Wanted (Needed): Objective Analysis

As politicians and public leaders across the country try to work to find sustainable, long-term solutions to the major challenges confronting our country, one debate that has largely gone unnoticed is the validity of the data that is used to support each solution. Recently, we have seen politicians and public leaders at all levels propose policy solutions for health care, taxation, and economic stimulus, and it is not surprising to see Democrats or Republicans provide supporting data for their policies that are diametrically opposed to the other side’s data. Given the wide variety of conclusions drawn from the same set of data, how are we to know which solutions are more accurate?

At the core of the debate is the Congressional Budget Office (CBO), which is charged with “[o]bjective, nonpartisan, and timely analyses to aid in economic and budgetary decisions on the wide array of programs covered by the federal budget; and the information and estimates required for the Congressional budget process.”. Both parties have a love/hate relationship with the CBO, promoting their analysis when it favors their position and discrediting it when it doesn’t. To provide data that support their policy positions, each party turns to outside sources, notably liberal or conservative think tanks.

In looking at this dynamic with some of the issues being debated today, neither Republicans nor Democrats were satisfied with the conclusions drawn by the CBO with regard to the possible extension of the Bush tax cuts. In forecasting out a possible extension of the Bush tax cuts, the CBO concluded that the short-term result of the tax cuts would result in an increase in economic output, income, and employment in the next two years. But, based on their modeling scenarios, the CBO concluded that these tax cuts would reduce income and add to federal debt relative to what would otherwise occur by 2020. In short, they concluded that the tax cuts should not be extended; a permanent tax cut or a temporary extension of the cuts would result in a negative impact on the economy.

This didn’t make either party happy. Using their own assumptions, Republicans rely on conclusions detailed by the Heritage Foundation, which claim that expiration of the Bush tax cuts will hurt the economy in the long run . Fundamentally, they believe that tax cuts are always good for voters. The White House, in contrast, wants to renew the tax cuts to all households making under $250,000 a year. Two different conclusions from the same data source.

Another example is the debate over health care reform. The CBO forecasted that the Patient Protection and Affordable Care Act would reduce deficits $143 billion in its first decade. This conclusion was soundly rebuked by the White House as a conservative estimate.

Ultimately, both parties reject the objective analysis of the CBO if it doesn’t advance their desired policies. In the hyper-partisan environment in which our national politics currently operates, we need an independent source of data analysis that can provide us with an objective look at how our possible solutions will impact the country.

But, the writing on the wall indicates that the fight over data, and its legitimacy, will continue. Conservatives, sensing the potential for a Republican majority in one or both chambers, have already advocated for a “reform” of the CBO through “housecleaning”. Whether the Conservative argument that the CBO skews its results in favor of a “big government” approach is valid or not, an independent analytical voice is needed in our policy making process, as long as the assumptions made in the analysis are clear and transparent. To have a common ground for a rational debate on policy, we need the CBO as an independent body to provide our public leaders with an unbiased analysis of the impact of potential laws and spending bills.