The Congressional Budget Office (CBO) is one of President Donald J. Trump’s most powerful opponents in trying to get the Make America Affordable Again Act through Congress.
The CBO has a long history of opposition to conservative reforms.
When liberals want to spend more, the CBO makes estimates that end up far lower than real costs. At the same time, the bean counters at CBO consistently underestimated the growth impact of the conservative tax cuts.
As Steve Moore pointed out:
“When Congress passed the Inflation Reduction Act of 2022, the CBO and the Joint Committee on Taxation predicted the bill would cost about $370 billion. Goldman Sachs later released an analysis that estimated the IRA’s 10-year cost would be $1.2 trillion, according to the CATO Institute.”
You would think a 300% error would discredit the CBO with media, yet it had no impact.
CBO constantly fought with supply-side economists who revolutionized tax policy under President Ronald Reagan, myself and Trump’s first administration.
This pro-spending, antitax cut bias has contributed to the growth of government, the size of the deficits and the steady increase in the national debt.
In the late 1990s, we balanced the budget for four years for the only time in the last century. We did so despite the CBO’s consistently hostile scoring. We just ignored CBO and did what we were convinced would work — and it did.
Tax cuts led to economic growth, while welfare reform led millions to stop depending on the government and go back to work. It was a double win of less government spending and more revenue from people who were working and paying taxes.
Other government reforms led to fewer regulations, more opportunities for investment and innovation, and a dramatically growing economy (nearly all of them were scored terribly by CBO).
Economic growth combined with major reforms and spending restraint led directly to the four balanced budgets. Since the CBO uses a static model, growth cannot be accurately scored. None of the real impact of our budget balancing effort showed up in its projections.
CBO was created in July 1974 as part of a wave of leftwing efforts empowered by the reaction to Watergate and the collapse of the Republican Party.
The liberal, big spending, anti-tax cut bias is a natural part of the history of the CBO. From its beginning, when Alice Rivlin was its first director, the CBO has had a distinct bias toward liberal policies.
Because the CBO prides itself on its assertion that it “provides the Congress with objective, nonpartisan, and timely information, analyses, and estimates,” it has spent a half-century building a totally phony mystique of impartiality. The propaganda media reinforce this pious image since CBO is a liberal institution.
Now, CBO is continuing its pattern of bias with the Make America Affordable Again Act.
National Economic Council Director Kevin Hassett recently pointed out:
“It’s just such an implausible position for them to have right now because, for one thing, the GDP growth assumption that they’re going against is about 1.8%, and I think a more reasonable guess would be 3%. … That gives you $4 trillion more in revenue, which is about the size of the bill.”
With an honest CBO, the Make America Affordable Again Act would sail through Congress.
Further, CBO is not counting the overall economic impact of the trillions of dollars in investments and sales that Trump has been attracting from all over the world.
The trillions of dollars in sales and investment commitments from this month’s Middle Eastern trip alone would increase the GDP for the next decade by enough to make a difference in total outcome — and further reduce the budget.
As Federal Reserve Chairman Jerome Powell recently said, the American economy is so strong that the Fed may have to consider a rate increase.
If he is right about a strong economy, CBO’s low growth projections may be even more wrong than Hassett is suggesting.
No Republican should allow his or her vote to be determined by totally inaccurate, biased CBO manipulations.
The CBO should be replaced. At a minimum, its 250 employees should be required to meet standards of transparency so outside experts can see how they reach their scores.
The current CBO weakens America and makes Congress’s job much harder.
It’s currently the biggest hurdle to making America affordable again.
In 1995, Newt Gingrich became the first Republican speaker of the House since 1953.
