Republican lawmakers and former President Trump are expressing frustration with the Congressional Budget Office (CBO), a nonpartisan agency that analyzes the economic impact of legislation. They claim the CBO is being political in its assessments, particularly regarding the costs of Trump’s proposed legislation, dubbed the Big, Beautiful Bill.
Recent projections from the CBO show that the GOP’s plans, including extending the 2017 tax cuts, could lead to an increase in federal deficits by around $2.4 trillion over the next ten years. This has sparked backlash from several Republican leaders. House Speaker Mike Johnson, Senator Tim Scott, Congressman Steve Scalise, and Senator Rand Paul have all voiced their dissatisfaction with the CBO’s estimates, suggesting they are inaccurate.
Jessica Riedl, a senior fellow at the Manhattan Institute, noted that the Republicans are feeling embarrassed about the projected costs of their tax cuts. The party, known for its focus on reducing deficits, is now confronted with figures that portray their fiscal policies in a negative light. Riedl pointed out that this situation presents a messaging challenge for Republicans, prompting them to attack the credibility of the CBO.
So, what exactly does the CBO do? It functions like a detailed budgeting tool for Congress, providing estimates on how much proposed legislation will cost. Doug Holtz-Eakin, a former CBO director, explained that the CBO assesses the prices of various economic factors, allowing Congress to see if their financial plans are feasible. However, it’s important to note that the CBO does not make policy decisions; it simply provides the data.
The CBO was created in the 1970s to give Congress an independent source for budget estimates, free from the influence of the executive branch. With a small staff of under 300, the CBO produces around a thousand cost estimates each year. While their projections are not perfect, they are essential for understanding how changes in tax policy might affect the economy.
Holtz-Eakin acknowledged that predicting the future is challenging. Unexpected events can drastically alter budget forecasts, as seen during the COVID-19 pandemic when the deficit surged dramatically. He emphasized that the CBO’s work is not as simple as plugging numbers into a model; it involves complex analysis of economic behavior across a large population.
Despite criticisms, Holtz-Eakin defended the CBO’s objectivity and professionalism. He noted that working there means being prepared for criticism, especially when estimates do not align with lawmakers’ expectations. When Congress is pleased with a CBO score, they praise the office; when they are unhappy, they tend to blame it.
As the debate continues, it remains to be seen how Republicans will address the CBO’s findings and whether they will alter their approach to fiscal policy. The dynamic between lawmakers and the CBO highlights the challenges of budget forecasting and the political implications that come with it.