On Monday, the nonpartisan Congressional Budget Office (CBO) issued a stunning report. A Republican measure to repeal and replace the Affordable Care Act (ACA) would lead 24 million people to lose their health insurance within the decade and raise insurance premiums for the elderly and others, among other effects. Cutting government programs for the poor and working class, the bill would net the government $337 billion.
Democrats pounced on the findings to bolster their opposition to “Trumpcare,” while GOP leaders scrambled to spin, downplay, or dismiss the CBO report. House Speaker Paul Ryan (R-Wis.) heralded the savings and said that the findings “exceeded his expectations.” Tom Price, the secretary of health and human services, called the estimates “not believable.” And Newt Gingrich declared CBO “corrupt,” calling for it to be abolished.
How has an agency tasked with evaluating congressional budgets and proposed legislation come to play such a potentially pivotal role over its 40-year history? And how durable is its reputation for objective analysis?
Reputations are not immutable, especially in a town consumed by partisanship. But one key structural feature of the CBO — how its director is selected — coupled with divisions among Republicans over how to replace the ACA might help protect the agency from its most recent critics.
What is the CBO and why does it exist?
The CBO was born of institutional crisis in the 1970s between a Democratic Congress and Republican President Richard Nixon. Fighting to assert and protect its powers of the purse and war, a resurgent Congress passed both the War Powers Resolution and the Congressional Budget Act.
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The latter established a first-ever, unified congressional budget process, including the creation of the CBO within the legislative branch to bolster Congress’s budgetary understanding and ability to act. Lawmakers’ aim was both technical and political: Generate a source of budgetary expertise to aid in writing annual budgets and lessen the legislature’s reliance on the president’s Office of Management and Budget.
The key reason the CBO has maintained its credibility
The CBO has emerged over its history as a neutral analyst of congressional budgets and cost estimates for proposed legislation. What’s especially important is that it is an agent for Congress, not the executive branch.
Unlike executive branch agency heads who are nominated by the president and subject to Senate confirmation, selecting the CBO’s leader is an all-Congress affair. The CBO’s director is appointed to a four-year term by the House Speaker and the Senate’s president pro tem, on the advice of the budget panel chairs.
That means that the director does not always hail from the party of the congressional majority and president, since the director’s term is not tied to the presidential election and midterm elections can shake up party control. The current CBO director, for example, was selected in 2015 by Republican leadership in the House and Senate on the advice of then-budget chair Price. Tough reports from the CBO in such times are more credible because they run counter to what might be expected from a fellow partisan.
Notably, most (but not all) prominent flash points in CBO history occurred during a period of partisan alignment. For example, the CBO’s first director, Alice Rivlin (a Democrat), issued reports to a Democratic Congress in the late 1970s challenging proposals from the Carter administration. In the early 1990s, Robert Reischauer (a Democrat) oversaw analyses for a Democratic Congress that undermined the budgetary pillars of the Clinton administration’s health-care bill. And Douglas Elmendorf (yet another Democrat) issued a devastating CBO critique in 2009 of an early version of the Obama administration’s Affordable Care Act when Democrats led Congress.
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For a relatively young congressional organization, these sorts of interactions, coupled with a nonpartisan staff culture, likely enhanced the CBO’s credibility as a neutral arbiter — immunizing the office from accusations of partisan bias.
Can the CBO maintain its reputation?
Ironically enough, a tough critique of a Republican bill by a GOP-led CBO — coupled with deep divisions across the GOP — might bolster the CBO’s reputation in the wake of its bombshell report on the Republican plan.
Republicans have offered conflicting reactions to the CBO’s report. Critics from within the Trump administration attack CBO competence. But GOP lawmakers’ reactions run the gamut from praising the CBO’s findings on cutting the deficit to encouraging the House to rethink its bill.
These conflicting Republican signals might undermine the White House’s attacks and ultimately bolster the CBO’s reputation for nonpartisanship. If so, we can expect the CBO’s cost estimates to play a role in shaping whether Republicans deliver on their promises to repeal the ACA.
Ultimately, CBO history suggests that even reliably nonpartisan organizations can struggle to maintain their political standing. As Daniel Carpenter’s exhaustive study of the Food and Drug Administration reminds us, institutional reputations are “organizational assets.” CBO credibility and influence will always depend on maintaining its reputation for nonpartisanship, which is never an easy task in ever-polarizing times.