As prepared for delivery during today’s hearing, CBO Oversight: The Role of Behavioral Modeling in Scoring and Baseline Construction:
Good morning, and thank you for joining us as we continue the House Budget Committee’s series of oversight hearings with the Congressional Budget Office.
Today’s hearing marks the third in our five-part series with CBO.
As I’ve mentioned before, we are conducting these hearings to learn more about how CBO carries out its nonpartisan mandate and to consider potential areas for improvement.
Since its formation in 1974, CBO has been a vital support agency to Congress, providing nonpartisan budgetary analysis and directly assisting the House and Senate Budget Committees.
While CBO was established by the Congressional Budget and Impoundment Act of 1974, the agency has not undergone a comprehensive review since then – more than 40 years ago. The demands on the agency have undoubtedly changed.
CBO’s mission of supporting the congressional budget process remains the same, but as we’ve already learned, expectations of the agency have evolved over time.
So like our last two hearings, we are here to make sure the agency has everything it needs to effectively and efficiently fulfill its mission in the 21st century.
We opened this oversight series with CBO’s director, Dr. Keith Hall, and broadly discussed the agency’s organizational and operational structure—including its staffing, assumptions, processes, and work products.
In our last hearing, we began to explore some of the more technical aspects of how CBO actually crafts the impartial work-products Congress relies on to make informed legislative decisions.
And today, we’ll focus in on how CBO conducts its modeling and scores legislative proposals, including the assumptions made and processes used by the agency’s analysts.
CBO uses models as a tool for analysts to estimate the cost of legislation, project baseline impacts, and produce long-term economic analysis.
In order to estimate the effects of legislative proposals, CBO must make assumptions about the likely responses to new policies.
This is no doubt a challenge, and I know we have a lot to learn today from the experts.
With that, I want to introduce our witnesses, each coming with knowledge and understanding of CBO’s current modeling framework.
First, joining us again today is CBO’s director, Dr. Keith Hall.
Also with us is Dr. Jessica Banthin, Deputy Assistant Director for Health, Retirement, and Long-Term Analysis. Dr. Banthin is here to share her expertise on how the agency practically applies its Health Insurance Simulation model, as well as other models, in the course of cost estimating.
And finally, we welcome Dr. Jeffrey Kling, Associate Director for Economic Analysis. Dr. Kling is here in his capacity as the associate director responsible for maintaining and enhancing the quality and transparency of CBO’s work.
Before we start our discussions today, I want to remind everyone that our goal here is to learn and identify potential areas for improvement at CBO.
CBO is vitally important to the congressional budgeting process, so these discussions are not meant to be one-sided or accusatory.
Throughout this hearing series, CBO has welcomed the opportunity to discuss its work and undergo oversight.
However, it’s certainly fair to acknowledge that CBO’s scoring of legislative proposals has led to those scores being questioned, particularly related to healthcare policy.
But when it comes to recent efforts to repeal and replace Obamacare, the failure of Congress to do so is certainly not CBO’s fault.
However, it is a legitimate reaction of Congress to investigate how CBO, as a congressional support agency, comes to any of its conclusions and scores legislative proposals—including those related to healthcare policy.
Much of the interest in and debate surrounding CBO has been centered on transparency, and these hearings have already enhanced communication between the agency and Congress.
They have also started to clarify CBO’s role in the congressional budgeting process and begun to improve understanding of how CBO does its work.
Without question, there is genuine interest on both sides of the aisle to fix the broken budget process.
And I want to remind my colleagues that CBO is a critical piece to ensure Congress has a successful and fully functioning budget process.
Today, I look forward to hearing from our witnesses and engaging in more productive conversations with CBO.
Thank you, and with that, I yield to the Ranking Member, Mr. Yarmuth.