How accurate is the CBO?

Well, one problem is that the 2011 budget can’t generate $10 trillion in cumulative budget deficits over the next 10 years. That would require the 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, and 2020 budgets combined by definition. The 2011 budget defines spending for 2011. There will be a new one for 2012. An estimate of what one years budget will do for the next ten years is kind of silly, really. As such, it’s a pretty far out estimate. It’s pretty hard to predict much of anything ten years in advance, let alone make a prediction based on the assumption that the 2011 budget priorities for the future will be carried on through three presidential administrations.

From the CBO’s website:

By statute, CBO’s baseline projections must estimate the future paths of federal spending and revenues under current law and policies. The baseline is therefore not intended to be a prediction of future budgetary outcomes; instead, it is meant to serve as a neutral benchmark that lawmakers can use to measure the effects of proposed changes to spending and taxes. So for that reason and others, actual budgetary outcomes are almost certain to differ from CBO’s baseline projections.
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So in other words, if you do something that should stimulate revenues long term, but which will cost money short term, you are going to end up with a WILDLY inflated deficit projection because it can only account for where revenues are right now, but it puts in place the impact of the spending to project outward. Of course, it also doesn’t make any assumptions that we would adjust course as necessary by raising revenues, cutting spending, etc.

@Snarp That is what I first thought too…but apparently next years budget is setting into place “permanent” programs and I hate to use the example of the Health Care Reform that will be part of the subsequent years budgets which is this compounding effect to our deficit that is being reported here.

@dalepetrie Thanks! I should have thunk that part up on my own. Appreciate your effort.

@Cruiser Yeah, but that happens every year, and most of it isn’t all that permanent. The health care system will probably be pretty permanent, the rest of it? We’ll see.

any time

Boy will this headline be an Excedrin Headache for Mr. President though

Keep in mind the Wash Times are very conservatively biased. They want you to think poorly of health care reform, so may be presenting the “facts” in a distorted light.

@cockswain I wouldn’t read the Washington Times if I was completely bored and my fish was wrapped in it.

@Snarp I like to know what the enemy is thinking

@cockswain If you go to the CBO website you can read for yourself what the Honorable Daniel K. Inouye wrote in his blog analysis of Obamas 2011 budget that is exactly the same information presented in the Washington Post article. That is after all where they got their conservatively biased information from. Interesting read too! Here is a smidgeon for you..

CBO’s analysis indicates that if the President’s proposals were enacted:

* The federal government would record deficits of $1.5 trillion in 2010 and $1.3 trillion in 2011. Those deficits would amount to 10.3 percent and 8.9 percent of gross domestic product (GDP), respectively. (The deficit in 2009 totaled 9.9 percent of GDP.) Compared with CBO’s current-law baseline projections, deficits under the President’s proposals would be about 2 percentage points of GDP higher in fiscal years 2011 and 2012, 1.3 percentage points greater in 2013, and above baseline levels by growing amounts thereafter. By 2020, the deficit would reach 5.6 percent of GDP, compared with 3.0 percent under CBO’s baseline projections.

* Under the President’s budget, debt held by the public would grow from $7.5 trillion (53 percent of GDP) at the end of 2009 to $20.3 trillion (90 percent of GDP) at the end of 2020, ....

http://cboblog.cbo.gov/?p=555

This perplexes me b/c the CBO stated the bill would cost (and I’m pulling these numbers only from recent memory) $1.2 trillion, then begin reducing the deficit by $138 billion after some number of years (less than 10). This flies in the face of the numbers on the judge’s blog. In other words, how could it cost $1.2 trillion total, but then we record deficits larger than that for multiple years? It isn’t clear. Either the judge’s analysis is incorrect, or we’ll all be enjoying a tax increase.

@cockswain If you read he blog he states how his final review of the “fixes” qualifies his earlier analysis by pointing out his current review is done based on the new information from the new bill which does in fact cause the numbers to swing in a much different direction.

What is the kicker is what does “slightly differ” really mean? I think you are getting the picture here.

“Our latest report differs slightly from the earlier one because it incorporates the impact of some legislation that has recently been enacted.”
http://cboblog.cbo.gov/?p=555

Now you can see why I am so pissed about this process. We will be lucky if a tax increase is all that impacts our wallets