The Laudable Pursuit: Make the CBO Show Their Work

Senator Mike Lee
2017-08-04 13:51:35
August 4, 2017 "to elevate the condition of men--to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start and a fair chance, in the race of life." --Abraham Lincoln Chairman's Note: Make the CBO Show Their Work When Democrats passed Obamacare on a party-line vote in March 2010, the Congressional Budget Office estimated that by 2016, 21 million people would receive health insurance through the law's exchanges. In reality, just 10 million people did. The CBO's model was off by more than 100 percent. The same CBO estimate predicted that Medicaid would grow by 17 million enrollees to about 52 million. In reality, more than 34 million people have signed up for Medicaid since Obamacare became law, for a total of 74.5 million recipients today. Again, the CBO's model was off by around 100 percent. Now the CBO wants us to believe, based on the same models, that just repealing Obamacare's individual mandate, without a single dime's worth of cuts to Medicaid, would cause more than 7 million people to abandon their Medicaid coverage. There are good reasons to be skeptical of the quality of healthcare that lower-income Americans receive through Medicaid, but why would 7 million voluntarily give up Medicaid coverage they receive for free? These CBO projections, and others like it, strain the boundaries of common sense. When it comes to topics like the effectiveness of the individual mandate, there are sharp disagreements among experts. That's why, in the academic community, scholars have to "show their work" by publicly disclosing their data, estimates, and analysis to scholarly scrutiny, and most importantly, refinement and improvement. Congress does need a scorekeeper to provide budgetary estimates for the policy changes it considers. But at a bare minimum, that scorekeeper should be forced to show how its models work. Currently the CBO doesn't have to do that. It's a "black box," a secret formula even Congress can't be allowed to see, yet which the House and Senate must treat as if they were handed down on stone tablets at Mt. Sinai. It's an indefensible situation. That is why I have introduced the CBO Show Your Work Act of 2017. This bill would require the CBO to publish its data, models, and all details of computation used in its cost analysis and scoring. CBO would keep its role as official scorekeeper of congressional budget proposals - but now the public and the economic community would be able to see what's going on in all those spreadsheets and algorithms. That is, it would hold CBO to the same standard the American Economic Association's "Data Availability Policy" sets for all academic economists: requiring all paper authors to ensure their data "are readily available to any researcher for purposes of replication." Policymakers need data and data analysis to do their jobs. But to do their jobs well, they need the best analysis. And centuries of practical experience tell us that transparency and replicability are essential to the pursuit and acquisition of knowledge. There is simply no serious argument for insulating the most influential economic modelers in the United States from the academic standards that govern everyone from Nobel Prize-winning physicists to second graders "carrying the one" as they learn long addition. We can do better as a Congress and a nation. We are never going to agree on what the best healthcare, tax, or energy policies should be. But when we make our arguments about the costs and benefits of our preferred policies, we should at least be willing to explain how and why our policies would work. Making the CBO show its own work would be a great first step. A version of this op-ed first appeared in The Washington Examiner. Reducing Fire Fuel Loads in Our National Forests Click here to watch video Issue in Focus: Child Tax Credit For many years, the federal tax code has unfairly penalized married couples for having and raising children. Under current law, workers pay payroll taxes in order to fund old-age entitlement programs like Social Security and Medicaid. Working parents pay these taxes like everyone else while also making large investments in their children. The average middle-income family spends nearly $250,000 to raise a child to age 17, according to the Department of Agriculture. And that hefty sum does not include the cost of a college education. This situation is unfair to hard-working parents, who in effect contribute twice to old-age entitlement programs: First through direct tax payments, and second through rearing the next generation of payroll-tax contributors. I have worked hard for years to eliminate this "Parent Tax Penalty." The core of my proposal is an expanded Child Tax Credit, as outlined in the Economic Growth and Family Fairness Tax Reform Plan that I co-authored with Sen. Marco Rubio (R-FL). Currently, the tax code includes a Child Tax Credit worth up to $1,000 per qualifying child. Our proposal would increase this tax credit to $2,500 per qualifying child, credited against the sum of parents' income tax and payroll tax liabilities. This week, more evidence came to light confirming that this proposal would bring valuable relief to working families in Utah and across the country. A new analysis by the Sutherland Institute found that "the Rubio-Lee proposal will bring significant economic benefits to low-to-middle-income and/or rural counties" where large families are common. Those areas include Utah, the Sunbelt, parts of Idaho, and the Pacific Northwest. The expanded Child Tax Credit would benefit all working parents, but it would be valuable especially to low- and middle-income parents as a percentage of their income. While a $2,500 credit is helpful relief to the family making $250,000, it is much more valuable to the family making $50,000 a year. The Sutherland Institute confirmed this common-sense understanding of our proposal. It found that an expanded Child Tax Credit would have a relatively greater economic impact "in lower-to-middle-income counties (measured by AGI) . . . than in higher-income counties," as measured by percentage of aggregate gross income. Overall, the analysis concluded that the expanded Child Tax Credit "both strengthens families and encourages economic equality." Congress should take that finding to heart as it begins the necessary work of fixing the nation's unfair tax code. Too many families are paying too much under the current code. We owe them a better deal for their hard work. Washington, D.C. Office 361A Russell Senate Office Building Washington, D.C., 20510 Phone: 202.224.5444 Fax: 202.228.1168 Salt Lake City Wallace F. Bennett Federal Building 125 South State, Suite 4225 Salt Lake City, UT 84138 Phone: 801.524.5933 Fax: 801.524.5730 St. George Office of Senator Michael S. Lee 285 West Tabernacle, Suite 200 St. George, UT 84770 Phone: 435.628.5514 SaveSaveSave SaveSave SaveSaveSave Save Save Save Save This message was intended for: xxx You were added to the system October 2, 2015. 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August 4, 2017

"to elevate the condition of men--to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start and a fair chance, in the race of life." --Abraham Lincoln

Chairman's Note: Make the CBO Show Their Work

When Democrats passed Obamacare on a party-line vote in March 2010, the"Congressional Budget Office estimated that by 2016, 21 million people would receive health insurance through the law's exchanges. In reality, just"10 million people did.
 
The CBO's model was off by more than 100 percent.
 
The same"CBO estimate predicted that Medicaid would grow by 17 million enrollees to about 52 million. In reality, more than 34 million people have signed up for Medicaid since Obamacare became law, for a total of 74.5"million recipients today.
 
Again, the CBO's model was off by around 100 percent.
 
Now the CBO wants us to believe, based on the same models, that just repealing Obamacare's individual mandate, without a single dime's worth of cuts to Medicaid, would cause more than 7 million people to abandon their Medicaid coverage.
 
There are good reasons to be skeptical of the quality of healthcare that lower-income Americans receive through Medicaid, but why would 7 million voluntarily give up Medicaid coverage they receive for free? These CBO projections, and others like it, strain the boundaries of common sense.
 
When it comes to topics like the effectiveness of the individual mandate, there are sharp disagreements among experts. That's why, in the academic community, scholars have to "show their work" by publicly disclosing their data, estimates, and analysis to scholarly scrutiny, and most importantly, refinement and improvement.
 
Congress does need a scorekeeper to provide budgetary estimates for the policy changes it considers. But at a bare minimum, that scorekeeper should be forced to show how its models work. Currently the CBO doesn't have to do that. It's a "black box," a secret formula even Congress can't be allowed to see, yet which the House and Senate must treat as if they were handed down on stone tablets at Mt. Sinai.
 
It's an indefensible situation.
 
That is why I have introduced the CBO Show Your Work Act of 2017. This bill would require the CBO to publish its data, models, and all details of computation used in its cost analysis and scoring. CBO would keep its role as official scorekeeper of congressional budget proposals – but now the public and the economic community would be able to see what's going on in all those spreadsheets and algorithms.
 
That is, it would hold CBO to the same standard the American Economic Association's "Data Availability Policy" sets for all academic economists: requiring all paper authors to ensure their data "are readily available to any researcher for purposes of replication."
 
Policymakers need data and data analysis to do their jobs. But to do their jobs well, they need the best analysis. And centuries of practical experience tell us that transparency and replicability are essential to the pursuit and acquisition of knowledge. There is simply no serious argument for insulating the most influential economic modelers in the United States from the academic standards that govern everyone from Nobel Prize-winning physicists to second graders "carrying the one" as they learn long addition.
 
We can do better as a Congress and a nation. We are never going to agree on what the best healthcare, tax, or energy policies should be. But when we make our arguments about the costs and benefits of our preferred policies, we should at least be willing to explain how and why our policies would work.
Making the CBO show its own work would be a great first step.
 
A version of this op-ed first appeared in The"Washington Examiner.

Reducing"Fire Fuel Loads in Our National Forests

Click here to watch video

Issue in Focus: Child Tax Credit 

For many years, the federal tax code has unfairly penalized married couples for having and raising children.

Under current law, workers pay payroll taxes in order to fund old-age entitlement programs like Social Security and Medicaid. Working parents pay these taxes like everyone else while also making large investments in their children.

The average middle-income family spends nearly $250,000 to raise a child to age 17, according to the Department of Agriculture. And that hefty sum does not include the cost of a college education.

This situation is unfair to hard-working parents, who in effect contribute twice to old-age entitlement programs: First through direct tax payments, and second through rearing the next generation of payroll-tax contributors.

I have worked hard for years to eliminate this “Parent Tax Penalty.” The core of my proposal is an expanded Child Tax Credit, as outlined in the"Economic Growth and Family Fairness Tax Reform Plan that I co-authored with Sen. Marco Rubio (R-FL).

Currently, the tax code includes a Child Tax Credit worth up to $1,000 per qualifying child. Our proposal would increase this tax credit to $2,500 per qualifying child, credited against the sum of parents’ income tax and payroll tax liabilities.

This week, more evidence came to light confirming that this proposal would bring valuable relief to working families in Utah and across the country.

A new analysis by the Sutherland Institute found that “the Rubio-Lee proposal will bring significant economic benefits to low-to-middle-income and/or rural counties” where large families are common. Those areas include Utah, the Sunbelt, parts of Idaho, and the Pacific Northwest.

The expanded Child Tax Credit would benefit all working parents, but it would be valuable especially to low- and middle-income parents as a percentage of their income. While a $2,500 credit is helpful relief to the family making $250,000, it is much more valuable to the family making $50,000 a year.

The Sutherland Institute confirmed this common-sense understanding of our proposal. It found that an expanded Child Tax Credit would have a relatively greater economic impact “in lower-to-middle-income counties (measured by AGI) . . . than in higher-income counties,” as measured by percentage of aggregate gross income.

Overall, the analysis concluded that the expanded Child Tax Credit “both strengthens families and encourages economic equality.”

Congress should take that finding to heart as it begins the necessary work of fixing the nation’s unfair tax code. Too many families are paying too much under the current code. We owe them a better deal for their hard work.

Washington, D.C. Office
361A Russell Senate Office Building
Washington, D.C., 20510
Phone: 202.224.5444
Fax: 202.228.1168
Salt Lake City
Wallace F. Bennett Federal Building
125 South State, Suite 4225
Salt Lake City, UT 84138
Phone: 801.524.5933
Fax: 801.524.5730
St. George
Office of Senator Michael S. Lee
285 West Tabernacle, Suite 200
St. George, UT 84770
Phone: 435.628.5514



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