. we just have to prioritize. one of the more frustrating
things for me is dealing with individual members who want some of our time when at the same time we are working very hard all out on similar work for a committee. it's just a matter of resources. >> you think sometimes congressman asked him questions? >> no, actually. >> in order to turn around stuff on a timely basis, you feel you need about 20 more people. ad if you were given substantial increase your higher that he would hire 20 employees? >> that's right. some of it is also the increasing cost of doing business, which includes cost-of-living raises for people. when you don't get money for cost-of-living, you have to go down a couple people. >> ok. those are all the questions, ideal the remainder of my time. >> the gentleman from wisconsin. >> my ranking member has been very patient service entire
process, deferring his questions to the end as i have.i want to yield to the gentleman from kentucky. >> thank you. it has been an interesting session. i have enjoyed the conversation. thank you for your testimony and your response, your very cogent. i also want to add that i have been the beneficiary, they are very valuable and i have had the pleasure of colleagues in place of business and your team is very impressive as well. all, i want to mention, i think it was my friend who sense about not having a of the bias of the leadership in cbo, and i will say that in the six years your predecessor was here when i was on the committee, i never for an instant had an idea of what his personal bias was, and i was
pleased to find out after he left the position that he was pretty liberal. i will say that i have never had one indication listening to you are talking with you of what your personal bias maybe, so isolated that. -- i salute that. this is a totally rhetorical question, have you ever done an analysis of the cost per piece of legislation enacted? part haven't, in large because it varies so much. it can be a piece of legislation changing the name of a bill, or something we have worked on for 18 months. >> mr. grossman asked the question, in this document you provided, it says that in 2017 you did the 740 reports. the you have any sense of how that has grown within your tenure? we are probably at 100 or so
above. in some respects it is a little misleading, because so much of our work is that technical assistance side. if we wrote down the instances of technical assistance, we are up to something like 10,000 of those. >> a lot of work. i think someone asked you a question, you were responding about -- this is going back to the aca -- the exchanges. -- isyou want to continue there nation of what was happening in the exchanges and how that i'd relate to coverage and cost? is we wantedo make to get an estimate of the exchanges correct and more than that we wanted to get the budget impact correct. we have written a little piece that goes through how that works
out for us, and how accurate we were on the spending, on the subsidies, how accurate we were on the number of people who were covered. it's a bit more of a complete look at things. one of the real challenges, of course, with the aca, implementation was such an important thing. we do what we can, but we wind up assuming that implementation will be the average, the same as any other piece of legislation, and that hasn't always happened. >> i don't want to spend too much time on health care but i do want to ask one question. when you put together the aca, one of the things we focused on was making sure that preventive care was a significant part of the agenda, because we believed that preventive care ultimately has a significant benefit on the budget in reducing long-term health care costs. have you ever as the cbo, to your knowledge, ever done a score on the benefits of
preventive care? the one that had the clearest result was from the cigarette tax. increased revenues for better health. that had a real impact. odd counter. the cigarette taxes be reduced for smokers and that would reduce medicaid and medicare then people would live longer and that would increase government spending because they are living longer. so it's order balanced out the spending which is not part of what we do. window, bute budget just in terms of pure preventive care, the ability to have
checkups annually without co-pays, has there been a story on those types of initiatives? >> i can look to see if we have more examples. sometimes the preventive medicine stuff is hard because there is not as much evidence as we would like to sort of base the analysis on. struck, i've talked about this in many contexts, but the idea that when the cbo puts out a number like 23 million, automatically that gets used for political purposes. but it gets in concrete in the public's mind. had the cbo contemplated and maybe this is a restriction we can put, that you could create a range of estimates so that first
of all it would narrow your error rate, but would not be -- that peopleis rely on for arguments when in fact, nobody is ever going to be accurate exactly and the range might be more useful. >> is a budget committee thing. the point estimate is used in enforcement. so the budget committee needs a point estimate. so we try to characterize that certainty as best we can. sometimes we can play in ranges, but that is hard to deal with. not so much uncertainty as unknown unknowns. >> can you walk us through some of the other requirements that affect how you develop a baseline and score legislation relative to that baseline? >> there is quite a lot. social security
trust funds, we are directed to assume that pays out rather than the trust fund cuts off benefits. when we forecast discretionary spending, we are really desperate are really forecasting. little rulesose are directly through the budget committee. us to actually deal with some of these. i want to talk a little bit about something i am obsessed -- pacem as the paint of change in society and how that affects lawmaking. geithnerk secretary about 30 year or four year projections -- 30 year or 40 year projections and he said i don't think any projection outside of five years is reliable.
the pace of change in the world has only quickened. anas reading the other day interview done with the managing director of mercedes-benz. he had some unbelievably disruptive projections about what was going to happen to various fields. within the next 10 years. they are things that for instance, basically the cost of electricity because of solar power is going to go to zero. obviously that has huge implications. abolition of a huge percentage of jobs that now exist. we know about the possibility of 170,000 truck drivers losing their jobs imminently because of self driving vehicles. a lot of the things are happening. is that the kind of future cap -- futuristic thinking. is that done in the cbo?
helpful?t might be >> there are unknown unknowns. -- an look at things like historically. we have a point estimate and then we can vary by halle berry to the past. to give you some idea of direction we are heading. it does give you some idea of how much variation we had. >> i thank you once again for your work, your service and appearance are today. >> i hope not to take all of my
10 minutes. i want to bring out a couple of questions. cbo has nine distinct divisions. when was the last time that and how often the upset >> we have had a little turnover in those organizations. we have been replaced over the last three years because retirement and etc.. when that happens, we think about doing have the right sort of organization. we haven't given any real clear thought because i think it works pretty well. we work in teams. our budget analysis is separate from our product area, our program folks.
a lot of what we try to focus on more so than the organization is trying to make sure they coordinate better. sometimes our budget analysts than oury different economists. we need to make sure they listen to each other and work together. it is probably a function of our organization. >> you a not afraid to get outside of the box? >> not at all. a couple of words about joint committee on taxation. , i realize have there on the floor above you and probably watching, do you have a good relationship with them? is it a collaborative relationship? >> i think so. rolese pretty distinct and they have been very patient
about reviews of our stuff. we certainly worked well together i thought on the health care estimates. >> from time to time, because of the make up of your organization , are there discussions that go -- this goes back to my collaborative question. are there times when your folks in cbo might think differently from jointhing 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. i think the biggest room for would be if we are more transparent with each other. we do manage to work together, but i can't think of instances
where we did any sort of second-guessing on what they have done. since the passage of the tax cut and jobs act, there have companies andof businesses large and small that have made significant decisions about how they are going to take this windfall, real or perceived, and how it will impact the streams of people that work for them, bonuses, raising minimum wages, importing more resources into the retirement plans and those kinds of things. -- i know there is expected to be some of that, but has the avalanche of this news coming out surprised
anybody in your organization and joint committee on tax? >> we have had some discussions about it. from our look at the forecast with the tax cut in it, we have done some going back and have seen how consistent this is with what we have seen with the initial reaction to the tax bill . i don't think we have anything that is been dramatically different than we expected. my last question is, the u.k. their cbo equivalent, they have a process where they take theyin policy issues and give some kind of a confidence factor to them regarding the
data that is used, regarding the model that is used and regarding the behavioral aspect of it in and they give a kind of final grade to that. does cbo have something like that? i know you have spoken about how from ak at your products confidence standpoint, but do you have anything that has a metric like that or a confidence factor built in? if you don't, have you considered using something like that and sharing that with the congress? confidence and are uncertainty is mixed into our work. that is an interesting idea. we've had some interactions with the british equivalent. i think it would be worth our time to look at what they do and get some good ideas from them. we would love to figure out how
to do it. >> very good. dr. hall, thank you for appearing before this committee today. i want to advise members they can submit written questions that can be answered later in writing. those questions and answers will be made part of the formal hearing record. any member who wishes to submit may do so within seven days. with that, this hearing stands adjourned.
>> on it newsmakers this weekend , our guest is tim phillips. he talks about the plan to spend up to $400 million during the 2018 midterm elections to help keep the house and senate in republican control. he also discussed the congressional agenda and hopes for entitlement reform and legislation to address daca. what's the interview today at 10:00 a.m. -- watch the interview today at 10:00 a.m.. >> lindsey mcpherson reports for roll call and covers house leadership. congress is facing another shutdown thursday at midnight. you covered the republican retreat in west virginia, what did you learn about their plans to avert the next shutdown? lindsey: from the retreat itself
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