My father used to do professional arbitration as a sideline of his law practice. He taught me a terrific lesson from this experience: “You generally know that you’ve gotten a fair outcome when both sides are equally unhappy with you.” I’m reminded of this wisdom when I see the spotlight being placed on the Congressional Budget Office (CBO) and their assessment of the financial consequences of healthcare reform. The CBO is the traditional whipping boy for whichever party is in power and is trying to drive a fiscal agenda. Over time, the CBO seems to do a good job of making each political party equally unhappy, so, on this basis alone, has probably been a pretty fair and honest servant of the public. The current administration, to its credit, has so far not been excessively critical of the CBO, despite the fact the the Office has been delivering some very bad news in terms of the effectiveness and costs of the major health care proposals.
We’re fortunate to have Doug Elmendorf as the Director of the CBO. I knew Doug in college and followed his work at the Brookings Institute — he’s a highly regarded economist and is carrying on the tradition of independence in his office. I only just realized that the CBO has a “Director’s Blog,” authored by Elendorf and his team. The blog is an invaluable resource for getting plain language, objective summaries of the CBO’s analysis of major policy proposals. This was started by Elmendorf’s predecessor, Peter Orszag, now director of the Office of Management and Budget (OMB). The OMB now has a blog as well, courtesy of Orszag, but this is a much more political office and makes no pretense to objectivity.
While Orszag deserves credit for starting these blogs, the CBO blog, with its greater objectivity, is of much more interest. I’ve added the CBO blog link to my list of sites of interest for “Overspeculation, Regulation, and Economic Policy.” Everyone who cares about the future of the U.S. should read Elmendorf’s post from last week, “The Long-Term Budget Outlook.” The opening sentence of the post:
Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run.
Sometimes honesty is painful.