[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


                    CBO OVERSIGHT: PERSPECTIVE FROM
                            OUTSIDE EXPERTS

=======================================================================

                                 HEARING

                               BEFORE THE

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

            HEARING HELD IN WASHINGTON, D.C., MARCH 14, 2018

                               __________

                           Serial No. 115-12

                               __________

           Printed for the use of the Committee on the Budget
           
           
 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]          


                       Available on the Internet:
                            www.govinfo.gov
                        
                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
30-542                       WASHINGTON : 2018                     
          
-----------------------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, 
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, [email protected]. 
                       
                        
                        
                        
                        
                        
                        
                        
                        
                        COMMITTEE ON THE BUDGET

                    STEVE WOMACK, Arkansas, Chairman
TODD ROKITA, Indiana, Vice Chairman  JOHN A. YARMUTH, Kentucky,
DIANE BLACK, Tennessee                 Ranking Minority Member
MARIO DIAZ-BALART, Florida           BARBARA LEE, California
TOM COLE, Oklahoma                   MICHELLE LUJAN GRISHAM, New Mexico
TOM McCLINTOCK, California           SETH MOULTON, Massachusetts
ROB WOODALL, Georgia                 HAKEEM S. JEFFRIES, New York
MARK SANFORD, South Carolina         BRIAN HIGGINS, New York
DAVE BRAT, Virginia                  SUZAN K. DelBENE, Washington
GLENN GROTHMAN, Wisconsin            DEBBIE WASSERMAN SCHULTZ, Florida
GARY J. PALMER, Alabama              BRENDAN F. BOYLE, Pennsylvania
BRUCE WESTERMAN, Arkansas            RO KHANNA, California
JAMES B. RENACCI, Ohio               PRAMILA JAYAPAL, Washington,
BILL JOHNSON, Ohio                     Vice Ranking Minority Member
JASON SMITH, Missouri                SALUD O. CARBAJAL, California
JASON LEWIS, Minnesota               SHEILA JACKSON LEE, Texas
JACK BERGMAN, Michigan               JANICE D. SCHAKOWSKY, Illinois
JOHN J. FASO, New York
LLOYD SMUCKER, Pennsylvania
MATT GAETZ, Florida
JODEY C. ARRINGTON, Texas
A. DREW FERGUSON IV, Georgia

                           Professional Staff

                       Dan Keniry, Staff Director
                  Ellen Balis, Minority Staff Director
                                CONTENTS

                                                                   Page
Hearing held in Washington, D.C., March 14, 2018.................     1
    Hon. Steve Womack, Chairman, Committee on the Budget.........     1
        Prepared statement of....................................     4
    Hon. John A. Yarmuth, Ranking Member, Committee on the Budget     6
        Prepared statement of....................................     7
    Alice M. Rivlin, The Brookings Institution...................     8
        Prepared statement of....................................    10
    Douglas Holtz-Eakin, President, American Action Forum........    13
        Prepared statement of....................................    15
    Maya MacGuineas, Committee for a Responsible Budget..........    50
        Prepared statement of....................................    53
    Sandy Davis, Senior Advisor, Bipartisan Policy Center........    57
        Prepared statement of....................................    60

 
            CBO OVERSIGHT: PERSPECTIVE FROM OUTSIDE EXPERTS

                              ----------                              


                       WEDNESDAY, MARCH 14, 2018

                          House of Representatives,
                                   Committee on the Budget,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 10:00 a.m., in Room 
1334, Longworth House Office Building, Hon. Steve Womack 
[chairman of the committee] presiding.
    Present: Representatives Womack, McClintock, Woodall, 
Renacci, Grothman, Arrington, Lewis, Smucker, Brat, Johnson, 
Sanford, Ferguson, Palmer, Black, Bergman, Westerman, Yarmuth, 
Khanna, Jackson Lee, and Carbajal.
    Chairman Womack. The hearing will come to order. Welcome to 
the Committee on the Budget's hearing examining perspectives 
from outside experts on oversight of the Congressional Budget 
Office. Before we begin, I ask unanimous consent that, 
consistent with clause 4 of House rule XVI, the chairman be 
authorized to declare a recess at any time. Without objection, 
the request is agreed to.
    Today we are concluding our five-part series of oversight 
hearings on CBO, a nonpartisan support agency that has played a 
vital role in the congressional budget process for more than 40 
years. Established by the congressional Budget and Impoundment 
Act of 1974, CBO directly assists the House and Senate Budget 
Committees and supports the work of Congress with its 
nonpartisan budgetary analysis. Even though CBO has existed for 
decades, this oversight series marks the first time the agency 
has ever undergone a comprehensive review.
    Over the years, CBO's mission of supporting the 
Congressional budget process has remained the same. But as we 
have learned during these hearings, demands on and expectations 
of the agency have evolved. So, while the purpose of this 
series has certainly been educational, it has also helped us 
identify and consider potential areas for improvement.
    At the end of the day we want to make sure CBO has 
everything it needs to fulfill its mandate of supporting 
Congress in the 21st century effectively and efficiently.
    We started this series by discussing CBO's organizational 
and operational structure with the Director, Dr. Keith Hall. In 
a second hearing, we began to explore some of the more 
technical aspects of how CBO actually crafts the impartial work 
products Congress relies on to make informed legislative 
decisions.
    During our third hearing, we took a deeper dive into CBO's 
use of models as a tool in scoring legislative proposals and 
what kinds of assumptions are made in that process. And last 
week, we heard from interested Members of the House who shared 
their ideas for improvements of CBO as well as their 
perspectives on challenges they have experienced when 
interacting with the agency.
    Today we will close out the series. My thanks to the 
witnesses joining us as we do so. n our first panel, we will 
hear from two former CBO Directors who guided the agency at 
different stages in the CBO's history. Each Director was 
appointed during different eras of Congress, and both were 
selected to serve based on their ability to perform the duties 
of that role, not because of their political affiliations.
    We are pleased to welcome Dr. Alice Rivlin, who was the 
very first Director of CBO and served as head of the agency for 
8 years. She also has served as OMB Director and Federal 
Reserve Board Vice Chairwoman.
    Also joining us today is Dr. Douglas Holtz-Eakin, who was 
appointed as Director of CBO in 2003 and led the agency for 
nearly 3 years. He served on the President's Council of 
Economic Advisors. He is currently president of the American 
Action Forum. I look forward to hearing the unique insights Dr. 
Rivlin and Dr. Holtz-Eakin can share about CBO's past 
operations, as well as different challenges faced over the 
years.
    In the second panel, we will hear from budgetary policy and 
process experts who can provide valuable outside perspective. 
Joining us from the Committee for a Responsible Federal Budget 
is the organization's president, Maya MacGuineas. Known for her 
expertise in budget, tax, and economic policy, Maya also heads 
the campaign to fix the debt. Maya's been at the forefront of 
budget issues for years and is able to discuss the importance 
of CBO within the context of a larger budget process.
    Maya is joined by Sandy Davis from the Bipartisan Policy 
Center. Sandy currently serves as Senior Advisor for the 
organization's economic policy project, and he also has a 
wealth of knowledge about the budget process. Prior to working 
at BPC, he devoted more than 30 years of service to CBO, 
including as Associate Director for Legislative Affairs. He was 
the first person to hold that position. Before joining CBO in 
1996, Sandy specialized in budget process at the Congressional 
Research Service.
    Through these CBO oversight hearings, we have learned much 
about the inner workings of CBO and the challenges the agency 
faces as it provides Congress with nonpartisan budgetary 
analysis. Our conversations today will help the committee 
continue to determine actionable solutions for CBO's ongoing 
success.
    As we have considered this very important topic, two 
consistent themes have arisen: the desire to improve the 
accuracy of CBO's work; and the desire to increase transparency 
at the agency. Without question, the simple exercise of having 
these hearings has already enhanced communication between CBO 
and Congress, and I believe this exchange is only made better 
through regular oversight. That means not waiting another 40 
years for a comprehensive review and consideration of how to 
update the agency for the 21st century.
    Before we get started, I want to remind everyone that our 
goal here is to make sure CBO has the tools it needs to 
effectively support the Congressional budget process. 
Especially with the recently formed Select Committee, there is 
genuine interest on both sides of the aisle to have a working 
budget process. CBO undoubtedly plays an essential role to that 
end. I look forward to the conversations ahead and continuing 
to engage in a productive, bipartisan dialogue about CBO.
    Thank you. And with that, I yield to the ranking member, 
the gentleman from the Commonwealth of Kentucky, Mr. Yarmuth.
    [The prepared statement of Chairman Womack follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Yarmuth. Thank you very much, Mr. Chairman. I join you 
in welcoming our esteemed witnesses today, former CBO Directors 
Dr. Rivlin and Dr. Holtz-Eakin, who have both played key roles 
in implementing the mission Congress set for CBO, to be our 
independent, nonpartisan source of information and analysis.
    The truth is Congress simply could not function effectively 
without CBO's budget estimates and analyses. We make decisions 
that impact our entire economy and every family in America, and 
those decisions must be informed by sound data and evidence. We 
created CBO so we were not forced to rely on analysis from the 
executive branch or outside organizations, information which 
reflected their own political agenda. We still need CBO to be 
that unbiased scorekeeper.
    CBO does not make recommendations; they do not take into 
account politics or ideology. They deal in numbers and analysis 
only. The only agenda they have is maintaining their 
independent respected voice, and I appreciate the hard work 
both of our witnesses have done in fulfilling that mission 
during their tenures as CBO Directors.
    I am also looking forward to the testimony of our second 
panelists--Maya MacGuineas and Sandy Davis--who will provide 
viewpoints on CBO from outside the agency. The Committee for 
Responsible Federal Budget has a long-standing reputation for 
budgetary analysis and opinion, and I am pleased to extend our 
welcome back of sorts to Mr. Davis, a former longtime CBO 
staffer, as the chairman mentioned. Sandy has a rare vantage 
point as an outside expert, having spent years on the inside. 
He is in the perfect position to discuss how seriously CBO 
staff take their responsibility to produce nonpartisan analysis 
and how they view the role of the institution they serve.
    Again, I thank our witnesses for coming, and I look forward 
to their testimony. I yield back.
    [The prepared statement of John A. Yarmuth follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Chairman Womack. Thank you, Mr. Yarmuth. In the interest of 
time, if any other members have opening statements, I would 
like to ask for unanimous consent that members submit them for 
the record. Without objection.
    Chairman Womack. I would now like to welcome our first 
witness panel consisting of Dr. Alice Rivlin and Dr. Douglas 
Holtz-Eakin, both former Directors of the Congressional Budget 
Office. Dr. Rivlin and Dr. Holtz-Eakin, thank you for your time 
today.
    The committee's received your written statements. They will 
be made part of the official record. You will each have 5 
minutes to deliver your oral remarks. And Dr. Rivlin, you go 
first. The floor is yours, and we welcome your testimony.

  STATEMENTS OF ALICE RIVLIN, FORMER DIRECTOR, CONGRESSIONAL 
     BUDGET OFFICE; AND DOUG HOLTZ-EAKIN, FORMER DIRECTOR, 
                  CONGRESSIONAL BUDGET OFFICE

                   STATEMENT OF ALICE RIVLIN

    Ms. Rivlin. Thank you, Mr. Chairman and Ranking Member 
Yarmuth and the members of the committee. I am delighted to be 
here, delighted you are holding this series of hearings and 
very pleased to present my views.
    Forty-three years ago, I had the good fortune to be chosen 
as the first Director of CBO. It was a chance to launch a much-
needed Congressional support agency and establish its structure 
and its initial traditions. My colleagues and I worked very 
hard with the then new Budget Committees to create a strong 
nonpartisan CBO and recruit talented, hard-working staff who 
would give the Congress the best budget estimates and analysis 
that we possibly could.
    My most important contribution, I think, to the nonpartisan 
credibility of CBO was insisting that CBO not make policy 
recommendations. We believed CBO should provide objective 
information and analysis. If asked, it would offer an array of 
policy options with estimates of what alternative policies 
would cost and what consequences they would likely have, 
especially for the Federal budget. But it would not presume to 
tell Congress what to do.
    Since then, the CBO has had a string of talented Directors, 
one of them here next to me. But I think the reason that the 
CBO is still performing at a high level after 43 years is that 
congressional leadership, and especially the Budget Committees, 
recognize their need for solid, unbiased budget estimates, and 
have protected the CBO from partisan and special interest 
threats that could undermine its ability to do its job.
    No one needs to tell members of the Budget Committee that 
making budget decisions is extremely hard. Advocates of policy 
changes, including presidential administrations, are routinely 
optimistic--not surprisingly--about what their preferred 
policies will cost and what the consequences will be. 
Policymakers need to cut through the plethora of competing 
claims and turn to a neutral team of experts to answer 
questions like ``What will it cost?'' ``What will the effects 
be?'' That is CBO's job.
    To maintain its credibility and be maximally useful to 
policymakers, CBO needs to be as transparent as possible about 
the methods and models it uses to arrive at estimates and 
adjust its methodology in response to new information and 
estimating techniques. Critics of the CBO often appear to 
imagine that CBO has a vast storehouse of well-documented 
statistical models that can just be plugged in to generate 
estimates of costs and effects of any policy option that might 
interest the Congress. However, Congress often considers 
complex policies that have never been tried before and for 
which no models exist. CBO staff is often forced to reason by 
analogy from fragmentary data about vaguely similar programs 
tried under different circumstances, and to estimate 
interactions among several policy changes that have not 
occurred before.
    Writing up these new methods and models in sufficient 
detail so that others can reproduce them is a time-consuming 
activity that competes with moving on to the next set of 
estimates. Making these estimates is challenging, and the 
customers need to have a realistic view of what can be done. 
More transparency requires more staff.
    One persistent dilemma which has confronted CBO Directors 
since my day is responsibility creep. Although a few Members of 
Congress criticize CBO's performance, many others, and 
sometimes the same ones, are eager to have it take on more jobs 
for more clients. Drafters of the Budget Act back in 1974 
recognized that CBO might become overloaded.
    If the Budget Committees want CBO to take on more 
responsibilities or respond to more requests, they should work 
with the CBO Director and the appropriations committees to make 
sure that CBO has the resources to do additional work without 
reducing its quality.
    I am delighted that the committee has devoted this series 
of hearings to oversight of the CBO. I want in closing to focus 
your attention on two far more important budget challenges: the 
dangers of a Federal debt that is projected to rise faster than 
the economy can grow; and the total breakdown of the budget 
process.
    The burden of the debt will weigh heavily on future 
taxpayers, and it is on track to rise faster than even the 
optimists think our economy can grow. These derelictions of 
fiscal responsibility are not the subject of today's hearing, 
but they are the dangerous elephant in this Budget Committee 
room. I could not sit here in good conscience without drawing 
attention them. Thank you, and I look forward to your 
questions.
    [The prepared statement of Alice Rivlin follows:]
  [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Womack. Thank you, Dr. Rivlin, for your 
commentary. Dr. Holtz-Eakin?

                STATEMENT OF DOUGLAS HOLTZ-EAKIN

    Mr. Holtz-Eakin. Thank you, Mr. Chairman, Ranking Member 
Yarmuth, and members of the Committee. I am quite proud of the 
years I spent as CBO Director. Because of the organization, I 
was privileged to lead a highly professional support agency 
dedicated to providing nonpartisan analysis and scores to the 
Congress. It was and remains a gem in the Federal agency world.
    Having said that, this is my first oversight hearing, 
because as Director, there were none. And I think that is not 
right. Every dollar of taxpayer money should have good 
oversight, and I think it is a beneficial thing to have an 
annual oversight hearing for the Congressional Budget Office, 
if only, back to what the chairman said, to improve the 
understanding of what CBO actually does.
    It is a great forum for communication about current 
activities of CBO, but also for understanding of the methods 
they use, the staffing they choose, the organization of the 
agency, itself. It has remained a first-rate agency for a 
number of reasons, and I want to point out two of the important 
ones.
    One, Alice Rivlin did a spectacular job of setting it up, 
and we all owe her a thanks for the tremendous groundwork that 
she laid in building a nonpartisan support agency. And the 
Budget Committees have served as fantastic curators of the CBO 
for over four decades, and I hope that they continue to do so.
    These hearings I think have highlighted a couple of things 
that I am going to touch on, and then I look forward to 
answering your questions. The first is this desire for greater 
transparency on the part of many people with respect to CBO. 
Here I think it focuses on trying to better understand some of 
the scores that have been introduced by CBO.
    And to my mind, there are two different views of what that 
transparency should look like. The one I would urge the Budget 
Committee to not pursue is the notion that somehow CBO merely 
needs to disclose every model and every data point that it has 
ever touched in order to understand their scores.
    As Dr. Rivlin said, there is not a statistical model for 
every piece of legislation that the Congress dreams up. And, 
indeed, the most important ones are things that are new for 
which there is very little guidance in either the research 
literature, and certainly not a formal model.
    I always remind people that I had to score terrorism risk 
insurance, the Federal backstop, the private property casualty 
insurance industry for an unknown terrorist attack at an 
unknown location, using an unknown weapon. There is no model 
for terrorism risk insurance. Scoring is not modeling. Models 
inform your judgment, but scoring is ultimately a judgment 
exercise.
    So, the kind of transparency that I would encourage is to 
focus on what is currently called the basis of estimate and 
better understand the nature of the judgments that the 
Congressional Budget Office had to make in delivering a score. 
It is just not modeling.
    The second thing about the process that I think is poorly 
understood is it is not a forecasting process. Scoring is about 
ranking competing proposals in the correct order. Which ones 
demand more taxpayer resources and expend more taxpayer 
resources? What is a greater and smaller deficit? That is the 
bulk of the scoring.
    If you wanted to have perfect forecasting, you would 
certainly not tie yourself to a March baseline when the economy 
may have changed dramatically by November when you are doing 
the score. You would update everything and just try to get the 
best forecast.
    Because of the nature of what CBO is doing, forecasting is 
not its exercise; scoring is. There will be inevitable trade-
offs between ranking things consistently and doing the 
projections as accurately as possible. That does not mean CBO 
does not try to get them as close as possible, but it is not 
really a forecasting exercise. And when it is characterized 
that way, I think it gets you off on the wrong foot.
    The last thing I would mention would be the importance of 
communication. I think that CBO communicating effectively the 
nature of the judgments it makes in it scores is an important 
thing for CBO. I think it is also important for the Budget 
Committee and the Congress more generally to communicate to its 
members what CBO does, what it is responsible for--the Federal 
budget cost--and what it is not responsible for--measuring the 
benefits in a proposed piece of legislation.
    The better is the communication between CBO and the 
Congress, the better it will fulfill its rightful role under 
the Budget Act and continue to be a first-rate support agency. 
I thank you for the chance to be here today. Happy to answer 
your questions.
    [The prepared statement of Douglas Holtz-Eakin follows:]
 [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Womack. We appreciate both of you, Dr. Rivlin and 
Dr. Holtz-Eakin, for joining us this morning. The ranking 
member and I have conversed about our subject questions, and we 
are going to defer to the end of this particular panel the 
questions that we will have out of deference to the members of 
our committee who have other things going on and other 
hearings, perhaps, to attend. And so we are going to go 
straight to our members.
    So, with that I am going to yield to the gentleman from 
Ohio, Mr. Renacci, for any questions he may have for our 
witnesses.
    Mr. Renacci. Thank you, Mr. Chairman, for holding the 
hearing. I want to thank the witnesses for your participation 
and your service to our country. I mean, again, what you do is 
important.
    Dr. Holtz-Eakin, in your testimony you mentioned that you 
are concerned the lack of communication between non-leadership 
Members of the House of Representatives and the CBO. I 100 
percent agree with that. As a business guy I am always trying 
to find out where these scores are coming from.
    Do you have any recommendations for how our rank-and-file 
Members could have better communications with the CBO?
    Mr. Holtz-Eakin. If you read the written statement 
carefully you will find none, and that is because I did not 
have a magic solution to this problem. That is the truth.
    I think it is an issue. Members on committees with 
jurisdiction have good access to CBO for the problems they are 
working on; Members who are not, I think, have a more difficult 
time. I would love to promise you blanket access, but CBO has a 
finite number of people and a finite amount of time and many 
demands on them. I think that sort of mission creep is a real 
issue.
    So, to me it seems that the best way to solve this is to 
identify the communication issues. You know, when is it that 
you needed information that you could not get it? And this 
committee is uniquely situated to ask CBO for information. And 
this is the best vehicle for having outreach, I think, to the 
rank and file is to run it through the Budget Committee.
    Mr. Renacci. Still makes it difficult, as you can imagine, 
for Members to make decisions.
    Mr. Holtz-Eakin. I told you, it is not a silver bullet.
    Mr. Renacci. No. I understand. Because it is hard. I 
understand. You have a finite number of Members and employees. 
But you also mentioned in your testimony that CBO provides more 
information on the scores that it provides. You would encourage 
the agency to focus on the desired structure and the basis of 
the estimate within the reports. Can you discuss more what you 
would recommend to provide more transparency?
    Mr. Holtz-Eakin. So, I think that the basic structure makes 
sense. You get a score and it says all right, here is the 
legislation. This is what it does. Here is the tables that tell 
you the budgetary impact. Here is the basis of the estimate. 
How do we arrive at that set of numbers?
    To the extent that you read that and you do not find the 
information you want, it seems to me that you should be 
instructing CBO to say, ``We need to know in the basis of 
estimate more things we care about.''
    So, for example, is this bill likely to require entirely 
new kinds of executive branch administration that will have 
lots of rulemaking, and should we anticipate it? So when Dodd 
Frank passes, should they flag the fact that this is going to 
be an enormous regulatory exercise? You know, what can you say 
about that? That might be something you want to know.
    What are the four key behavioral assumptions that go into, 
you know, our judgment about how this works? The perceived 
dissatisfaction with the scoring must mean that there are 
things people want to know that are not in there right now. And 
I would encourage you to tell CBO what they are.
    Mr. Renacci. Dr. Rivlin, I am going to put you on the spot 
here a little bit. What do you think the proper oversight role 
of the Budget Committee is over the Congressional Budget 
Office? And do you think the House and Senate committees have 
done an effective job to date in providing oversight?
    Ms. Rivlin. Well, I think you are doing it right now. This 
series of hearings was a good idea. I think it is brought out a 
lot of information, and I would encourage you to do it again, 
at least once a year as Doug said.
    But a formal hearing is not the only way to have oversight. 
I mean, if you do not understand something, ask a question. And 
I am sure, you know, a phone call to Director Hall or to 
someone he might direct you to might answer the question. And 
at least in my experience, and I am sure in Dr. Holtz-Eakin's, 
I spent a lot of time communicating with Members and their 
staffs about what we were doing. And I certainly would 
encourage that.
    Mr. Renacci. Again I want to thank you both for coming 
today and participating. And Mr. Chairman, I yield back.
    Chairman Womack. Thank you, Mr. Renacci. Let's go to Mr. 
Khanna, California.
    Mr. Khanna. Thank you, Mr. Chairman. Dr. Holtz-Eakin, this 
White House earlier described the CBO's assessment as, ``Little 
more than fake news.'' Would President George W. Bush or 
President George Herbert Walker Bush have ever referred to the 
CBO as little more than fake news?
    Mr. Holtz-Eakin. I am not privileged in what they thought, 
but they never said it.
    Mr. Khanna. What is your reaction to the President or the 
White House describing the agency as producing fake news and 
saying that it ``favors mandates over choice in competition; 
that it is past predictions have not borne much resemblance to 
reality.'' Are you personally insulted by the White House, 
given that this is an agency you led for a number of years?
    Mr. Holtz-Eakin. I am not easily personally insulted, 
largely because I led the agency for several years. The CBO 
gets lots of criticism because it is in the middle of important 
decisions, and not everyone gets what they want. And that 
criticism has traditionally come from Members of Congress; 
typically from the party of the Director and they are 
disappointed in the Director. That is the empirical regularity.
    The thing I found unprecedented was for an administration, 
a sitting OMB Director, to criticize the CBO in very, very 
harsh terms, and to name in the public staff members at CBO and 
criticize them. I think that is way over the line, 
unacceptable. And I told Mr. Mulvaney that in particular. I 
hope we do not see another repeat of it.
    Mr. Khanna. Dr. Rivlin, maybe you could shed some 
historical perspective, because I know when you were Director, 
you know, President Reagan had disagreements. But it seems to 
me the tone of the disagreements were very different than the 
type of disagreements we see now. And it would be great to have 
your perspective on what those disagreements were and the tone 
of the conversation today.
    Ms. Rivlin. I am generally distressed by the tone of the 
political discourse these days, because it has become much more 
angry and less polite and civil than it used to be. And I am 
particularly distressed by a President who has not just named 
the CBO fake news; it appears to be anything he disagrees with.
    But that said, let me tell one story about the Reagan 
administration. When they first came in, they did not 
understand who CBO was and who they worked for. And they 
immediately attacked--``they'' meaning the staff around the 
President, but not this President, himself--and said, ``We have 
got to get a new Director.'' And the Congress immediately 
reacted. And Senator Dole and Senator Domenici and a couple of 
others who were Republicans called the White House and said, 
``She works for us. She does not work for the White House. And 
that was an inappropriate comment.'' And it ended right there.
    Mr. Khanna. Great point, doctor, although it seems that 
part of your point is that the CBO strengthens Congress's role, 
you know, compared to the executive branch, and gives us an 
equal voice. I guess to either of you, what do you believe we 
could do quickly to help make sure that the CBO does not face 
partisan attacks and is something that is valued by both sides?
    Ms. Rivlin. I think it will always face partisan attacks, 
because there will always be somebody who does not agree with 
what the CBO is saying. If the CBO is saying this bill will 
cost more than its advocates say, or it will not do as many 
beneficial things. So that is part of the furniture. I would 
just ignore that and keep supporting the CBO and using it and 
asking questions about the basis for its estimates.
    Mr. Holtz-Eakin. I would echo that. I think it is 
inevitable that those attacks occur, but they do not have to be 
a thing the people know about CBO. What they should know about 
CBO is the quality of its work and the ability it has to aid 
the Congress to make its decisions.
    Mr. Khanna. Thank you very much.
    Chairman Womack. I thank the gentleman. Let's go now to Mr. 
Arrington, Texas.
    Mr. Arrington. Thank you, Mr. Chairman, for hosting or 
chairing and presiding over these oversight hearings. I have 
found them, as a new member, to be very useful.
    And I would like to ask both of our panelists just a 
general question. That is: if you were the committee of one up 
here, having the experience you have, what would be the one, 
two, or three things that you would change to make this process 
work better and to make sure that we had the most timely and 
accurate impartial information to do our job? Just a couple of 
things from each of you, please. Dr. Rivlin, you can start.
    Ms. Rivlin. Well, I would carefully examine whether CBO has 
enough staff to do the things you are asking them to do and be 
sure that they do. That is not a specific recommendation, but 
it is really important to recognize that their job is 
complicated and it takes quite a lot of people, and they need 
enough people and good people. That would be my major 
recommendation. And then, continue communicating about how they 
do their work and how they can make it more useful to you.
    Mr. Arrington. Mr. Holtz-Eakin?
    Mr. Holtz-Eakin. When I was Director, I thought of CBO as a 
consulting firm whose client was the Congress. And as such a 
consulting firm, it was our job to provide them the information 
they needed to make the decisions that were coming. And if we 
could think ahead and identify the tough things we had to do, 
we could get ready and provide them with what they needed.
    There is a role for you in that as well in providing the 
CBO with the game plan for what you intend to work on so that 
they can in fact do studies. We did many studies on immigration 
reform well in advance of the debates that ensued. We did 
studies of Social Security and prescription drugs in advance of 
the efforts during my tenure to do legislation there. To the 
extent that you can convey to them the information they need so 
they can be ready, that would be fantastic.
    I think there is a real role for this committee in talking 
to the CBO about not only what will be in the score, but what 
would you like in the form of supplementary information. One of 
the pieces of mission drift, as Dr. Rivlin described it that 
has occurred over the years, has been moving past just a table 
with budget numbers to something more about the policy and the 
effects of the policy, whether it is in health or tax or 
whatever--growth, number of people covered, cost of premiums. 
There is been a demand for more information.
    That is fair, but they should be given advance notice about 
the nature of the supplementary information that you would 
want, the presentation of it, so that they can get it right as 
opposed to doing their job and giving you a number, which is 
their job and they will do it. But having to have a lot less 
faith in the nature of that number because they have not had 
time to prepare it carefully.
    Mr. Arrington. You know, I think you could reduce the 
criticism--and you will always get it--and I think we can 
reduce the partisanship on both sides with respect to this 
process where partisanship should be quite frankly eliminated 
to the extent you can, if there was a better record of timely 
and accurate information. So, you talked about subjectivity and 
judgment. How do we get more empirical information and analysis 
to bear and less judgment and less subjectivity?
    And then, who is keeping the scorecard on how many times 
the information and analysis has been accurate and timely 
within a margin of error? I have asked that question. I have 
not seen any scorecard. I do not know if you do not measure 
that how we can make that judgment. And then, you really get 
caught up in sort of he said/she said sort of perspective and 
perception as opposed to what is real in terms of the 
performance of CBO. Some thoughts from both of you guys on 
that.
    Ms. Rivlin. I think that Dr. Holtz-Eakin put his finger on 
it when he drew a distinction between scoring and predicting or 
projecting. And that is an important distinction to keep in 
mind.
    A score tells you: given everything else that we have 
assumed about the budget in the baseline, how will this 
particular piece of legislation affect the deficit and other 
magnitudes in the budget? And those kind of things can also be 
checked.
    I mean, for example, on the original Affordable Care Act, 
CBO overestimated the take-up rate, the number of people who 
would pick up this kind of insurance if offered, which meant 
they also overestimated the cost. Now, that kind of thing means 
you need to readjust your model. But to say they made a mistake 
because the economy changed or because Congress did something 
else that affected the budget, that is not a fair criticism of 
a score.
    Mr. Arrington. Mr. Chairman, my time has expired.
    Ms. Rivlin. I am sorry.
    Chairman Womack. Ms. Jackson Lee from Texas?
    Ms. Jackson Lee. Mr. Chairman, thank you, and to the 
ranking member, thank you for this hearing. And thank you to 
Dr. Holtz-Eakin and, of course, Dr. Rivlin for their presence 
here this morning.
    I, frankly, believe that the Budget Committee is one of the 
most important committees in the Congress, because it is the 
conductor, if you will, of the comings and goings of revenue 
and expenses in what I hope would be an objective manner. And I 
really appreciate your honesty, Dr. Holtz-Eakin, and I assume 
it will be the same for Dr. Rivlin, that a toxic political 
atmosphere is not productive for assessing the needs of the 
American people.
    Let me proceed with questions. I think we have talked about 
that kind of toxicity. I want to pose the question generally of 
tax cuts and the question of revenue and the ability to pay for 
the government. The recent--forgive me for my description--tax 
scam, but the recent tax bill that was passed, so you will 
answer it as a tax bill, was supposed to work towards 
investment by corporate America.
    All the economists have assessed that many corporations are 
using their tax relief to do enormous amount of buybacks. So, 
the question is whether or not it results in investment.
    So, my question to you is how devastating, in the work that 
the CBO would do--which is dealing with the comings and goings 
in many instances as the Budget Committee may ask you questions 
of revenue and expenses--how difficult is it when it has to 
assess that on a growing debt and deficit?
    Mr. Holtz-Eakin. So, I guess there are probably three 
different pieces to my answer. Piece number one would be the 
direct scoring of the bill is the demand of the Joint Committee 
on Taxation. So, issues about how it is scored initially should 
be taken there.
    The second place that would show up is CBO would have to 
and will have to roll into its baseline estimates of the 
outlook for the economy the impact of tax cuts and job act and 
other legislation as passed. And so, they will have to make 
some evaluation of its impact on the economy, both directly and 
through the larger debt that it would entail. And that they 
will put out in this month or early next month, I think.
    And then the third I would say as an economist, you cannot 
make that judgment on the basis of the initial buyback. That 
gets a lot of attention, but that is actually the first 
transaction in money coming back into the United States. What 
matters is the final transaction.
    As you point out, what you want is to have that turn into 
genuine investment in fixed capital or intellectual properties, 
some tangible/intangible property that would raise productivity 
in the economy. You cannot tell that from a buyback. The money 
goes back out into the financial system; someone with 
investment opportunities can then use those funds to make 
investments. The jury is out as to yet how much of that will 
happen. We will have to find out.
    Ms. Jackson Lee. I think the jury is out. Could you follow 
up, Dr. Rivlin, by do tax cuts pay for themselves? You may want 
to follow up with that question. And then, if the CBO office 
was cut by a half, as Republicans wanted, is that helpful in it 
doing its comprehensive work? Would tax cuts paying for itself, 
and following up?
    Ms. Rivlin. Well this tax bill is a good illustration of 
how hard it is for the JCT--and it is the JCT--to estimate 
exactly what will happen as a result of a quite drastic and 
unusually large set of cuts. I think history does not support 
the people who think that tax cuts pay for themselves.
    They may be conducive to higher growth, but not so much 
higher that the tax cut pays for itself. And I think almost all 
economists that I know are agreed on that. Cutting the CBO's 
staff in half would make it much less useful to the Congress, 
and I would urge you not to do that. Thank you.
    Ms. Jackson Lee. Thank you so very much. I yield back. I 
yield back some time.
    Chairman Womack. The gentlelady yields back her time.
    Ms. Jackson Lee. So note it, Mr. Chairman. I yield back 
some time.
    Chairman Womack. Noted. Trust me, noted. As somebody who 
gets to chair the proceedings in the House a lot, very much 
noted. In fact, you caught me by surprise. Mr. McClintock, 
California.
    Mr. McClintock. Thank you, Mr. Chairman. Ms. Rivlin, you 
say that the Budget Committee really needs to focus on two much 
more important priorities; the staggering debt as well as the 
total breakdown of the budget process. I tend to agree with 
you, although as far as the breakdown of the budget process, I 
look at the process as laid out in law. It is very logical. It 
is very thorough.
    But to me there are just two problems with it. Number one, 
there is no imperative to pass a budget, so we very seldom do. 
Because we can spend money just as easily--in fact I think you 
can say we can spend money more easily--without going through 
all of the fuss and bother of the budget process. So we simply 
ignore it. What is your view of that perspective?
    Ms. Rivlin. I think you ought to have a process--and this 
was the original intention in the '74 Act--that forced the 
Congress to look at the whole budget and to say, ``How much do 
we want to spend, not just this year, but over the next few 
years?''
    Mr. McClintock. Right. But we do not have to, because we 
can spend----
    Ms. Rivlin. You do not have to. You should make yourselves 
have to.
    Mr. McClintock. That is my point is that perhaps the way to 
fix the budget process is to say you cannot spend money until 
you have got a budget in place.
    Ms. Rivlin. Yes. And most----
    Mr. McClintock. Let me just add one other thing, and that 
is another reason I think that the budget process is cast aside 
is that if we do go through all of the fuss and bother of 
adopting a budget, the formal appropriations process is 
discharged out of the House, and then cannot be taken up in the 
Senate without 60 votes.
    If you are in the minority--whichever party is in the 
minority--it is much to your benefit simply to prevent the 
appropriations bills from coming up, run us into a deadline, 
and then have a slapdash omnibus or continuing resolution 
instead. Is that also part of the root of the problem?
    Ms. Rivlin. There are a lot of problems, and I am hopeful 
that this new Select Committee will get into exactly those 
kinds of questions. I do not want to opine on the rules of the 
Senate. But I think you need a simpler process that forces you 
to look at the budget as a whole first and maybe make some rule 
like ``no budget, no pay,'' which no labels had advocated, or 
``no budget, no recess.''
    Mr. McClintock. The problem with that is that puts Members' 
personal interests ahead of their public duties, and that is 
always a bad place to go. But again----
    Ms. Rivlin. But you need to force yourselves to do it.
    Mr. McClintock. And again, I think the simple way to force 
it is to say you cannot spend money unless you have a budget in 
place.
    Ms. Rivlin. Yeah.
    Mr. McClintock. And the appropriations bills are taken up 
on the Senate floor by the same vote as the budget, itself; a 
majority, not 60 votes, just to take the bill up for 
consideration.
    Now let me turn to the other area where you say we are 
ignoring a dire problem, and that is the ballooning deficit. 
Now we just passed a major tax reduction. I think it was 
absolutely essential to move the economy forward, but it seems 
to me at the same time that places an added responsibility on 
Congress if we are to do that, then to restrain spending and to 
go through the budget with a fine toothed comb. Would you agree 
that having passed that, that is now our responsibility; we 
have got to restrain spending?
    Ms. Rivlin. Yes, but it depends what you mean by ``the 
budget.'' I would say you have to go through spending and 
taxing.
    Mr. McClintock. Yes. Correct.
    Ms. Rivlin. And the driving force for the long-term 
increase in the debt is not appropriations, which is what the 
budget process now deals with. It is the entitlement, the 
mandatory spending, and the taxes.
    Mr. McClintock. The point, though, is it is spending in 
general, whether it is discretionary or mandatory. Once we have 
spent a dollar, we have already decided to tax it, either now 
or in the future. A future tax is the debt. Debt and taxes are 
essentially the same thing, would not you agree? A debt is 
simply borrowing now so that we tax it in the future.
    Ms. Rivlin. If you decide to spend money, you got to pay 
for it sometime.
    Mr. McClintock. Exactly.
    Ms. Rivlin. But I think the problem with the budget process 
is it only deals with a third of the budget. You have got to 
get the mandatory spending and the----
    Mr. McClintock. The budget process gives us a 
reconciliation process that allows us to adjust all the 
mandatory statutes. We simply choose not to use it.
    Ms. Rivlin. Right. And you are not reviewing mandatory 
spending or tax expenditures.
    Mr. McClintock. Thank you.
    Chairman Womack. We have members coming and going, and I 
believe I am correct when I suggest that the next round of 
questions goes to the gentleman from Virginia 7, Mr. Brat.
    Mr. Brat. Thank you, Mr. Chairman. Thank you both for 
coming in. I taught college economics for 20 years. And so, I 
have been interested in some of the commentary here, and I am 
sure you will all be familiar with the literature between 
positive economics and normative economics. And I think that 
applies, right? Normative has to do with ethics; positive has 
to do with your charter and goals.
    And so, it is interesting, if you are going to do positive 
analysis on scoring and not forecasting, et cetera, I can buy 
that if you stick straight to the game. But then we always get 
into this political bias and the other side, even within these 
meetings we have got former heads of CBO weighing in on what 
are inappropriate comments. And have you ever heard these 
comments before? Those are normative claims coming from the 
head of nonpartisan positive institutions.
    And so, I studied economics and ethics for 20 years. That 
was my area. And so, I always find it fascinating, and that is 
part of what is wrong with this city. So let me just kind of 
connect the dots. It is too complex to weigh in. I do not think 
there is a perfect find. But I think we are all engaged in 
normative activity. I can watch your heads nod yes and no when 
people put their political comments forward, and it is no 
surprise in academia, right? In Harvard, Yale, Princeton, the 
leading economic departments across the country, it is 
predominantly Democrats. Right? And they feed most economists, 
most economists working up here.
    And so, I wish we had politically neutral scores and bias 
and all that, but I do not think we do. I wish it was just 
even. So, let me get at what I am getting at a little bit. So 
if the CBO wants to weigh in, Tom McClintock who just made 
comments, we have 21 trillion in debt going to the kids. Right? 
Intergenerational theft. And there is going to be a burden on 
them.
    And so when we do our scores and our explanations, I mean, 
it would be good to have an analysis of not just the gains that 
you get right now as a political party, right, for 
overspending, but the pain we are inflicting on the next 
generation. They have 100 trillion, minimum, unfunded 
liabilities. Medicare and Social Security are insolvent in 
2034. If we continue to bust the budget, they do not get those 
programs.
    Where is that in a normative analysis and the score when 
you are talking about budgets? These are fundamentally huge 
questions where we are stealing from the next generation. And 
up here it is always just, ``No, we are going to be very 
precise. We are going to do a CBO score. It is very tight and 
narrow. And here's the impact on Obamacare, this, that. The tax 
package does not pay for itself and has a deficit, et cetera.'' 
Very narrow, little questions, but completely abstracted from 
reality and the pain it is going to cause.
    Maybe if you could just go shortly on that, and then I want 
to ask one other question. It seems to me you are connected to 
the normative game whether you like it or not. And as leaders 
in those institutions, you have to not only score the narrow, 
but show the full implications of a policy into the 75-year or 
50-year scenario as well. Dr. Rivlin?
    Ms. Rivlin. I think CBO has done a very good job in 
focusing the Congress's attention periodically and insistently 
on the long run implications of current decision making. They 
do a long run forecast, and the numbers are scary. You are 
absolutely right. We are inflicting a large burden on future 
taxpayers. CBO has been pretty good about that, stressing that.
    Mr. Brat. Doctor?
    Mr. Holtz-Eakin. I guess I politely disagree with the 
notion that the CBO is not providing nonpartisan products. I 
was the first CBO Director to go from the White House to the 
CBO. There were people who flatly said I was a political hack 
there to ruin the place and----
    Mr. Brat. And just to be clear, I did not make that----
    Mr. Holtz-Eakin. Okay. So, I was every day conscious of the 
distinction between normative, what I thought was the right 
thing to do, and doing the job, which was answering the 
questions the Congress asked us in a way that was consistent 
with the research literature. That is what we do.
    Mr. Brat. Yeah.
    Mr. Holtz-Eakin. You should ask them. If your concern is 
what programs will not be available in 2035 ask them. They will 
tell you. And then everyone will know what is at stake. It is 
just that simple.
    Mr. Brat. Right. I am kind of getting at--I mean, doctor, I 
agree with you. Right? You did a good job. You had a good run 
showing on future taxpayers. But who are they? It is a 
political game up here. I think we need to define the actors a 
little more clearly as to who is winning and who is losing up 
here.
    The American people are fed up. Right? From Bernie through 
Trump. Right? They do not think the elites up here get it, what 
is going on in terms of the pain that is being inflicted. I 
will just kind of close on adding to this a broader context. 
What do I got left, a few seconds? One?
    There is a question again on the healthcare, on the NERA. 
How many people are going to lose their insurance versus who is 
going to get better or worse healthcare coverage. I do not 
think the analysis got into any of that. And so, all that we 
get from CBO on that is, you know, this many million are going 
to lose their coverage, but then nothing on hey, the people 
that have coverage have $10,000 deductibles or $5,000 
deductibles and cannot see a doctor, et cetera.
    And if you keep federalizing every program up here economic 
growth was going down, down, down as far as I could see. And 
now, we are trying to crack it open. And so, again, I mean--I 
know. Thank you, chairman. All right. That is it.
    Mr. Holtz-Eakin. Mr. Chairman, can I use the remainder of 
his time to answer that?
    Chairman Womack. I will yield the gentleman a few seconds 
to respond, yes.
    Mr. Holtz-Eakin. This is the issue I was getting at when I 
suggested the committee should think hard about the nature of 
the supplementary information it wants. The CBO's job is to 
estimate the Federal budget cost of legislation. Period. It is 
the rest which is part of the mission creep that you are 
talking about. So, if you are going to let the mission creep, 
provide some guidelines for how it is supposed to be executed.
    Chairman Womack. Mr. Brat, you owe Ms. Jackson-Lee a debt 
of gratitude for taking the rest of her time, by the way. Mr. 
Lewis, Minnesota?
    Mr. Lewis. Thank you, Mr. Chairman, and thank you to the 
panel.
    Chairman Womack. I apologize. Would the gentleman yield for 
a minute? I forgot we have a newly arriving member of the other 
party that is here. Mr. Carbajal, I am going to recognize you 
from California. Sorry for the----
    Mr. Carbajal. It is okay. Thank you, Mr. Chair. Thank you, 
Ranking Member Yarmuth. I am a new Member to Congress. This is 
my first tournament. So I am going to call this for what it is. 
There is very few Democrats up here. So let's just call this 
what it is. It is a partisan hearing to try to discredit the 
CBO because recent scores about the Affordable Care Act did not 
yield the type of result that the majority party wanted.
    That is what this is. Let's just call it what it is. 
Certainly, if it would have yielded a different outcome, you 
would not be here today. So, since you are here I will ask you 
a few questions. But let's just call this what it is. What do 
you see as the biggest threats to the CBO's ability to fulfill 
its mission today?
    Ms. Rivlin. Well, I would differ with your characterization 
of this hearing. I watched on C-SPAN the first one and have 
looked through the others, and I do not think that the 
committee has, in general, been out to get CBO. They have been 
trying to understand what CBO does and how they do it and how 
it can be improved. That is the spirit in which I would answer 
your question.
    The partisanship does not help. The Congress needs to 
understand the information and ask as many questions as it can 
so that it can understand what the consequences of various 
pieces of legislation, including the Affordable Care Act, are.
    Mr. Carbajal. Thank you, Dr. Rivlin. Dr. Rivlin, did you 
sign the letter of July 21st, 2017, letter from former CBO 
Directors on the importance of the CBO's role in the 
legislative process?
    Ms. Rivlin. Yes. We did send a letter when we were 
concerned about the attacks on the CBO.
    Mr. Carbajal. So, you no longer believe that these hearings 
are an attack on the CBO?
    Ms. Rivlin. I think there may be some members who want to 
attack the CBO, but I have not had the feeling about these 
hearings that the whole series was an attack.
    Mr. Carbajal. But the letter you did sign did refer to 
concerns about trying to undermine the nonpartisanship of the 
CBO. Correct?
    Ms. Rivlin. I have always been concerned about that. I have 
been concerned about that for 43 years. We have had a lot of 
partisanship in previous eras, and I was always trying to 
observe the nonpartisan role in the face of some partisan 
attacks.
    Mr. Carbajal. Well thank you for stepping up at least in 
this letter expressing your concerns about the partisan 
attacks. Can you add to the question I asked, please?
    Mr. Holtz-Eakin. I would echo Dr. Rivlin on the importance 
of these hearings, and the tenor at which they have been 
conducted. I am pleased to be here today. This is my first 
oversight hearing. I think it is overdue. I think it is a great 
way to learn about what CBO does and for CBO to learn about the 
general concerns by Congress. That is a beneficial thing.
    I know about the letter. As I said earlier, my concern was 
not that there were partisan discontent with the CBO. That 
comes with the territory. I was appointed by Republicans, and 
they were more disappointed with me than were the Democrats. 
That is the nature of the beast.
    I was concerned that the executive branch seemed to be 
trying to undercut the standing of the congressional support 
agency on which this committee and the remainder of Congress 
relies. That, to me, is unacceptable. You should not let it 
happen. I was not going to let it happen.
    Mr. Carbajal. Thank you. You both have participated with 
panels of economic advisers over the years. Do you think it 
represents a diversity of views?
    Mr. Holtz-Eakin. Absolutely. I both supervised those panel 
meetings; I have been a member as a former Director. There is a 
conscious deliberate effort to turn over the membership to 
represent new views of the performance of the macro economy to 
bring in experts in new issues, such a greater openness to 
global capital flows, for example. And I think they have done a 
very good job of essentially running a shadow blue-chip process 
whereby a consensus forecast can arrive by consulting all 
parties.
    Mr. Carbajal. Thank you very much, Mr. Chair. I yield back.
    Chairman Womack. I thank the gentleman. By the way, the 
letter he references, a 2017 letter, I just want the record to 
reflect that that letter was not in any way or shape related to 
the hearings that have been held in 2018. I just wanted to make 
that clear for purposes of clarity. With that said, let's go 
now to Minnesota, Mr. Lewis. Thank you for patiently waiting. A 
belated Minnesota.
    Mr. Lewis. Yes. Thank you, Mr. Chairman. I appreciate that. 
I, too, am a freshman here. And one of the things I have 
learned rather quickly, especially on this committee, is that 
it seems we are in a situation where those who declare others 
being partisan are usually the most partisan. I am having a 
really, really hard time trying to figure out how we invite the 
esteemed Dr. Rivlin to come as a witness when she was OMB under 
Bill Clinton. Is that right? You were a vociferous critic of 
Reaganomics. Is that fair?
    Ms. Rivlin. Yes.
    Mr. Lewis. Yeah. That is fair. You have been a lifelong 
Democrat. I do not know where the partisanship comes in here. 
If we wanted this to be just a hit job, I would have thought we 
could find a different panel member, notwithstanding your fine 
credentials. I have followed you for many, many years.
    And I will say this as well, that I am old enough. I was a 
lot of fun before running water. I am old enough to remember 
Reaganomics; I am old enough to remember your role as the first 
Congressional Budget Office Director; and I am old enough to 
remember the rather blatant criticism coming from Larry Speakes 
and David Stockman and Jack Kemp and the President, himself, of 
the CBO at that time.
    So, when I hear about the concern over the discourse today, 
I, too, have some concerns. But I am also equally as distressed 
about people hiding behind calling others partisan when they 
are being immensely partisan. I mean, I presume, Dr. Rivlin, 
you are equally distressed as you are coming from this 
President and the White House, you are equally distressed by 
some of these resistance groups and the activities they are 
undertaking today. Right?
    Ms. Rivlin. Well, I consider myself actually I am a 
Democrat, but I am a strong advocate of nonpartisan analysis 
and bipartisan action. And I just hope we can get over this 
crisis of partisanship and have the two parties working 
together for the good of the country.
    Mr. Lewis. And I think we are on this panel, on this 
committee. But I just do not want to let this one-sided 
narrative go forward too far with the entire amount of blame 
headed towards one side of the aisle. We have got irresponsible 
rhetoric, irresponsible actions. We have got groups crashing 
congressional offices, sit-ins daily. We have got antifa out 
there. We have got people who would be the first to criticize 
the CBO had they come out with some other scores, for instance.
    What I am getting at here is if you come out with 1.9 
percent growth rate over the 10 year period, and in fact the 
growth rate has already exceeded that, if you suggest that 
people buying health insurance on the Affordable Care Act 
exchanges is 10 million overestimated, and someone says you 
know what? There might be a problem with the growth model here.
    Maybe we need a little bit more dynamic scoring. Maybe tax 
cuts will not pay for themselves, but they usually garner more 
revenue than some of the critics admit. Maybe that criticism 
has nothing to do with partisanship, maybe it is exactly what 
we ought to be doing up here. Go ahead.
    Mr. Holtz-Eakin. Can I say a word about that?
    Chairman Womack. Yes.
    Mr. Holtz-Eakin. I think it is perfectly fine to disagree 
with CBO in the way you just described. Lord knows I disagreed 
with the staff when I was Director, and I continued to, at 
times, believe they have come down on the wrong side of a 
question from the point of view of the research literature.
    I think it is a very different thing to take something that 
you disagree with and suggest that it is only because they have 
bad motives and they are not professional and try to undercut 
their credibility entirely. Those are two different things. The 
former is fine. It is been going on since the founding of the 
CBO. The latter flares up occasionally, but I think should be 
stopped as soon as possible.
    Mr. Lewis. So, for instance, if you are passing a tax 
reform bill and the critics of the tax reform bill describe it 
as a sop to the rich, gift to your corporate donors, things 
like that, they are not describing ulterior motives in those 
critics?
    Mr. Holtz-Eakin. I am saying it is from both sides of the 
isle, some of this untoward criticism that you describe and I 
agree with. And I do not think, quite frankly that we shine the 
light of disinfectant on one side quite as much as we should. 
That is all I am saying.
    Ms. Rivlin. You are not hearing any of that kind of 
rhetoric from the CBO?
    Mr. Holtz-Eakin. Nope, that is true. And I am not hearing 
it from you.
    Ms. Rivlin. Yeah.
    Mr. Holtz-Eakin. The White House is not the only origin of 
that sort of unfortunate rhetoric. And I think the other side 
needs to be held to that account as well.
    Ms. Rivlin. I think we could all agree that there is 
partisanship on both sides.
    Mr. Lewis. Yes. Thank you very much. I will yield back.
    Chairman Womack. Mr. Johnson, from Ohio.
    Mr. Johnson. Thank you Mr. Chairman. Dr. Rivlin, in your 
testimony you mentioned the dilemma of responsibility for you.
    Ms. Rivlin. Yes.
    Mr. Johnson. What are some examples of how expectations or 
the scope of product acquired by CBO have evolved since CBO's 
authorization back in 1974?
    Ms. Rivlin. Well, there have been a number of 
responsibilities that CBO was asked to undertake, and I am not 
sure that I remember them all. But some of them had to do with 
impact on State and local government--was a responsibility not 
received at the beginning. And at other times environmental 
impact has been suggested as possible responsibility. I think 
the Budget Committees and the CBO together have been sensible 
in saying we will stick to the budget impact of legislation, 
and because that is our primary mission.
    Mr. Johnson. Okay. Dr. Douglas Holtz-Eakin, if CBO 
identifies an error in its scoring, what is the process for 
releasing a revised statement?
    Mr. Holtz-Eakin. If the error is caught during the process 
of scoring legislation? You will communicate with the committee 
staff, typically, and the Members who are sponsoring the 
legislation about what you have discovered. Let them know and 
then you continue to score new pieces of legislation until they 
either pass or until it ends.
    Mr. Johnson. If the score has already been released and 
they discover an error, they communicate back to the author and 
then they release a revised score. Is that correct?
    Mr. Holtz-Eakin. I will be honest, I cannot speak for the 
current CBO Director and exactly what their procedures are 
right now, but it was not a common event. I had one instance 
where this happened and that is what we did.
    Mr. Johnson. Okay. All right. For both of you, what 
suggestions do you have for both Congress and the CBO to 
improve communication and create a better working relationship 
between Congress and CBO?
    Ms. Rivlin. Well, I would say just do it in the sense of 
get in touch with the Director. Talk to him, ask questions, and 
hold hearings like this one. But the main thing is just keep 
asking CBO, ``Well, what was the basis for that estimate and 
can you tell us a little more about it?''
    Mr. Holtz-Eakin. I suggest you ask Sandy Davis on the next 
panel.
    Ms. Rivlin. Yes. Absolutely, you want to.
    Mr. Holtz-Eakin. When I became Director, I came in a 
situation where the sitting chairman of the Budget Committee 
had uttered the phrase, ``CBO sucks,'' and I apologize for my 
language. That is a quote. That is a bad moment. And I 
interpreted that as there is very poor communication between 
CBO and the Hill, for whatever reason the Budget Committee 
feels that way.
    I asked Sandy to take on the job of making sure that there 
was never any surprise or miscommunication about what CBO was 
up to. You might not like what you heard, but you were not 
going to be surprised to hear it and you were going to 
understand where it came from. He did a spectacular job so I do 
not think there is anyone who has worked longer at trying to 
improve this communication than him. And since I made him do 
all the work then, I am going to make him do it now.
    Mr. Johnson. It is amazing what you can do when you 
communicate. Dr. Holtz-Eakin, continuing with you, can you 
share some ideas on how CBO can make information such as 
underlying data and assumptions more widely available while 
recognizing the need to protect the agency's access to private 
data?
    Mr. Holtz-Eakin. Yeah, I think this is one where CBO really 
should be congratulated for the enormous advances in the past 
15 years in what is available on the internet, what they put up 
on the website. The capacity to download spreadsheets that 
underlie the mandatory baseline, the budget outlook, things 
like that. None of that was there. You could continue to do 
that and digitize every written product they have so that the 
underlying data are there. I zero problem with any of that.
    There are going to be things that you cannot digitize and 
distribute. They are going to be our proprietary data, there is 
some of that, and they are going to be assumption. So, you 
know, in scoring legislation you are going to have to assume 
something about how the executive branch behaves and there are 
no models for that. So, those judgments are the things they are 
going to have to write down.
    Mr. Johnson. All right. Mr. Chairman, I yield back.
    Chairman Womack. Mr. Sanford from South Carolina.
    Mr. Sanford. Thank you, Mr. Chairman. I guess I would begin 
with you Dr. Douglas Holtz-Eakin. In 2015, you criticized the 
CBO for not having an official conflict of interest policy for 
panels on outside advisors.
    Mr. Holtz-Eakin. I am sorry I did not hear the beginning of 
that. The buzzer.
    Mr. Sanford. I said in 2015 you criticized the CBO for not 
having an official conflict of interest policy for its panel of 
outside advisors. CBO responded to your criticism by saying 
that they were developing a process in terms of dealing with 
this. I guess my question, since we have had much conversation 
on bias: was that policy ever developed? Where do things stand 
on that now?
    Mr. Holtz-Eakin. To my knowledge they put in place a formal 
conflicts of interest policy; they have a panel of health 
advisors, panel of economic advisors. I guess I would not 
characterize it as a criticism, I thought it would be wise to 
have one because it is easy to criticize them for failure to do 
due diligence in the absence of one. So this just struck me as 
one of those oversights that had not happened over the years, 
and that someone could fix it.
    Mr. Sanford. Sure. In today's political vernacular, that 
would be viewed as criticism, but you can define it however you 
would like. You wrote an op-ed in the Washington Post last 
April on the subject of the President's tax reform proposal, in 
which you state, ``Sailing straight into sovereign debt crisis 
is not pro-go strategy.'' Do you think that we are sailing into 
a sovereign debt crisis?
    Mr. Holtz-Eakin. Yes.
    Mr. Sanford. Based on?
    Mr. Holtz-Eakin. The trajectory in any forecast for the 
U.S. debt is rising levels of debt relative to GDP. That 
finding is not sensitive to either the growth or the budgetary 
assumptions. I mean, it is happening. We are not on knife edge. 
We are headed in an unstable direction so the only question is 
when, not if.
    Mr. Sanford. In that same vain, Dr. Rivlin, you, in an 
interview with CNBC last May suggested that the projections for 
sustained 3 percent economic growth including the President's 
budget proposal were ``very optimistic'' and you went on to 
further more say that 2 percent was much more responsible.
    Since both of you all have alluded to this or commented 
directly on it, if you put the continuum of 3 percent growth 
out there as crazy, impossible, improbable, unlikely, probable, 
likely, or going to happen. Where would you register yourself 
on the 3 percent continuum? Crazy and impossible or could 
happen? Or just give me a probability. You would say. Pick odds 
between one and 100, you would say odds are?
    Ms. Rivlin. I do not want to give you a number. I would say 
it is very optimistic, but let me tell you why I think that.
    Mr. Sanford. Just, in the interest of time, I have 2 
minutes. Give me a probability between 1 and 100.
    Ms. Rivlin. No, I cannot do that. You have--what it depends 
on----
    Mr. Sanford. Let me skip to your coworker then. No, I 
understand a lot of what it depends on, what would you give me 
as odds? Just as a betting man? Again, I am not going to, this 
is informal.
    Mr. Holtz-Eakin. Ten percent.
    Mr. Sanford. Ten percent?
    Mr. Holtz-Eakin. Ten percent.
    Mr. Sanford. Okay. I happen to agree with you. I think we 
are vastly optimistic in terms of our economic forecast, but in 
the 1 minute and 45 seconds I have left, there is been much 
talk of actually doing a budget versus a resolution, something 
less binding. If you were to say, have to have budget versus 
resolution okay, where would you be on that one?
    Mr. Holtz-Eakin. I think there should be a budget. I think 
there should be a single document where the House, the Senate, 
and the White House agree on what will be spent, what will be 
raised in taxes and what will be borrowed. Until then, there 
really is not a budget. You do not have a plan. You just have 
budgetary outcomes and they are usually bad.
    Mr. Sanford. Concur?
    Ms. Rivlin. I agree with that.
    Mr. Sanford. Last question: in some ways I empathize with 
you all. I mean, at times do you feel like neutered academics? 
In that, I mean, there have been study after study after study 
pointing to what you know on the impossibility of us closing 
this funding gap. Now, whether it is on the entitlement side, 
which we have studied to death.
    There have been ultimately, I cannot remember how many 
different panels saying we have to do something. We have to do 
something. We continue not to do something. But, I mean, you 
have seen it over the years under the degree in which Congress 
will study. That which it knows it has to deal with. That which 
you would assign a 10 percent probability to and yet we 
continue to do nothing. And that has to be at some level 
frustrating.
    Similarly, deciding, forecasting out whether its 10 years 
or 75 years, that is a pretty tough thing in the world of 
economics. Any wisdom as to some of the frustrations you have 
developed either with studying things to death or being 
assigned the fairly difficult task of saying what is going to 
happen in 10 years?
    Ms. Rivlin. I am more optimistic than many people, in part 
because I am a veteran of the last time the Congress and the 
President together, and it was very bipartisan, got a surplus 
in the Federal budget.
    Mr. Sanford. Respectfully, the Senate would say that was 
due to the tech bubble and the matter of what became as a 
consequence.
    Ms. Rivlin. No, let me give you my view since I am here. I 
think it was partly good fortune, but it was very substantially 
the rules that the Congress imposed on itself in 1990. This was 
bipartisan, it was President Bush and the Democratic Congress 
decided on the Budget Enforcement Act and enforced them for 
more than a decade. And that held the growth of spending in 
check including entitlements. And that was very important and 
it is harder now. But you need to do something like that again.
    Chairman Womack. Mr. Woodall of Georgia.
    Mr. Woodall. Thank you, Mr. Chairman. Thank you all for 
being here. Dr. Rivlin, I should have invited you to come by my 
office. I am glad we have 5 minutes together today, but I hope 
you will come by and visit with me more.
    Ms. Rivlin. Happy to.
    Mr. Woodall. I want to go back to 1975. When I read the 
debate that Congress was involved in around the creating of the 
CBO, I get the idea that we were creating an adjunct Budget 
Committee staff. In fact, I get the impression that if the 
Senate had not insisted on having its own staff that we would 
not even had a Budget Committee staff. We would have had two 
Budget Committees, both of which relied on the CBO to staff 
them.
    I cannot imagine what it was like to try and build that 
organization up. But as I sit here today, the CBO is the only 
Staff Director on Capitol Hill that comes and testifies in 
front of its committee to tell it, tell the committee how it is 
going to be.
    Dr. Holtz-Eakin just talked about the breath of information 
that CBO releases that is available out here today. There is no 
other committee staff on Capitol Hill that is running their own 
webpage, releasing whatever information they decide is 
pertinent to release. Back in 1975, where you trying to set up 
a completely independent, almost coequal committee structure 
there? Or were you trying to provide Congress with a 
counterbalance to OMB, so that Article I would not get pushed 
around by the economists down at Article II? Dr. Rivlin?
    Ms. Rivlin. We were trying to do what we thought the law 
asked us to do. Namely, create a nonpartisan source of 
information for the Congress and particularly for the budget 
process, that was its own so they did not have to depend on the 
executive branch for estimates. That was the main objective.
    Mr. Woodall. And so, given that for the first time we were 
bringing together all of this intellectual prowess, you know, 
if I call the CBO Director today--and I suspect it would be 
true in Dr. Holtz-Eakin's era as well--and say give me some 
good advice on how we can do thing differently.
    The Director today will say, ``Well Congressman, I am not 
in the business of giving advice. If you want me to analyze 
something, I will analyze it for you, but I would not give you 
advice.'' I cannot imagine when we were creating CBO in 1974 
and 1975 that we were trying to create a structure that 
handicapped you from giving the members the very best advice 
that you could. Could you speak to that?
    Ms. Rivlin. Oh, absolutely. I said in my testimony, I was 
the one who said we should not make recommendations. I think 
that was the right thing. That you need an agency which will 
give you analysis but not tell you what to do. And I have sat 
in rooms like this, any number of times, and said, ``I am 
sorry, Mr. Chairman, I cannot answer that question. I can give 
you options and alternatives, but I cannot say what you ought 
to do.'' And I think that is right.
    Mr. Woodall. Now, given that the entire point of the 
exercise was to create a counterbalance to OMB, I am certain 
that Director Mulvaney is not telling President Trump that he 
is unable to give him good advice and he cannot make any 
recommendations. How are we, as Article I, advantaged by that 
mission statement that you laid out very early on?
    Ms. Rivlin. I have held both jobs. I have been in 
Mulvaney's position and when President Clinton said, ``What do 
you think I ought to do?'' I had an answer. That is a different 
job. You are part of the President's cabinet, you give him the 
best information that you can. But there is no reason why the 
budget Director cannot give advice.
    Mr. Woodall. And help me to understand why that is a 
different job. We created CBO to serve Congress in the same way 
that you are role was to serve President Clinton. How are we 
maximizing the expertise at CBO if we restrict CBO from giving 
its very best advice?
    Ms. Rivlin. Because you have both Republicans and 
Democrats, but Clinton did not. He was a partisan and if the 
CBO is to maintain nonpartisan credibility in this intensely 
partisan atmosphere up here, it has to refrain from giving 
advice on policy.
    Mr. Woodall. And as you look at the CBO as it sits here 
today, does it look as you imagined it would when you were 
setting it up in 1975 or does it look substantially different?
    Ms. Rivlin. I think it looks as though, as I hoped it 
would, although I do not remember what I hoped. But I am proud 
of the way it has developed.
    Mr. Woodall. Dr. Rivlin, thank you very much. Dr. Holtz-
Eakin, you have been very generous with your time to various 
events that I have been involved in over the years. My great 
hope was I was going to go back to the origins of CBO and solve 
many of my problems. Dr. Rivlin has just abused me of that 
notion today, so come back to the start. But thank you both for 
being here. Mr. Chairman.
    Chairman Womack. Mr. Smucker, Pennsylvania.
    Mr. Smucker. Thank you Mr. Chairman. Thank you to both of 
you for being here. Appreciate the chairman scheduling 
oversight hearing in regards to CBO, appreciate the work that 
you have done to both establish and to maintain the 
effectiveness of CBO. I served in a State legislature in 
Pennsylvania where we did not have an equivalent and formed a 
nonpartisan, independent fiscal agency, to do exactly what CBO 
was intended to do. We had to rely too much on the executive 
projections in the budget deliberations.
    So, from my perspective, I think there is are really, 
really important role that CBO is filling and that should 
continue to fill. We can always talk about how to improve it, 
but I think it is, again, very important. You play a very, very 
important role and we appreciate what you have done to advance 
that. I do have a question; we talked about some of the 
frustrations, lack of communication that some members feel.
    Do you think that the way CBO prioritizes is required to 
prioritize requests may lead to some of that? So today, you 
start, I believe with leadership requests, then committee 
requests, and then, if resources permit, you go with personal 
office requests. So I would like to hear from either of you 
whether you think that is working.
    Mr. Holtz-Eakin. I believe it is. CBO is oversubscribed and 
that is the reality. So I know in my time it lead to 
frustration by some members, because they had a bill and it had 
not been scored yet and I would get calls and have to explain. 
It said nothing about our desired relation with at member or 
about the legislation. It was the priorities the leadership of 
other committees had put on us.
    Mr. Smucker. Do you agree with that Dr. Rivlin?
    Ms. Rivlin. Yes. I agree. There have to be some priorities, 
and they are spelled out in the statute. And I think it is the 
job of the Budget Committees to help CBO enforce the 
priorities.
    Mr. Smucker. Change subjects. Dr. Rivlin, I would love to 
sometime talk more with you with your experience----
    Ms. Rivlin. Happy to.
    Mr. Smucker.----having been here in 1974. You know, I look 
back at that and understand that the intent was to create a 
process that works and, you know, as I look back over what we 
have done since then, it clearly is not working, at least in my 
view. And I am interested in learning more about your comments 
in regards to the Budget Act of 1990 and how that lead to a 
balanced budget. But I am new, first term. I have certainly 
come to the conclusion that the process itself is broken and 
needs to be fixed.
    So, I guess, I would like to hear your perspective, Dr. 
Rivlin. You are been here, you saw what was done in 1974: do 
you think we need a complete overhaul of the budget system or 
do you think that we can just make incremental changes to what 
we attempt with the budget control of 1974?
    Ms. Rivlin. I think you can build on some of the 
institutions that were created, including the Budget 
Committees. You do not need to rip it up entirely, start over. 
But you need to think about what are we trying to do here? And 
how can we get a process that will lead us to a responsible, 
long term Federal budget.
    And I worked with the late Senator Domenici most recently 
on a proposal for a budget process reform. I am happy to share 
that. But I think the main things are that the President and 
both chambers have to be involved in a decision about what the 
overall spending and taxing and debt is going to be.
    Mr. Smucker. I agree with that. I have 45 seconds. What are 
some of the biggest take away that we can learn from 1990?
    Ms. Rivlin. From 1990?
    Mr. Smucker. Right.
    Ms. Rivlin. Well, I think the Budget Enforcement Act of 
1990, which was what had the caps on discretionary spending. 
Those worked as long as they were enforced and the PAYGO 
process worked to hold down increases in mandatory spending. 
The problem now is that it is not legislation that increases 
mandatory spending primarily, it is demographics. And that 
requires a different kind of rulemaking to make sure that you 
have enough revenue to pay for the long term entitlements that 
you want.
    Mr. Smucker. Thank you. I look forward to continuing that 
discussion with you.
    Chairman Womack. Mr. Ferguson of Georgia.
    Mr. Ferguson. Thank you, Mr. Chairman, and thank you to the 
ranking member as well. I would be remised if I did not push 
back on my colleague from California who has since left the 
hearing. But I want to push back a little bit on the shallow 
comments. I think it says a lot about his love of opacity and 
his aversion to transparency.
    I think knowledge should be enthusiastically perused in a 
hearing like this and our goal should be to gain as much 
knowledge possible so that we can give CBO direction to give us 
and have confidence in those decisions so that we can make the 
best decisions for the future of America.
    And not to revel in it, and I share your perception 
earlier, that these have been very much some good questions 
that have been asked with a real intent to get at a process 
that we all can have confidence in. Because as we go through 
time, both parties will be in the majority or minority at 
different times, and we want to have confidence in this 
process.
    So, I was also interested in the comments that you made 
about separating out the analysis of the numbers versus the 
policy side of it. I think that sounds good in theory but I 
wonder how accurate that you long term determinations would be 
if you do not take into account some of the changing behavior 
models as a result of the policy. Maybe I was reading your 
comments wrong.
    Because one of the concerns that I have is the accuracy of 
CBO scores at the 10-year mark. We are being asked to make huge 
decisions on information that we do not know what the accuracy 
is going to be at the 10-year mark. Could either one of you 
speak to how you could change the process so that we can have a 
better understanding of the accuracy of the projections at 
years 7, 8, 9, and 10 as we make our decisions.
    And if we cannot get there, would it be a good idea for CBO 
to say, ``At year 7 there is a 70 percent chance this will be 
right, in year 10 there is a 50 percent chance that this will 
be right''? And Dr. Rivlin, I will let you take a stab at that 
one.
    Ms. Rivlin. Nobody can make projections for 10 years. And 
in my opinion, nobody is ever going to be able to make every 
accurate projections for the U.S. economy or pieces of it for 
10 years. There is always going to be great uncertainty. The 
CBO does convey that. It shows range bands of uncertainty 
around longer run projections. But you need a number. You need 
a number.
    Mr. Ferguson. Yet this body and Congress takes that CBO 
score as gospel. And we bet the farm on that number no matter 
which way.
    Ms. Rivlin. Right, but you have imposed that on the CBO by 
making rules--rightly I think--rules for yourself about the 
size of the budget deficit or the permissible increase. And 
then, when you have got a bill, you have got to have a number 
which tells you compared to the baseline, what will this bill 
do to the deficit? And you cannot stand a range, you have to 
have a number. Because it has to add up, and that is a very 
difficult problem. I do not think you can fix it. I just think 
you have to understand it.
    Mr. Holtz-Eakin. I am going to concur. During my tenure we 
put out this fan chart that showed the probabilities of being 
at different points in larger or small deficits and Members of 
Congress asked us to get rid of it. Because they thought it 
made it look like we did not know what we were talking about, 
because we had a range, and they needed a number. So, why give 
us all this extra stuff? It is the decision the Congress has 
made, it is not CBO.
    Mr. Ferguson. So, what you are saying is that we need to be 
honest with ourselves about this and not----
    Ms. Rivlin. Not blame CBO.
    Mr. Holtz-Eakin. You need a number. And CBO, to this day, 
when it writes things, will write things that convey more or 
less certainty in those. If here is a great deal of 
uncertainty, there will be words like ``there is a great deal 
of uncertainty associated with this estimate.'' You should, 
then, not be sure that the legislation solves the problem for 
10 years. You should be watching that.
    Mr. Ferguson. Okay. I yield back.
    Chairman Womack. All right, let's now go to Mrs. Black from 
Tennessee.
    Mrs. Black. Thank you, Mr. Chairman. I certainly do 
appreciate you having these hearings because I think they have 
been very instructive and informational. And I am really 
delighted to have both of you here today. You have been two 
experts that we have turned to on a number of occasions.
    And looking at one of the biggest complaints that I have 
heard about CBO and the frustration for our members is the 
whole transparency piece. I know you talked a little bit about 
that earlier on. Because it is frustrating when you have an 
analysis and you get cost estimates and you get forecasts and 
you do look back and nobody is going to be able to give you 
that perfectly, but we do have to make decisions on those.
    And it is, I think, fair to say that in those instances 
where we believe an assumption is made--especially in a 
behavioral assumption, where you make an assumption that people 
are going to behave in a certain way--and I do not believe 
necessarily that what CBO puts out is the way people will 
behave. Because I have been around long enough to see something 
different about the way people behave. I think that is one of 
the hardest pieces for me to accept.
    And so, what I want to get to is, it would be nice for me, 
when I get that from the CBO to be able to have that 
conversation, that dialogue, so perhaps I could even change the 
mind of the person who said this is the assumption they made.
    Is that possible to do with CBO where having a body where 
there is 435 Members and each of us maybe having a disagreement 
with the way something has been analyzed, that we would have 
that ability to have the transparency, first of all to see it, 
and second then to have that dialogue with whomever it is in 
CBO that may have put that information forward. Dr. Rivlin, do 
you want to start?
    Ms. Rivlin. Well, ideally, I guess, it would be nice if you 
could do that. But you collectively are also saying to the CBO, 
we need a score and we need it by Wednesday morning. And that 
precludes having a dialogue with 435 Members. It is just not 
possible. So, the best CBO can do is to say, ``Clearly, here is 
what we assumed. Here is how we got this estimate.'' And they 
have been doing that, and then you can take it and question it. 
But there will be lots of uncertainty about who is right.
    Mrs. Black. And I may disagree just a little bit, is that 
we do not have an opportunity to even, in their assumptions, to 
be able to know where they got their assumptions from. That is 
not always transparent, and I certainly would appreciate, for 
my sake, that that would be something that we more transparent.
    Mr. Holtz-Eakin. I think these are important issues. As I 
said in my opening statement, transparency is a word lots of 
people use, particularly around CBO these days, and it can mean 
a lot of different things. I mean, there is, what is the 
staffing of it, how much money does it get from the Congress? 
You know, those things should be knowable.
    There is--what are the methods by which CBO does scores and 
they put out descriptions of the steps involved in scoring? How 
do they develop their scores? Then there is the question of a 
particular score. And at least for me, in the moment, when you 
are trying to do all this stuff and the legislation is moving, 
you do not have time to write the best treatise on all the 
different aspects of conflicts legislation.
    For my tenure, that piece of legislation was the 
prescription part D Program, the prescription drug program for 
seniors. So, we put out in the aftermath a detailed estimate of 
the prescription drug bill, so that the Congress would know how 
we thought about it and that we gave them the opportunity to 
come back and do exactly what you said, which is no, that is 
not quite right. So, that is, I think a necessary part of the 
communication--to convey it. And it took another 50 pages of a 
complete publication to get it down. But I thought that was 
important to document what had gone on in that debate.
    Mrs. Black. I will just give you a real quick example and 
then, I know I am not going to have time, but I do want to 
leave this with you all. I would like to know--since CBO and 
the Budget Act has been around since the early 1970s--in your 
opinion, what does need to be done to update from where it was 
in 1974 when the original provision was put out there. But I am 
going to ask you all to send that to us because I know I am 
running out of time.
    But I am just going to give you just a real quick example. 
In one of my bills to defund Planned Parenthood there was an 
estimate that came back from CBO that said that if Planned 
Parenthood were not there that women would not have an 
alternative source to have a birth control and therefore, X 
number of pregnancies would occur and all of those babies would 
be Medicaid eligible or they would go on Medicaid.
    And so, the score on that was just astronomical. I do not 
believe that women are not smart enough that if one places 
closes down, you would go to another place to get a service, 
number one. And number two, I do not think that every baby that 
unnecessarily was born, if they did not have a birth control 
from that particular agency would, necessarily go on Medicaid.
    So, I am just giving you an example of a frustration for me 
that I think would have been better if I could have had a 
dialogue with the individuals that were giving that score. I 
yield back. Thank you.
    Chairman Womack. Mr. Bergman, Michigan.
    Mr. Bergman. Thank you, Mr. Chairman, and thanks to both of 
you for being here. You know, you have heard from quite a few 
of us freshmen and we all are a little bit of freshmen with 
experience in our own way and mine happens to be Federal 
service for 40 years in a Marine Corps uniform. And all that 
means is I have seen a lot of different things over a lot of 
different decades. But I have been keeping notes here on some 
of the commonality of terms.
    One I heard, mission creep, earlier. That is a term applied 
to the department of defense. I heard something to do with our 
role, I would just add it, from the military side, roles 
admissions. We hear that term a lot when it comes to the 
military doing what it needs to do. I heard the term quality 
advice. The chairman of the Joint Chiefs, in conjunction with 
the Joint Chiefs and the Secretary of Defense, give that best 
military advice to the President on what they should do on 
matters of defense. Now, I am going to add a couple here.
    In military terms we have got the fog of war. I would 
suggest you have the fog of scoring because of the fact that 
when you, and no matter how quickly you plan or how long you 
plan, you are going to go into a period where when it really 
starts to hit the fan, and you are actually enacting policy, 
enacting legislation based on a score, there is going to be a 
foggy period that we do not know. Hence the challenges in 
predicting to the 10-year window.
    Why I draw the parallel with the military is right now I 
think, and everybody in this room would arguably agree, the 
confidence in the United States military to actually carry out 
its missions. Because we have now, for the first time in a long 
time, taken a force that is been stressed for a period of a 
decade and continually at some level of conflict.
    We have a military that is held in high esteem throughout 
the United States because of the fact that it does its job. It 
completes its mission. It is not perfect because of the fog of 
war. So, that credibility that the United States military has 
is highly, you know, rated amongst all of here in the country.
    So, Dr. Rivlin, you have said, ``undermining the 
credibility of the CBO when policymakers need it most harms not 
only Congress' ability to do its job, but also the long- term 
effectiveness of political parties in addressing the challenges 
that face our country's future.''
    So, using that idea of credibility, what should this Budget 
Committee do to support the CBO's mission while we conduct our 
oversight? Give me some points, if you would, please.
    Ms. Rivlin. I think you are doing it in this series of 
hearings and in continuing to ask the CBO for information about 
its methods and how it arrives at estimates and listening to 
their answers. I think that is the primary thing that you can 
do. And then, not to imagine that the CBO is going to be 
perfect but to use what information they can give you, and then 
get on with budgeting, which is, after all, your job.
    Mr. Bergman. Thank you. I am thankful that you used those 
terms because one of the things that I believe we, as an 
Oversight Committee, but also as a Congress, one of our 
challenges is to have the Monday morning quarterbacking going 
on within the media at halftime and, in other words, comparing 
the CBO score to what we proposed and all the back and forth of 
that, we are not at the end game yet.
    So, the question is how do you, as the CBO I guess, maybe 
review your game films, if you will, or your mission in such a 
way that when what you say is misinterpreted or taken to an nth 
degree, as opposed to the reality of the uncertainty.
    In other words it is gray, not black and white, how then do 
you convince those, the American public and the Congress that, 
hey, we got this right but we did not get that right and we are 
going to move forward. And again, in the military, not let that 
happen to us twice. And I see I am out of time, but if you want 
to reply to that, you have 5 seconds.
    Ms. Rivlin. I think you said it well and I think CBO tries 
to do that. To say, when they did not get something right, and 
how they are revising their next estimate in light of that.
    Mr. Bergman. Thank you. I yield back.
    Chairman Womack. I thank the gentleman. The ranking member, 
Mr. Yarmuth from Kentucky.
    Mr. Yarmuth. Thank you very much, Mr. Chairman. Thank you 
both for your testimony. I think it is been very helpful today 
and kind of puts a finishing touch, to a certain extent, on a 
very productive series of hearings. I do not want you to infer 
that the lack of my Democratic colleagues in attendance today 
indicates a lack of interest. I think many of them were up half 
the night watching what was going on in Pennsylvania. We have 
had better participation in other hearings.
    You know, I am very honored to serve on this joint 
committee lead by our chairman, Mr. Womack, and also with Mr. 
Woodall and others. And one of the things that I know is, while 
it may not be a prevailing attitude among the group there, it 
certainly has been expressed by some, is that what we have in 
our broken budget process is not a structural or procedural 
issue as so much as a human issue. And, clearly, I think there 
is a lot of validity to that. And the human issue also implies 
a lot of political element as well.
    But it seemed to me that there are probably some things 
that we might be able to do to kind of effect the human aspect 
of the budget problems. One of them, and I am going to throw it 
out and ask for a response, and I witnessed that discussion.
    I talked to the chairman about this. That one of the things 
that seems to have corresponded roughly to a breakdown over the 
last decade or so over the budget process, seems to correlated 
with when we need earmarks. And ending earmarks, I think, took 
away a lot of the motivating aspects of getting a budget done 
and doing it seriously. Do either of you have an opinion on the 
issue of earmarks on our budget process?
    Ms. Rivlin. I think the earmarks were a useful tool in a 
negotiation. And here I am not speaking as a former CBO 
Director, because CBO was not involved in this really at all. 
But when I was budget Director, certainly there were a lot of 
times when the administration wanted to get something through, 
like our budget reduction package, and it was important to have 
a courthouse or something else to offer that round up the 
votes.
    Mr. Holtz-Eakin. I concur with everything I know--I was not 
in that job and I have not done those negotiations but everyone 
says they are important. For the Budget Committee, I think the 
issue is will the budget reflect that earmark in a transparent 
fashion? If something is in a bill and it is voted on the floor 
of the House and the floor of the Senate and signed by the 
President, I do not view that as an earmark. That is now a 
matter of national policy and there is no problem with that.
    So, I think you need to sort of just make sure that the in 
the dead of night phone call earmark does not come back, that 
is not good budgeting. The rest, think about.
    Mr. Yarmuth. We talk about them, and we have had 
discussions about this for years and years and years. The 
problem of long term forecasting and long term budgeting and in 
many cases, in the budget process--and in the appropriations, a 
lot of legislative process as well, we have gotten around it by 
certain gimmicks. For instance, in the tax law, we let the tax 
cuts expire after a certain number of years so they could get 
under the limit. The $1.5 trillion debt limit of the bill and 
we have done gimmicks on both sides. You know, putting it on 
the revenue side saying we are going to sell oil from those 
strategic petroleum reserve and that is how we comply with 
PAYGO rules.
    And I am wondering whether, because we do things that are, 
I would say, somewhat at lease disingenuous if not dishonest, 
when we do some of this. And Dr. Rivlin, I think you are the 
first person who has actually mentioned the word PAYGO in all 
of these series of hearings and you favor it, but are there 
downsides to the PAYGO rule in the sense that they may 
encourage the kind of gimmickry that we see too often?
    Ms. Rivlin. Well, I think there will always be gimmickry. 
But you do need rules and you need to take them seriously. And 
the PAYGO rule in the Budget Enforcement Act of 1990 was a very 
useful tool for keeping both Congress and the administration 
from proposing either tax cuts or big entitlement increases 
that were not paid for that increased the long-term deficit.
    I have sat in the Oval Office and said to President 
Clinton, ``You cannot do prescription drugs, we could not pay 
for it.'' Now, President Bush eventually did. But as long as 
the PAYGO rules were in force, they held down long run spending 
and tax cuts as well.
    Mr. Yarmuth. And I know this--oh sure, doctor. I am sorry.
    Mr. Holtz-Eakin. One observation on PAYGO rules, which is 
that PAYGO is good for stopping the problem from getting worse 
but it does not ever fix the problem. We are now at a point 
where you need to fix the problem. And so, something different 
than PAYGO is going to be needed.
    Mr. Yarmuth. Thank you. And this, obviously does not have 
much to do with CBO but it does have to do with our budget 
process and Dr. Rivlin, as OMB, you would have dealt with this, 
and the question is timing. We begin the budget process, at 
least in the House it seems to me, and I have been on the 
committee for 10 years now, we generally begin it in March. And 
we expect that process to finish very quickly so that the 
appropriations committees can do their work.
    Last year, I think former Chairman Black, we finally did 
our budget work in July which basically made it the idea that 
we were going to get any kind of action out of the Senate and 
coordinate it was a moot issue. My question is, and you know, 
we, obviously we wait for the presidential budget to come out 
and this year that was late because, or last year was late 
because of the first year of the administration.
    My question is, would it make any sense from your 
perspective that we actually started the budget process at the 
beginning of the fiscal year instead of waiting until February 
or March? Because, we all know what happens around here in 
January and February, and we work very few days and we have 
State of the Union and we have retreats and all of those 
things. Does that make any sense to you?
    Ms. Rivlin. Every other year it will be a different 
Congress, that is the main problem I think. I mean, starting 
sooner is always a good thing, so you are ready to go in 
January. But the important thing, if you are going to take the 
budget process seriously is to get the budget resolution done 
early so that you can then proceed to appropriation.
    Mr. Yarmuth. Well, I am going to yield back my time because 
you have been very generous with your--oh, Dr. Holtz-Eakin.
    Mr. Holtz-Eakin. I guess, this goes back to some things we 
have talked about earlier this year which is, one of the things 
that is in the gap between the President's budget and the 
budget resolution work is CBO's rescoring of the President's 
budget. They look at it and that has now, overtime, taken on 
greater and great dimensions including a macroeconomic analysis 
of the President's budget, started under my tenure. So if you 
want to speed things up you are going to have to think about 
the scope of what you ask in order to get everything done.
    Mr. Yarmuth. Thank you very much. I yield back, Mr. 
Chairman.
    Chairman Womack. Thank you gentlemen. All right, we are 
almost at the conclusion of this particular panel. I have got a 
couple of questions I want to ask. You know, Dr. Rivlin, at the 
end of your testimony this morning you made some comments about 
the debt, which I truly appreciated your thoughts on it.
    To me, it is a fascinating topic. You know, we had our 
behavior modeling hearing with CBO recently. The one thing that 
I guess we are not really good at modeling is the politics of 
an issue.
    And in this particular case, the fact that we all know, if 
we have an honest conversation with ourselves, that the issue 
is not what we appropriate. It is not the discretionary 
spending of the Federal Government, that piece is getting 
smaller and smaller every year. The downward pressure is coming 
from the mandatory side, and we just are not able to have that 
political discussion satisfactory to render a decision.
    I have always been amazed at how many people say yeah, we 
just need to take politics out of some of these issues. Take 
politics out of apolitical process, which is all but 
impossible, but a fascinating topic. To me, it seems that the 
only real way to constrain Congress on matters of spending, to 
the extent that we see them today, and moving on a trajectory 
that is terribly unsustainable, is that to enshrine into the 
Constitution the notion that Congress shall not spend more than 
it brings in. Your thoughts?
    Ms. Rivlin. The trouble with a balanced budget requirement 
year-by-year is that it would be very counterproductive at 
certain moments when the economy was in recession for example. 
Or when you had to go to war suddenly. You do not want that. 
And to write a requirement with a lot of exceptions--my late 
friend Charlie Schultze used to say--by the time you are 
through, you are writing algebra into the Constitution. And 
that is the basic problem.
    I think the only solution is not a balance budget 
amendment, but sitting down together as we did in the Simpson-
Bowles Commission, Republicans and Democrats, and going through 
the numbers and saying, ``How do we bring these two lines, the 
rising spending line and the static tax line, together?'' It 
has to be, you have to think about both sides. Not just the 
spending. But reasonable people can do that. We had very good 
discussions in Simpson-Bowles and came up with a pretty good 
plan.
    Chairman Womack. Will it require caps on spending? 
Mandatory spending as an example?
    Ms. Rivlin. Yeah, you could. And I think that actually 
would be a good idea for the Congress to have a plan, what do 
we want mandatory spending to look like, and then review it 
every once in a while to see whether you are off track and 
decide what to do. But it still comes back to the political 
problem that you will have different views about spending in 
taxing, and you have to resolve them.
    Chairman Womack. Dr. Holtz-Eakin, the Select Committee that 
Mr. Yarmuth referenced, is going to undertake a process that we 
hope, realizing hope is never a method, but hope that it will 
yield a result that will be good for our country and good for 
the process. Is biannual budgeting an outcome that we should 
seriously take a look at?
    Mr. Holtz-Eakin. You would not have to because it is 
effectively what is going on right now. Typically, a budget 
resolution is not passed during election years and you are 
doing biannual budgeting. So if you are going to do biannual 
budgeting, think about how to do it well. And, you know, I 
thank both you, Mr. Chairman and you, Mr. Yarmuth for leading 
this effort. This is something I think is very important at 
this point in time.
    To my eye, there are two distinct problems that stand out, 
one is the appropriations process and the sort of shutting of 
the government brinksmanship and how do you get the process 
back to what it was originally intended. And the second is 
entitlement spending. And I do not think it makes sense to try 
to rework the entire budget process, build on institutions as 
Dr. Rivlin recommended. But focus on those as the two things 
were you have to make it better politics to get the 
appropriations done and to get entitlement spending on a 
sustainable track. That is really it.
    Chairman Womack. You made a comment a minute ago about 
PAYGO and the tweak to the '74 process. I kind of label it or 
categorize it as giving first aid to a process when the patient 
really needs some major surgery. I think we are now at that 
stage where we may not have a terminal case, although the glide 
path demonstrates otherwise. But we do not need a Band-Aid any 
more. We do not need first aid. We need some kind of major 
circumstance, do we not?
    Mr. Holtz-Eakin. The outcomes have to be dramatically 
better. You are a better judge of what changes in the process 
will do that. Every CBO Director has hidden behind Rudy 
Penner's priceless phrase which is, ``the problem is not the 
process the problem is the problem.'' And the problem is now 
here, it is not a long-term budget problem, it is large, and it 
is extraordinarily consequential for the American future. What 
process gets that addressed is really hard to say but we have 
to do something different.
    Chairman Womack. Dr. Rivlin, a comment?
    Ms. Rivlin. I agree, and I think the main thing is to sit 
down and say what is the problem? The problem is rising debt. 
What are the things we can do about it? And you know what those 
are and I submit that there have been, we are doing a lot of 
spending through the tax code as well as direct spending, and 
how do we bring those two lines together? Those are political 
questions but if the two sides have the will to solve the 
problem, you can do it.
    Chairman Womack. Very good. I am going to yield the balance 
of my time for purposes of this panel, and I would like to 
yield to a couple of members who are late arrivals that were 
here earlier and had to go for other reasons. Mr. Grothman of 
Wisconsin, I will recognize you first.
    Mr. Grothman. First of all, we are honored to have you 
folks here. I never thought 20 years ago that someday I would 
get to ask Alice Rivlin a question, so I am very honored. You 
just put up something that was kind of interesting. You are 
right, we do a lot of spending on the tax code. Do you think, 
and of course that spending as a practical matter becomes 
mandatory spending, correct?
    Ms. Rivlin. Yeah.
    Mr. Grothman. Do you think that mandatory spending through 
the tax code should be reclassified as discretionary spending?
    Ms. Rivlin. I think it should be the object of periodic 
congressional scrutiny, whatever you call it. And that goes for 
the mandatory spending for entitlement programs. You have to 
take a look at this every once in a while and say is it too 
big?
    Mr. Grothman. Well, I guess it is obviously too big. And I 
can argue that we would be better with mandatory spending and 
better with discretionary spending. I will ask you that 
question. I mean, there is a feeling around here that we ought 
to have to vote on mandatory spending all the time. But at 
least hypothetically, if one party has both houses, we can do 
something about mandatory spending. We cannot touch 
discretionary spending, correct?
    Ms. Rivlin. Well, you do touch discretionary.
    Mr. Grothman. We can, but in this regard I will say: it 
seems to me that as a particle matter, with discretionary 
spending which is going through the roof in this year, we have 
an informal agreement that military and nonmilitary spending 
will go up and down together.
    So, as of what is happening right now, a group of 
Republicans, I believe, demanded a big increase in defense 
spending and because you could not get a big increase in 
defense spending without a big increase in nondefense spending 
as well. Do you believe that is accurate and do you believe 
that is a problem?
    Ms. Rivlin. No, I do not want to make a judgment on that. I 
think that you did, there was a strong reason for increasing 
the military spending. I think there is a strong reason for not 
cutting anymore and probably increasing domestic spending as 
well, but that is just my own judgment. The basic problem is 
not the long-term increase in discretionary spending. If you 
want to do something about the rising debt, that discretionary 
spending is not going to help you.
    Mr. Grothman. See, and here I idolized you. Because, see, 
that is why this budget is bad, because they are people have 
drilled into people around here that discretionary spending 
does not count so we are borrowing 20 percent of our money and 
we are increasing discretionary spending by 10 percent this 
year because mandatory spending is more important, like it does 
not matter that we are increasing discretionary spending by 10 
percent. Do you want to comment on that doctor?
    Mr. Holtz-Eakin. I will also avoid drawing judgement on the 
nature of the political deal that was cut, whatever that might 
be. I think from a Budget Committee perspective, there are 
several lessons here. Lesson number one is that currently 
discretionary and mandatory spending are on equal footing and 
if you really believe a dollar is a dollar and that equal 
policy options should be weighed on a level playing field, you 
have to address that.
    You have to change that in some way. If that dollar is a 
refundable tax credit, and it really just spending, in my view, 
it should be labeled as mandatory spending, brought over to 
that side, and showed the real picture for the resources that 
are going out. So, leveling that budgetary playing field and 
identifying everything on an even keel, I think, is the 
objective.
    The second thing is there is a very uneven review process. 
Every year for discretionary in principle and almost never for 
mandatory. So, you need to fix that. You have to get the 
mandatory programs regularly reviewed if not every year.
    And the third is caps, however desirable they might be from 
making the budgetary outlook look better, are not a policy. 
They are saying, independent of what our policy objectives 
might be, this is how much we are going to spend. That does not 
make a lot of sense.
    So, in situations where you develop a policy, and that is 
what the President's budget is supposed to do, you have an 
national defense strategy and you fund it, you now know what it 
costs for that policy, you can have the discussion of whether 
that is the policy this Nation wants. And caps takes that away 
and that is not helpful.
    Mr. Grothman. Okay. I will yield the remainder of my time 
if I have more time.
    Chairman Womack. Mr. Palmer, Alabama.
    Mr. Palmer. Thank you, Mr. Chairman. Dr. Rivlin, glad to 
see you. In 2014, you gave testimony in front of the House 
Committee on Financial Services and you said the following, 
``that the right policy to address the debt would be to slow 
the growth of the healthcare entitlements, get Social Security 
into long-run balance, reform the tax system's traditional 
revenue by broadening the base and lowering the rates, and cap 
the growth of discretionary spending.''
    Do you still believe those four principles are key to 
addressing and eventually lowering the debt?
    Ms. Rivlin. Yes.
    Mr. Palmer. I think that, you know--just for the record--
that is what we have been trying to do for the last year. I 
will say, though, on the discretionary side we are not doing 
very well. Dr. Holtz-Eakin, good to see you.
    Mr. Holtz-Eakin. Good to see you.
    Mr. Palmer. I have been working on the regulatory side of 
things and we have seen estimates as high as $1.9 trillion in 
terms of what overregulation is costing the economy. In the 
last 18 months, we have done quite a bit to get rid of the 
obsolete, the redundant, the contradictory regulations. Has 
anyone taken a look at how regulatory reform impacts economic 
growth and given any projections on how it will impact Federal 
revenue?
    Mr. Holtz-Eakin. I have not seen those estimates. I will 
concur that there has been an enormous change in the regulatory 
burden and the growth of regulatory burden in particular. I 
have to believe that directionally it is going to improve the 
overall performance of the macroeconomy, but that is an area 
where the research literature provides very little guidance as 
to the actual magnitudes.
    Mr. Palmer. Is there any way to include that in estimates 
for impact on the economy and particularly on revenue? Are we 
just going to have to learn by doing, or?
    Mr. Holtz-Eakin. I believe there are ways. I have thought 
about this problem a lot. There are none that are easy and that 
are to the sort of degree of maturity that you could just, 
like, between now and a month from now have some estimates of 
the impact. There is a lot of work that needs to be done.
    Mr. Palmer. Before I have to run out, I tried to jot down 
what you said, but you said something about mission creep for 
CBO and certain things being outside their ability to project. 
One of my frustrations has been the CBO's projections on the 
benefit of repealing the ban on exporting crude oil. Their 
projects in terms of revenue generation have been, I think, 
incredibly low. Are those types of things--including the 
estimates on impact of regulatory reform--are those outside the 
ability of the CBO?
    Mr. Holtz-Eakin. CBO certainly has no portfolio on 
regulatory issues. That is one that has been suggested in the 
past, and I have always been concerned about that. I mean, that 
is an enormous undertaking. CBO certainly could not undertake 
it with its current staffing. And I have always been worried 
that you would turn a premier budget shop into a less than 
premier budget-plus-regulatory shop. That would be a step in 
the wrong direction. Have a good regulatory analysis shop if 
that is what the Congress needs.
    Mr. Palmer. Well, my point on this is that in trying to 
deal with the deficit and the debt it is not just reducing 
spending, it is increasing revenues. And I try not to be too 
hard on the CBO, because I--in my years with a thinktank--
worked with the CBO on other things.
    But there has got to be better information, in my opinion, 
that comes out that takes into account these improvements in 
the economy. We have got to do this with revenue growth and 
with spending cuts.
    In that regard, Dr. Rivlin, I want to go back to something 
you said earlier about the way the CBO assumes growth when it 
creates its baseline, evaluates changes to programs, and 
incentivizes further spending. Even when a program spends more 
than it did in the previous year, any change to that program 
that results in less spending, then the CBO projects that it is 
a cut. And I do not quite understand that.
    For instance, on Medicaid expansion. When we--in our bill 
that we passed last year--froze Medicaid expansion, everybody 
was running around saying that we were cutting Medicaid which, 
frankly, that is not a cut. When we were talking about 
requiring able-bodied adults without dependent children to work 
they were yelling ``That is a cut.'' That is not a cut. Would 
you comment on that?
    Ms. Rivlin. Yes. This has been a controversy over 
terminology for a long time. But I would submit, you do need a 
baseline. You do need to ask the question, ``If we make this 
change, how will it change what the budget from what would 
otherwise have happened?''
    Now, you could find another word than ``cut,'' but you do 
need to know what the impact on the budget of changing a law is 
and compare it to what would otherwise have happened under 
existing law. That is just a useful thing to know. And you can 
change the terminology, but you need to know that.
    Mr. Palmer. If the chairman will indulge me just for a 
minute. On that point, I agree with where you are going with 
that. But I think the key is that if we are spending we are 
obligated to spend a certain amount of money and we do not 
spend that--that is a cut. But if it is an open-ended deal 
where it depends on how many people signup, I do not think that 
is a cut.
    Dr. Holtz-Eakin, if you would respond and I will yield 
back. All right.
    Mr. Holtz-Eakin. So you need a baseline and the method by 
which the baseline is created, the rules that are followed in 
doing that projection are laid out in the Budget Act and the 
CBO, in consultation with the Budget Committees, fulfills its 
mandate to prepare the baseline. If you do not like the 
appearance, what you are really saying is, ``I do not like that 
baseline.'' You have to think about looking at the budget and 
deciding if there is a better baseline preparation.
    Chairman Womack. Dr. Rivlin, Dr. Holtz-Eakin, thank you so 
much for your testimony today. I am going to advise members, if 
you want to submit written questions for the record to be 
answered later in writing, please do so. They will be made part 
of the formal hearing. Any members who wish to submit questions 
or extraneous material for the record may do so within 7 days.
    That concludes this part of the hearing. The chair is going 
to declare the committee in a recess for a period of about 5 
minutes so that we can switch out our witnesses and also 
provide for an opportunity for members, like myself, to enjoy a 
comfort break for just a moment. And we will reconvene with our 
second panel here in 5 minutes.
    [Recess.]
    Chairman Womack. Once again, ladies and gentlemen, the 
House Budget Committee hearing is back in session, and we 
welcome our second panel.
    And on this panel, we have Maya MacGuineas, president of 
the Committee for a Responsible Federal Budget, and Sandy 
Davis, senior advisor at the Bipartisan Policy Center. Ms. 
MacGuineas and Mr. Davis, thank you for your time today. The 
committee has received your written statements. They will be 
made part of the formal hearing record.
    You each will have 5 minutes to deliver your oral remarks, 
and Ms. MacGuineas, we are going to give the floor to you. You 
have 5 minutes and the time is yours.

   STATEMENT OF MAYA MACGUINEAS, PRESIDENT, COMMITTEE FOR A 
 RESPONSIBLE FEDERAL BUDGET; AND SANDY DAVIS, SENIOR ADVISOR, 
                    BIPARTISAN POLICY CENTER

                  STATEMENT OF MAYA MACGUINEAS

    Ms. MacGuineas. Okay, well thank you. Thank you for having 
me, and thank you for sticking around because that was a panel 
that covered a whole lot of really good details. And I am 
afraid I will not have much to add that contributes more than 
they were able to. Though, I do have an interesting perspective 
of also being a consumer of what CBO sets out, so that is 
useful. But thank you for holding these hearings.
    I think that they have turned out to be very value-add, and 
we have learned a lot from them. And also, thanks for inviting 
me to come before the Budget Committee, which is my favorite 
committee, and to talk about CBO, which I think is really 
invaluable. Both because of the mission that it has of being an 
independent body producing impartial numbers is so important 
and because of the quality of its work.
    So, having an independent, nonpolitical referee producing 
impartial numbers is certainly invaluable in that it allows us 
to know the cost of policies, adjust them accordingly, figure 
out appropriate pay-fors. The fact that CBO takes no positions, 
as Alice Rivlin was talking about, helps to provide the 
quantitative analysis that then lawmakers can use as they see 
fit.
    So if we were living in an ideal policymaking world the way 
things would work is that we as a country would decide what our 
main budgetary objectives are, we would figure out which of 
them should be done in the public sector and/or at the Federal 
level, we would think about the different policies that could 
achieve those objectives and we would have an honest debate 
about the pros and cons of the policies, we would have those 
policies scored, we would figure out how we would pay for them, 
and we would hopefully pass policies that did not add to the 
fiscal deteriorating situation that we have now.
    So, if you look at the breakdowns in how we should be 
making policy, I think I would first point out I do not think 
the role that CBO plays is where we should be focusing.
    To me, there are a lot of different problems in breakdowns 
of that whole policy area but getting the numbers and the costs 
of the policies and the pay-fors is--everything else 
considered--working pretty well.
    I also think during this time of a really dangerous fiscal 
situation, having fiscal estimates is critically important. 
Right now, our debt relative to the economy is twice the 
historical average. It is twice where we were when we went into 
the recession of 2008, which means if and when the economy 
turns down next, we will have very little fiscal flexibility to 
respond. Probably worse than where we are right now is where we 
are headed.
    We are on track to add as much as $14 trillion to the debt 
over the next 10 years. These numbers have stopped having 
meaning because they are so huge, but they are really 
unimaginable--that we are doing that to ourselves. And then, 
recent legislation--we have made the situation considerably 
worse.
    Our debt is on track to be the size of our entire economy a 
decade from now. So having an agency that scores legislation, 
releases projections, and generates options and their savings 
to address this situation is really critical, particularly at a 
moment like this.
    So, certainly, there are ways CBO could and should be 
improved. One of the main criticisms--clearly, we have talked 
about this a lot in the last panel--is there a need for more 
transparency? And other criticisms include questioning the 
accuracy of the estimates and how CBO prioritizes its work.
    More transparency is certainly desirable, and Director Hall 
has made steps to improve the transparency. And I think there 
is a lot of discussion about if and how there could be more 
that is done there.
    I do think it is worth considering the tensions and the 
tradeoffs when it comes to things like proprietary data and 
information, so that we want to be careful around there. But 
listening to this panel that just passed and the other 
hearings, I feel very confident that people are taking all of 
those issues into consideration. And bottom line, more 
transparency is always desirable when the tradeoffs are not too 
high.
    There are also additional measures that CBO could take. I 
think the idea of doing more briefings with members and their 
staff about their methodologies on things like scoring and 
baselines would certainly be useful. That way, anybody who is 
interested in learning more can come and talk with them about 
how those things are done.
    I mean, it feels like a black box, but it does not have to 
because a lot of what CBO does they actually make incredibly 
accessible. We just have to find ways to link that to the 
members and staff who want to learn more. I think doing more to 
evaluate itself and its track record is certainly useful, and I 
think that they are on track already doing more of that and 
considering doing more.
    Finally, one area I think is really interesting is how to 
provide more analysis for Members who are not in leadership or 
on the committees of jurisdiction. They want to develop 
legislation, they want to iterate with CBO, get scores, figure 
out how things would work, and a lot of times they are 
frustrated because they do not have the access or ability to do 
that.
    So the only way that is going to be possible is if we 
further resource CBO, give them more money. I would be horribly 
remiss if I did not point out that that would have to be paid 
for and should not be added to the debt. PAYGO for CBO would be 
good.
    But as I was driving in this morning, I was thinking how 
much money in this country we spend on politics versus how much 
we spend on policymaking, and CBO can be a real part of the 
policymaking area and particularly if that allows more 
members--those not in leadership, those not on certain 
committees--to be more engaged with the process. I think that 
is a real priority.
    So just quickly; we use CBO's materials, information, 
scores, methodologies when we do outside work. Like, for 
instance, our organization scores the presidential proposals 
during the elections. CBO would not be able to do that because 
they do not have enough information, they are not full-fledged 
proposals. But outside groups can, and we and the many other 
groups that do that rely on CBO's work because it is impartial.
    And it is very important for us, also, not to be 
politicized in the work that we do. So I just want to say that, 
as a consumer, we could not do our jobs if we did not have the 
work of CBO to rely on.
    So every institution can be improved. I think it is really 
important that you are holding these hearings and, again, I 
think they have gone really well. And so, I think we launch 
into assessing the tradeoffs, but at the same time we do not 
lose the importance of having an impartial arbiter and we do 
not lose the focus on the things we need to think about right 
now, which is how to pass a budget this year and how to deal 
with the really dangerous national debt situation that we have. 
So, thank you so much for having me here today.
    [The prepared statement of Maya MacGuineas follows:]
 [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Womack. Thank you, Ms. MacGuineas. Just to point 
out, you did consume more time than you were allocated.
    Ms. MacGuineas. I did.
    Chairman Womack. And with no offset, so----
    Ms. MacGuineas. I will apply PAYGO to my answers, to my 
questions.
    Chairman Womack. Just kidding.
    Ms. MacGuineas. Fair point.
    Chairman Womack. Appreciate your testimony. Mr. Davis.

  STATEMENT OF SANDY DAVIS, SENIOR ADVISOR, BIPARTISAN POLICY 
                             CENTER

    Mr. Davis. Thank you, Mr. Chairman. I just want to make 
clear that I am not going to give any offsets to Maya. I think 
I am off budget, I am not sure. But let me thank the chairman, 
Ranking Member Yarmuth, all the members of the committee.
    I really am honored by the opportunity to come here and 
testify today. It feels a little like a homecoming for me. As 
you all have heard, I have spent many years working at CBO. 
Most of it most closely with a lot of the staff I see around 
the dais, so it feels good to see some friendly faces back 
there and it is a good experience to be here. I appreciate it 
very much.
    I find myself now being the fourth witness in the fifth 
hearing. Basically, as you are wrapping these hearings up, at 
least for now, I concur with everything my predecessors on 
these panels have said. So I will see if I can give it a 
slightly different twist.
    And also, just based on my experience, principally at CBO 
and now as a senior advisor at BPC, Bipartisan Policy Center, 
viewing how other agencies and organizations look and CBO's 
work.
    I also want to add my congratulations to you on these 
hearings. I think these have been done in a very methodical, 
educational way. I think they provided a real service and I 
think that regular oversight hearings are a good thing. Maybe 
you do not need five every year, but regular oversight hearings 
are a good thing, and this was necessary, I think, to get off 
to a good start.
    As I have said over the years, I have had the advantage of 
working both inside and outside CBO and based on that I have 
basically four observations which I want to share with you and 
then I would be happy to answer any questions.
    First, I just want to make clear that along with everyone 
else I firmly believe that a vibrant, robust, and independent 
CBO is absolutely essential to Congress and the performance of 
its Article I duties.
    At the Bipartisan Policy Center, we especially view CBO as 
the gold standard of the budget and fiscal and policy analysis. 
We do not have this view because CBO's estimates are always 
right or we always agree with them, but because of CBO's 
longstanding reputation for objectivity.
    I would like to say, also, you know, that BPC also stood 
strongly against the legislation, the proposals that were 
considered last summer to make drastic cuts in CBO and to 
modify and eliminate the Budget Analysis Division. Those are 
the wrong approaches for dealing with the issues and concerns 
the members have. Some have also advocated the use of outside 
organizations as substitute for CBO and sort of a melding of 
estimates from outside policy exportations with relative 
expertise.
    This approach is unworkable, and I think would actually 
greatly diminish both the quality and the quantity of the 
objective analysis and estimates that members get. A 
nonpartisan analysis is not simply the product of splitting the 
difference between partisan positions.
    Secondly, effective communications--as it has been alluded 
to here today--between CBO and Congress is one of the agency's 
biggest challenges. It is made more difficult by the changes in 
the budget processes over the years that have caused a huge 
increase in the demand for CBO estimates.
    As you all know, CBO is directed under the Budget Act to 
give priority to congressional committees leading the House and 
Senate Budget Committees. Because of that, they are simply not 
able to respond to all the requests they get for information 
and estimates--especially from rank and file members.
    The frustration this causes is certainly understandable, 
and CBO acknowledges the problem. I acknowledged it when I was 
there. It was something we struggled with all the time. But 
even with the problem of excess demand for CBO estimates, I 
think you should never feel as though you cannot get your 
questions answered or have a sense that the information they 
are giving you is somehow incomplete. There is always multiple 
avenues at CBO to get your questions answered, to get extra 
information. You may not like the answer you get, but you 
should get your questions responded to.
    Third, the issue of transparency, which is the big one. And 
CBO's analyses and its transparency of its analyses are more 
critical than ever, I would say. CBO already devotes 
considerable time to this, as you all know. But they 
acknowledge that they could do a much better job. The 
difficulty is that they are just stretched too thin.
    This really is--as others have said--this is a resource 
question, and I think that a better approach rather than 
posting models on the website or something like that is to 
actually provide CBO with the additional resources and dedicate 
it explicitly to transparency. And you can have CBO report to 
you annually or have a hearing annually on what progress have 
been made on these efforts for transparency.
    Fourth and finally, I would like to sort of pat the Budget 
Committee on the back and also to give them a little push, 
because I think the Budget Committee has a key role to play 
here in helping CBO address members' concerns and also helping 
it to be a more effective organization. I think working with 
CBO to address these concerns is much more productive than 
putting in place well-meaning, statutory requirements to post 
models or to contract out estimates.
    In my view, as I finish up, I think the real issue 
hampering CBO's effectiveness and responsiveness is something 
the committee is all too aware of, and that is the broader 
issues in the dysfunction of the budget process.
    At BPC we have high hopes for the Joint Select Committee on 
Budget Reform which is just starting its work. We have lots of 
thoughts on budget process ideas including biannual budgeting 
and ways to help strengthen the Budget Committee that we feel 
would make some real improvements which we would be happy to 
share with you.
    But, in conclusion, what I would like to say is just for 
you all to remember one thing: that the CBO works for you. 
People at the agency are fully dedicated to its mission. I ask 
you to work with them, ask for explanations, be persistent. 
Take a visit to the Ford Building, fourth floor. Just show up. 
I know they are cringing down there as I say this, but 
seriously, it should be an open institution. Walk in to get 
your questions answered. If you cannot get it over the phone, 
walk down and pay them a visit.
    I urge the Budget Committee to continue to work with CBO to 
resolve these issues with concern. CBO's critical mission to 
support Congress and its budgetary duties depends on it. Thank 
you very much, Mr. Chairman.
    [The prepared statement of Sandy Davis follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Womack. I thank both panelists. I am going to lead 
with a couple of questions here, and then I will yield to the 
ranking member and my fellow colleagues on the right over here 
for their questions.
    It has been pretty universal in both panels that there is a 
need for CBO with the ability to maintain oversight. And then, 
Mr. Davis, in your comments you talked about if we do not 
resource them properly--if indeed we were to cut CBO--that it 
would create, at a minimum, some stress on the organization to 
be able to achieve its congressional mission. But speak to that 
just a little bit more. If we do not resource them adequately 
then I guess it suggests that the information that we are going 
to get from them is going to be less than the product that we 
perhaps want to see. Is that an accurate assessment?
    Mr. Davis. Well, I think the remarkable thing to me is that 
CBO has been able to do the level, amount, and quality of work 
that it has done over the years despite--especially in recent 
years--having insufficient resources to handle it. You have to 
remember, CBO is essentially the same size it has been for many 
years, and while the workload has vastly increased.
    I think that the quality of the work is not affected. I 
think that their ability to explain, to make clear the basis 
for the analysis--for the estimates--is the thing that is going 
to suffer. And it may have suffered in recent years because, as 
Dr. Rivlin said, if you are getting pressed for an estimate by 
Wednesday morning and it is Tuesday night, you are not going to 
have a lot of time to write up and explain that estimate. So, I 
think in my view, it is the resources that would help them 
devote some time to that effort at transparency that is really 
the key.
    Chairman Womack. Ms. MacGuineas, as you know, we had a 
hearing on the behavior modeling, and baseball season was 
getting underway at the time we had the hearing. And I was 
talking about batters, hitters that face a multitude of 
different pitches. If everything was a fastball, they would 
probably be able to time it, hit it, with a lot of accuracy out 
of the ballpark a lot of times.
    But we know that pitchers mix up their pitches, now, and 
they throw a lot of things that move in different directions. 
Life comes at us that way and certainly CBO faces a lot of 
changeups and curveballs and every once and a while a spinner 
comes their way--or they throw those at the hitters. How 
difficult is it for us to actually model to the extent where we 
can be confident in the product?
    Ms. MacGuineas. Okay, so my office is cringing right now, 
because I am not known for doing really well with sports 
analogies. Particularly recently with healthcare, CBO has been 
dealing with huge new issues that have been moving at a very 
quick pace. I thought Doug Holtz-Eakin gave a great example on 
trying to score risk terrorism re-insurance when you have a 
whole new thing.
    One thing you can be confident is that the projections and 
answers are not going to be perfect. They could not be. So, 
what we are really striving for is to understand and believe 
that they will credibly be not biased in any one direction. And 
that they will be open to ongoing input so that those models 
are regularly updated and that we are learning as when there 
are things that do not come out as projected, we are taking 
those results and updating the models and the behavioral 
assumptions.
    So I think what you can ask for is that you trust and that 
you are confident that there is no bias in what you are getting 
out of the best that they can do, and that they are regularly 
learning. And nobody can do perfect, spot-on projections for 
any of these new big areas that we are moving into. And I would 
just add, Members of Congress on these big issues are wanting 
answers more and more quickly, which goes to the resource 
question that Sandy discussed which is why the more people 
working on it the faster the turnaround could be.
    Chairman Womack. Well, your organization and the BPC also 
are kind of able to see how complicated matters are when there 
are substantive changes in the economy, in healthcare, and the, 
you know, average lifespans getting longer and longer, and all 
the technological changes and all those kinds of things.
    So, both of you, I am sure, would agree that there is no 
real definitive answer tool. It is not as simple as a math 
question for a lot of things. We have got behavior involved 
here and we have got a lot of external conditions that have to 
be considered. And so, the modeling piece of CBO is an ever-
changing thing, right?
    Mr. Davis. Yes, sir. I think that you hit the nail right on 
the head. Models require additional work to be updated. And I 
am the last person you want to be talking about models. I 
appreciate it and----
    Ms. MacGuineas. I will talk about models, I just do not 
want to talk about sports.
    Mr. Davis. Talking about sports, I will tell you the 
pitches that they worry about at CBO are the ones that are at 
their heads, the ones that are up and in. That is all I will 
say. I am just being facetious.
    But I do think you are correct. It requires a lot of 
tending and effort and analysis itself. So, that is where I 
talk about the need for resources to do that. It is hard to do 
that sort of concurrently when you are pushing to get the 
estimate and the analysis out the door. But it is necessary, it 
is important. Part of it is writing that up in a clear way that 
members can understand and appreciate. Part of it is just 
having the time to do it and the resources, quite frankly, to 
do it.
    Chairman Womack. Mr. Yarmuth, myself, and Mr. Woodall are 
all on the Select Committee for Budget Process Reform. Can both 
of you--in just a minute or so, because I am going to run out 
of time--can both of you just give us a foretaste of what your 
initial suggestion would be, or your strong guidance would be, 
to the Select Committee? You have three of them sitting here.
    Ms. MacGuineas. Sure. I am so pleased that this Joint 
Select Committee is occurring and I am hopeful that it will be 
able to make progress. Kind of like when we started tax reform 
and you could look at the Tax Code and say, ``Well if there is 
one thing we can agree on, it is broken. We need to fix it.'' I 
think we all feel that way with the budget process, there is a 
lot of improvements we could make.
    So, starting from smaller to larger, I think there a lot 
of--they are not really incremental--but smaller changes within 
the existing process that could and should be made including 
ensuring that a budget is in place. I think it was Congressman 
McClintock who was saying that, ``Until a budget is in place 
you should not be able to pass legislation that costs money.'' 
I like those ideas. I think auto-CRs are something to think 
about.
    And I think Joint Budget Resolution where you have the 
President and Congress agree in the beginning so that you have 
a real law is important for this to be taken more seriously. 
The budget just does not have the teeth that it needs to at 
this point. It is kind of absurd that if we have budgets in 
place, the subsequent policies are often completely at odds 
with that budget. And regularly, Members do not even realize 
that they are inconsistent.
    Second, I think doing more to avoid the gimmicks that exist 
in the budget. So everything from timing gimmicks to using Roth 
IRAs and pension smoothing, which we all know are massive 
gimmicks to look like you are paying things when they are not.
    Just going through the gimmicks: we just produced a big 
report on gimmicks, but figuring out how to address those. 
Focusing on strengthening enforcement. We just had a moment 
where pretty much everybody was onboard to wave PAYGO for the 
tax bill. Very few people realized. I mean, that was allowing a 
massive, massive change in the budget. The tax bill added to 
the debt. Getting rid of PAYGO allowed for that to happen. 
PAYGO needs to be a stronger mechanism.
    Focusing more on the long term so where we can have 
projections and think about the effects in the long term and 
also let savings that occur in the long term give you credit 
today so you have a political incentive to generate long-term 
savings.
    And ultimately, I would like to see a bigger overhaul that 
helps improve very poor fiscal outcome, and I would recommend 
considering something like debt targets and triggers to get you 
there along the year, for a multiyear budget. So that is coming 
from smaller, more manageable, to bigger.
    It is not a time where it is easy to get anything done, so 
I would also encourage you to figure out as much as you can 
push for and get that done, because we need a win. We need 
Congress to come together and work on something and succeed at 
something that moves us in the right direction.
    Chairman Womack. Mr. Davis?
    Mr. Davis. Yes, sir, I think, you know, Maya has laid out 
some really good ideas and proposals. I think that her point 
about, you know, needing a win is important, so I would say try 
not to bite off too much more than you can chew. You have got a 
relatively quick turnaround, and I think the focus on, as I 
mentioned earlier, making the trains run on time, could be the 
biggest thing that you could do to advance the budget process.
    At the Bipartisan Policy Center, we have a series of ideas. 
Dr. Rivlin mentioned her work with Senator Domenici on a series 
of budget process proposals, which was done through the 
Bipartisan Policy Center, and he was a senior fellow there. A 
couple of the key ideas from that, that I would encourage the 
committee to think about.
    The first is biennial budgeting. There has been some 
mention of that here today as a way to sort of ease the 
pressure on the budgetary agenda and on Congress, and free up 
some time for actual congressional oversight in a second 
session of Congress.
    I think another idea which we would stress, I mentioned in 
my testimony, is ways to strengthen the Budget Committee, to 
make it a leadership committee in a sense that would create 
more of a sense of urgency and importance for the budget 
resolution process. Broadly speaking, I think the process can 
be made to work, but it needs more support from leadership 
levels, and it needs to be made a priority.
    Lastly, I will mention that something like an automatic 
continuing resolution is worth thinking about. There are 
obviously issues that you have to deal with about creating 
incentives not to get the work done and living under constant 
CRs, but I think that there are ways to deal with that, to just 
take away the uncertainty of the possibilities of a government 
shutdown.
    Chairman Womack. Thanks to both of you. Mr. Yarmuth.
    Mr. Yarmuth. Thank you, Mr. Chairman. Thank both the 
witnesses, also. I have this knack for asking questions that I 
really do not expect a certain answer to. I am just actually 
curious. And it occurred to me that something that might be 
useful is if we asked CBO to, as a matter of course, do a score 
on an enacted piece of legislation every 2 years or so, above 
some level. So, $5 billion or whatever, hypothetically.
    So that with the ACA, we would have a score every 2 years 
as to what it looked like for the next 10. Obviously, we do not 
want to add too much to the CBO's plate, but since they had 
already done a lot of the work, the incremental work might not 
require all that many additional resources. I just threw that 
out. Mr. Davis, how do you react to that?
    Mr. Davis. So you are talking about a reassessment of 
something that has been enacted into law, just to keep track 
of, you know, what the original estimate said, how far off it 
was, what actual spending is. That can be a tricky thing to do, 
and in some cases, almost impossible, because it depends on the 
change that has been enacted.
    If you have made changes to an existing program, and these 
changes get all wrapped up with what already existed under 
current law, it may be hard to parse out how those differences 
made changes, versus what was already under current law.
    But, if you have created a new program, for example, like 
Congress did under Medicare part D, a new prescription drug 
benefit, that is something that can be tracked. And that is 
something that CBO has tracked and kept track of, their 
estimates versus how it actually turned out. And as folks are 
aware, their estimates were too high, initially. The cost of 
the prescription drug benefit was not as high as originally 
estimated.
    I think that is, you know, in part, what a baseline is. You 
sort of take stock every few months of where current law 
spending is now, parsing it by individual programs. That is 
more of a challenge, but I think for new programs that have 
been enacted, it is a fair question to ask. If you want to say, 
``We did this, this was our expectation at the time, how has it 
turned out?'' That is a fair question.
    Mr. Yarmuth. I do not have anything else I want to ask, but 
just give you both an opportunity, since I have all this time 
left, to talk about anything you have heard today, so far, that 
you were just chomping at the bit to--that is a horse racing 
term--to react to, while you were sitting and watching and 
listening.
    Ms. MacGuineas. I will react to something. I will try to do 
this the right way. Which was, I thought Alice and Doug did 
fabulous jobs of pointing out the tensions. I heard Alice talk 
a lot about what the real, big priorities that we should be 
focusing on are, and I thought Doug did an incredible job of 
showing a bunch of the tensions between making changes and the 
pros and cons, and not portraying things as black and white.
    But one of the things I kept hearing was kind of a 
frustration with our fiscal situation that was being a little 
bit pushed on CBO. And so, I am going to politely push back, 
and say that the fiscal situation and the broken budget process 
comes from Congress, it does not come from the Congressional 
Budget Office.
    And so, what we need to do is help CBO put out the kinds of 
things that will enable Congress to do what many people want to 
do, which is put us on a more fiscally sound track and have a 
budget that functions better. But because of the political 
environment in which you exist, that is really difficult.
    You do not want to politicize CBO. I am sure some of you 
are, or have been, soccer parents. Right? I spend my weekends 
listening to parents on the soccer sidelines yelling at the 
ref, and it is unbelievable how it turns out the ref is always 
against our team, but never is against the other team. Right?
    And so, you kind of want to say it probably evens out when 
the ref makes a mistake, or not. I think CBO really does do 
that, and I think we have to focus more on what is it that is 
making it impossible to get the right fiscal outcomes that we 
want.
    So, I would just keep turning the picture back to what the 
big fiscal situation is. How we are going to budget in a way 
that really reflects and pushes for our national priorities, 
and thinks about the tradeoffs to get there?
    So, that was my big picture thinking, but, then again, I 
sit there and I think about the national debt pretty much no 
matter what is going on. That is kind of where I am.
    The reason I ended up in this field is because I had a 
normal job working on Wall Street in finance, and I read a CBO 
report in the 1990s. It was one of the most interesting things. 
It was unbiased, it was fair, and it talked about deficits of 
$203 billion, and I was really concerned. I think that was the 
number. And things have really deteriorated since then, and the 
big picture is what are we going to do to change it.
    And, Mr. Chairman, one more answer to your question about 
the Joint Select Committee. One thing I did not mention that I 
think would be really important is looking at putting caps on 
the full budget. Not just discretionary, like we did at 
sequester, but thinking about how you include mandatory and tax 
expenditures, which really are spending through the tax code. 
There are a trillion of them a year. So looking at those pieces 
of the budget also, and figuring out how to cap them.
    Mr. Yarmuth. Mr. Davis, anything?
    Mr. Davis. Yes, just very briefly, there is always going to 
be conflict with CBO. It is a nonpartisan institution. Congress 
is a partisan institution. They get it, they get it. It has 
been the days from Alice, when they did an analysis of the 
Carter energy plan for a Democratically-controlled Congress, 
which was not too popular at that point.
    It has been that way throughout CBO's history, so I would 
not worry about taking issue with CBO. They actually want to 
hear from you. If it is done in the right way, as a way to try 
to improve things, that is not a problem at all. They want the 
communication.
    Mr. Yarmuth. Once again, thank you both for your testimony. 
I yield back to Mr. Chairman.
    Chairman Womack. I thank the ranking member, and you know, 
Ms. MacGuineas, for someone that says they are not good with 
sports metaphors, you gave us a good one there on the soccer 
field. Anyway, Mr. Woodall from Georgia, the floor is yours.
    Mr. Woodall. Thank you, Mr. Chairman. Mr. Davis, I want to 
start with you. You said, in your encouragement for us to go 
down to the Ford Building, to remember that CBO works for you. 
But, in both of your written testimonies, you talked about the 
importance of an independent CBO. In my mind, those two things 
are categorical opposites. Either you work for me and you do 
what I tell you to do, or you get to do whatever you want to do 
because you are independent.
    Help me to understand having your inside view, that 
distinction between working for us and yet, again, only staff 
director on all of Capitol Hill, who is going to come sit at 
the witness table and tell the committee for which they work 
how it is.
    Mr. Davis. So, let me say, I understand what you are 
saying. I understand the frustration with that, and the 
distinction you made between OMB and CBO with Dr. Rivlin. I 
think what it boils down to is what you mean by ``advice.''
    I think the folks at CBO will sit down and talk with you 
about anything you want to talk about, and you can run your 
ideas past them. They can tell you what economics says about 
those ideas, what their analysis indicates about those ideas, 
what additional options may be.
    But the difficulty is that they have to be consistent with 
the advice and the information and the analysis they give to 
everybody, and they have got 535 masters when you bring in the 
Senate. I know we do not like to talk about the Senate in the 
House. But when you do that, that is a lot.
    So, it is more about the consistency of the advice, making 
sure independence also means nonpartisan, and independence 
means not captured by one party or the other, or beholden to 
one committee or another, working for all of the Congress.
    So I think that you can have conversations with the 
Director. You can go one-on-one with the Director, and you can 
raise some of these issues, and he can put it in context for 
you. The same can be done at the staff level. It is just a 
matter of understanding that they have to give the same set of 
basic analysis to everyone, and everyone has the benefit of 
their thinking. And it may not line up with a particular policy 
position or not.
    My view is that when the budget had set things up, they set 
up CBO to be that source of nonpartisan independents for 
Congress. When I say ``independents,'' independent for 
Congress. And the Budget Committees were set up as the policy 
arm. So it was the Budget Committees that sort of set the 
policy positions, using that nonpartisan analysis, and go 
forward from there. To be policy ideas, and not so much CBO on 
the policy side.
    Mr. Woodall. Ms. MacGuineas, you said you wished we were 
focused on bigger picture issues than just process, and yet we 
probably spend more time arguing about the referees than we do 
focusing on the underlying policy. It seems to me we should be 
pushing the referees to the background. They should be referees 
of the behind the scenes conversation, but they should not rise 
to the level of importance that it gets in the way of the 
actual policy conversation we are trying to have.
    Ms. MacGuineas. Okay, so I think you have asked the most 
interesting questions in this whole hearing, because I am still 
thinking about the ones you asked the previous panel about CBO 
versus OMB, and they are really thoughtful. I think that CBO, 
we need a referee, and we need a referee that we agree is going 
a good job, and that is why oversight committee hearings are 
really important.
    But then, we need to spend our time disagreeing or fighting 
or evaluating the policies, rather than CBO, when we do not 
like the scores that we are getting on things. Which is not to 
say that they are perfect, it is just to say we need to be 
debating those bigger issues.
    That CBO, a score it has, is not going to be as important 
as spending our time thinking about what it means to add $14 
trillion to the debt. So, I am thinking about relative energy. 
I am also thinking about the real importance of getting a 
budget resolution passed that hopefully has reconciliation, 
which has savings in it. So, all the kinds of things that are 
really going to improve the fiscal situation.
    And, to your specific question, I think CBO needs to be 
apolitical, but also accountable. And I think you all set a set 
of rules for them, which they then need to enact and follow in 
an apolitical manner, and, if and when it is appropriate, you 
change those rules.
    But it is different than OMB, because they are accountable 
to two different parties with different policy preferences, and 
they do not come back and say, ``Oh, I do think this about a 
policy,'' or, ``I think that is a good or a bad goal,'' the way 
they would if they were OMB. And that is just the nature of 
having 1 President, versus all Members of Congress.
    Mr. Woodall. Let me ask, finally, I did not realize CBO had 
so many non-economists working for them, until the chairman and 
the ranking member had this series of hearings. CRS has twice 
the resources that CBO has. Is there a downside for us 
partnering those two agencies, both charged with providing 
nonpartisan counsel?
    Mr. Davis. Well, a couple things. Having worked at CRS, 
too, their missions are different. CRS is basically Congress' 
research arm. They are not required to set priorities, or do 
not have to set priorities like CBO does, for the type of work 
that CBO engages in. So, while there are some similarities, the 
broad sort of budgetary and economic analysis that CBO does is 
different from the policy analysis and research done at CRS.
    I think you have got to have, in my perspective you need to 
have a single entity that is producing cost estimates and other 
analysis that is used in the budget process. There is important 
work to be done in transparency and effective communications.
    I am taking into account all the latest research, but I 
think a single entity providing that is important to avoid 
confusion in the budget process, to make sure that there is a 
level playing field of estimates and analysis that is used to 
support that.
    So, I think that the two agencies are distinct. There is an 
importance that they be distinct, because they have completely 
different missions. Mr. Chairman----
    Chairman Womack. I want to give Ms. MacGuineas an 
opportunity to answer that question as well.
    Ms. MacGuineas. I think it is an intriguing idea. I think 
there could be some real potential in that. I do not know the 
details of what the downside would be, but I think it is 
intriguing.
    Chairman Womack. Mr. Renacci, Ohio.
    Mr. Renacci. Thank you, Mr. Chairman, and thank both panel 
members. You know, I love budget meetings. I was a business guy 
for 30 years. I get frustrated every time I hear this, because 
we are all talking about the answers. I still remember somebody 
told me in leadership one time, ``Budget is just a vision, it 
is not a path.'' No. The budget should be a path, not a vision. 
We have to have a path, we have to follow the path.
    But I want to flip back to CBO, because my biggest 
frustration with CBO is--you know, in the business world, and I 
was a turnaround guy, so I would take over businesses that were 
in trouble. And then, I would bring my CBO in, my individual, 
and I would tell him, ``Give me an analysis, and I need to make 
some decisions based on your analysis.''
    And what he would do, or she, depending on who it was, they 
would give me best case, worst case, and then I knew where I 
was at. Best case, worst case. The problem we have here is that 
CBO gives us only case, and I think that is a problem.
    So, the best example I can give you, and that is where my 
frustration comes, is CBO's estimate of the amount of Americans 
who would no longer have insurance under the repeal of the 
individual mandate--I brought this up at one of the previous 
hearings--was significantly different than an estimate from 
SMP; close to 10 million different.
    So, for Members of Congress, I think it is important to 
have an understanding and to try and decide how confident we 
can be with CBO. I think we could be much more confident when 
somebody comes in and says, ``best case, worst case.'' And 
then, you make your decisions, because there is no ``single 
case.'' There is no individual case.
    Mr. Davis, I would just like you to tell me your thoughts 
on that.
    Mr. Davis. Well, it is a good point, and what I would say 
is that, broadly speaking, that is sort of what CBO tries to do 
in its analysis. What CBO says is what they try do, the basis 
of their analysis, is to sort of try to find the middle of the 
range of expected outcomes, taking into account what outcomes 
are based on research and data and information, their 
experience, what the models show about a particular outcome for 
a particular policy. Because what they do, and it has been said 
before at this hearing, is to try to prepare estimates and 
analysis to support the budget process. And the budget process 
requires, essentially, a set of single numbers, single 
estimates for, typically, a 10-year period.
    So that is their thinking. They also have to use a budget 
baseline. They are under the Budget Act, required to use a 
current law baseline that often informs their analysis. It is 
the basis of their analysis. So I know that may cause some 
frustration.
    But to your broader point, I mean, hopefully when they 
write up their analyses, when they try to discuss all the 
elements and the assumptions, that they broadly discuss what 
the wide range is, what the broad, best case and worst case 
scenarios are. In the form of writing up what they think their 
best analysis is, which is that sort of middle of the range of 
distributions. They are trying to give their best judgment 
based on all the information they are aware of.
    Mr. Woodall. Okay. That is why we need more transparency, 
absolutely, so we can see what is best case and worst case. 
Because we get these numbers and then everybody lives and dies 
by these numbers. You know, it is interesting.
    Dr. Rivlin, in the last session, said that the biggest 
problem is we need to get the House, the Senate, the President 
to sit down and review revenues, expenses, and debt, and make 
decisions in totality. I think that is true. It is too bad we 
do not get to that point, because that is where I think CBO 
would be helpful.
    And Ms. MacGuineas, again, I appreciate. We have had lots 
of conversations over the years about the budget process and 
the national debt and the deficits, and I admire your 
commitment to being a leading force on the importance of this 
issue.
    How do you think CBO can help? We do not talk enough about 
that. Should they be talking about it, and how can they help 
Members of Congress in that area? Because I think it is 
important. That should be the starting point. I know they dig 
down in this legislation. The big picture is we are going in 
the wrong direction, and I do not know if you have any thoughts 
on that.
    Ms. MacGuineas. Yeah. My guess is that for folks who work 
at CBO, they probably are painfully aware of just how fiscally 
unsustainable our path is, because you cannot look at a CBO 
document and not come away with that. That is exactly why I 
switched careers into doing this when I read it, because the 
numbers tell the story.
    I think, as Alice Rivlin said, it is absolutely right that 
they do not come out and say to Congress, you know, ``You need 
to do this,'' that they do not push policies more. They should 
not be in the role of telling folks what to do, but, 
unfortunately, the numbers are so bad that they speak for 
themselves.
    So, this really is an issue of, it should not be up for 
debate, if it is a problem. Anybody who looks at a CBO document 
is going to know that it is a problem, that the debt is growing 
faster than the economy, as far as the eye can see. So, I think 
just continuing to publish their reports, and then we all have 
the role of putting them on a bigger platform.
    That is something that you have worked on very clearly and 
strongly, which is how you have overall, national reports to 
the country about the fiscal state. So I think Members of 
Congress take what CBO does, just the numbers, and they use it 
to make that picture clear.
    Mr. Renacci. The only issue, and I have run out of time, is 
that there are many Members, well, a quarter of the 
representative government, so a lot of Members do not 
understand those reports when they come out. I do, you do, and 
others do, but I still think we have to make sure they are 
emphasizing that. Because too many times, we make decisions 
based on the next election, not the next generation. I yield 
back.
    Chairman Womack. Mr. Arrington, Texas.
    Mr. Arrington. Thank you, Mr. Chairman, and I want to thank 
the panelists for your counsel and your presence here today. I 
find myself in enthusiastic agreement with a lot of what you 
have said. But in the interest of time, let me go to the nuts 
and bolts of CBO, because I think that is the main purpose 
here. Although, I would like to go to the real threat, which is 
the debt and deficit spending.
    And let me make one comment on that, because I agree with 
Ms. MacGuineas that CBO has little to nothing to do with 
stopping this train wreck that is going to happen if we do not 
change our behavior. It is the will of the United States 
Congress, plain and simple. We can make some reforms on 
process. We might even be able to put some accountability 
measures in there that could help, but ultimately, it is the 
collective will of the United States Congress.
    And as a new Member, I am awfully discouraged by my first 
year, and what we were able to do, even as a majority. I will 
just say it. To send a budget that finally got at the drivers 
of the debt, which is our mandatory spending programs, reduce 
that more than we have in 20 years, send it to a simple 
majority Republican Senate, because it was reconciliation, and 
then they did not do it. They pulled it out. So an interesting 
way to start my time here in Congress. Nuts and bolts.
    Would you agree with me, Mr. Davis, that success for CBO is 
delivering timely and accurate information to this committee so 
we can do our job?
    Mr. Davis. As best they can, yes.
    Mr. Arrington. To put it simply. So I subscribe to the 
Peter Drucker, ``If you cannot measure it, you cannot manage 
it.'' How well is CBO doing on delivering timely and accurate 
information?
    Mr. Davis. I think, considering the demand that they are 
under, I think they do really, really well. They have to set 
priorities.
    Mr. Arrington. Do you have proof of that? Can you give me a 
score card? How often have they been right? To me, this is also 
the biggest challenge, one of the bigger challenges in this 
oversight role that we have in Congress, is I do not know which 
programs are working, which ones are not. We fund unauthorized 
programs. I cannot tell you how many hearings I have had where 
I just asked the simple question, ``What is success, how do you 
measure it, and how are we doing?''
    And I think CBO, if we are going to manage it, or at least 
oversee the management of CBO, we need to be able to ascertain 
their success rate, and, with some reasonable margin for error, 
what is their batting average? And then, where can we then 
identify making adjustments and improvements.
    I certainly think resources are a part of the sort of 
universal best practice for organizational excellence, and if 
they need more resources, I think we need to talk about it and 
I think we need to do it. But they need accountability, too. 
And I do not have a score card. Is that fair, for me to draw 
that conclusion at this point?
    Mr. Davis. I think it is absolutely fair for you to ask the 
question and to want this information. I think, also, that the 
metric I would use is not so much accuracy, which, accuracy is 
critical, but accuracy is going to be dependent upon the 
information that they have in a given setting at a given time. 
It is more the process that they go through. Are you satisfied 
that what they are doing is pulling in information that is 
objective and that fully informs their analysis?
    If you do not think so, if you have got information you 
think they should have, then you should share it with them. Or, 
if you think it is not well explained, you should share it with 
them. But I think it is more about their process, staying true 
to being independent and objective.
    Mr. Arrington. And I can only judge the inputs by the 
outcomes. If I know they are hitting the target reasonably 
well, then I can say the inputs must be good. If they are not, 
let's look at the inputs. Let's look at the process. But to me, 
you have got to start there. I do not have much visibility. I 
do think that peer review or some vetting would be very 
important to this process. I consider it important to all the 
work that I do before I complete something or submit something.
    Ms. MacGuineas, what do you think about the peer review 
process, or the vetting process, with respect to CBO and their 
information and analysis? I know they have an advisory board. 
Is it the right board? Do we have the right people?
    Ms. MacGuineas. Yeah, I like your question a lot, and I 
heard Keith Hall testify about considering the analysis of the 
actuals, which seems like the kind of things in the right 
direction. So, certainly, there should be an ongoing evaluation 
of how they performed. One of the important things is, then, to 
break out. They will be wrong on every single number. Nobody 
will be right on each number.
    But when they were wrong because the policies, the models, 
the behavioral assumptions were wrong, or when they were wrong 
because things that changed in the economy, or other policies, 
changed the outcome. So we have to be really clear to do that, 
and make sure that the numbers are used responsibly.
    Peer reviewing is an interesting idea. I looked through the 
panel of advisors right before I was doing this testimony, just 
to make sure they were as diverse and solid as I thought they 
were, and they seem like an excellent panel of advisors. So, I 
would have focused on, ``Let's make sure they are really, truly 
engaged at a deep level,'' and I have talked to a number of 
them over the years who are.
    But I think peer review makes complete sense. I think if 
people are concerned that the outside perspectives that CBO is 
getting are not diverse enough, we should, by all means, 
recommend that they talk to additional academics and experts.
    Mr. Arrington. My time has expired.
    Chairman Womack. Mr. Palmer, Alabama.
    Mr. Palmer. Thank you, Mr. Chairman. Ms. MacGuineas, I have 
heard it said that getting a good CBO score is similar to 
getting a good SAT or ACT score, and a lot of it comes down to 
just being good at taking the test. Can you discuss some of the 
budget tricks and gimmicks commonly used to get favorable CBO 
scores, if you can? I have got a couple of things I want to 
point out.
    Ms. MacGuineas. Yeah. As I mentioned, we just came up with 
a huge, long list. We did a report documenting gimmicks, and I 
was somewhat stunned to learn just how many there really are 
that are utilized. And we were very concerned about publishing 
it, of course, because it felt like we were doing the bomb 
maker's manual, and saying, ``Here are the instructions to use 
all the gimmicks,'' instead of, ``do not use them.'' So, do not 
read it if you want to use them, only read it if you want to 
stop them.
    Mr. Palmer. Stick to sports metaphors and not bomb makers.
    Ms. MacGuineas. Okay, sorry. Right. So, I think the most 
important on is timing expirations. When you have things that 
expire, which are not intended to expire. After this, I am 
going to talk about tax extenders. Tax extenders is a perfect 
example where things that are not paid for, plan to expire, and 
then when it comes due, we say, ``Well, we need to extend 
these, and we should not pay for them,'' even though they were 
not paid for before.
    Or pay-fors that are put into legislation in the out years, 
when everybody knows that nobody actually assumes that they are 
going to get paid for. And we have a lot of recent examples of 
that, too, and you have both parties voting to never let those 
pay-fors kick in.
    Mr. Palmer. Well, there are other issues that we have seen 
over the years. I ran a think tank for 24 years and did a lot 
of work at the Federal level, and I saw things like on the 
Affordable Care Act, for instance. The Class Act.
    Ms. MacGuineas. The Class Act was a big timing gimmick, a 
huge timing gimmick.
    Mr. Palmer. Yeah. It was a joke, but the CBO allowed itself 
to be manipulated into that, to show less of a negative impact 
on the Federal deficit.
    Ms. MacGuineas. So, Sandy would know better than I, but I 
actually think a lot of those rules come from the Budget 
Committee to CBO.
    Mr. Palmer. Right. I do not disagree, but they took 
advantage of the fact that CBO does 10 year scoring, and the 
Class Act was 5 years.
    Mr. Davis. It is the budget window that was the issue 
there. CBO was fully transparent about the effects beyond the 
budget window.
    Mr. Palmer. But the CBO has got to have the ability and 
take the responsibility to point these things out. I will give 
you another one.
    Ms. MacGuineas. I do think, though, that the way that it 
works is that the rules are given to CBO, and the question is 
if CBO is following those rules. And then, what rules should we 
change? And there are many that should be changed.
    Mr. Palmer. I am going to make a closing statement about 
that, because I think this is right in line with what we are 
trying to do with the budget reform and appropriations task 
force to fix this, because the CBO is under certain rules and 
guidance that I think hampers its ability to do a better job.
    But I will give you another example of a gimmick, was 
Waxman-Markey. When the CBO projected that by 2020, the 
increase from cap and trade would only be about $175 per 
household. And they arrived at that by virtue of the fact that 
rising prices would force more households into lower income 
brackets and lower their taxes. It was a perverse way of saying 
that all these people would get a tax cut because their incomes 
were impacted and they went into a lower tax bracket. That, to 
me, is the gimmick of all gimmicks, Mr. Chairman.
    And certainly, I would not accuse the CBO of being 
political, but there seemed to be some bias there toward that 
legislation, to try to sell it. And that could have been from 
the Budget Committee as well, I do not know. That was in 2010.
    Mr. Davis. If I can respond, briefly. I do not recall the 
specific circumstances of that, but what I can tell you is, CBO 
goes through a process of estimating legislation as it is 
drafted. This could have been part of an iterative process for 
drafting legislation. They are using the underlying baseline 
assumptions they would normally use, economic assumptions. I am 
sure there are lots of uncertainties, but it was based on the 
legislative language that they put in front of them to 
estimate.
    Mr. Palmer. I was very involved in that, and I will not get 
into the real numbers and how it impacted people. But I grew up 
dirt-poor, so I paid potential and specific attention to 
things, how it impacts lower-income families. And as a 
percentage of their disposable income, the bottom quintile 
would have been five times higher than the top quintile.
    The point I want to make in closing is--and, Mr. Chairman, 
I think this, again, will be helpful for the work that the 
Select Committee is doing--is that the CBO is under certain 
rules that prohibit them from doing better analysis, in my 
opinion. For instance, they are prohibited from taking into 
account savings that arise from efforts to combat waste.
    And my pet peeve right now is improper payments. And in 
other areas where it requires a front-end investment, there 
might be more technology, you know, upgraded technology, they 
score that as a cost without taking into account the savings. 
And I really think that this is a way that we can help the CBO, 
particularly in the work being done by the Select Committee.
    So, I do not blame the CBO for all of its failures. But I 
do think we have got to eliminate the gimmicks, and we have got 
to put them in a position where they give us accurate 
estimates. With that, Mr. Chairman, I yield back.
    Chairman Womack. Mr. Bergman from Michigan.
    Mr. Bergman. Thank you, Mr. Chairman, and thanks to both of 
you. I guess I feel sad for some of my colleagues across the 
aisle, especially the freshmen, who are not here. Because, as a 
freshman, you get to come to learn. You come to, you know, 
crawl, walk, run, and these types of hearings are very 
educational for folks who are first-time legislators, if you 
will.
    Now, I may be dating myself a little bit, but, as I look 
around the room, especially behind me, I know there are some in 
the same category who remember a comic strip called ``Pogo.'' 
And it was probably some of the best political commentary of 
its time. And there was a character in there by the name of 
Churchy LaFemme. I think one of his famous statements was, ``We 
have met the enemy, and he is us.'' Okay. In the earlier panel, 
former Director Riverland said, ``Every other year, it will be 
a different Congress.'' I would like to hear your thoughts on 
the challenges that that presents.
    Mr. Davis. Well, I will just start off briefly. I think 
that, for CBO, I mean, there are two challenges, I guess. There 
is the policy challenge of new policymakers coming in, a new 
set of priorities, additional difficulty trying to reach broad 
agreement on budget priorities.
    For CBO, there is a new set of folks who may or may not 
understand, as you were saying, how it works, how their process 
works, who, under the Budget Act, they give priorities for, and 
how a nonpartisan entity works in a broader, partisan 
institution. And that is often a difficult challenge for them.
    Mr. Bergman. Is it the right answer, then, if you think 
about if, in fact, we have, every 2 years, it is a--pardon me 
for interrupting but----
    Mr. Davis. No, no, you are good.
    Mr. Bergman. Time moves on. Have we created a long-term 
problem for ourselves in 21st-century technology, and the rate 
at which things change, information flows, data is accumulated 
and analyzed? And we know we have created a fiscally 
unsustainable pathway. I mean, I do not think there is any 
disagreement as we just look at the pure, raw numbers. Have 
we--through how we conduct our business as a Congress now, and 
then the expectations that are laid upon CBO, because you are 
working with a new Congress every 2 years--have we created an 
unsustainable path for ourselves as a continually-changing 
Congress? That is what I would really like to hear your 
thoughts on.
    Mr. Davis. You mean the fiscal challenge? The long-term, or 
just the operational?
    Mr. Bergman. The names and faces changing here every 2 
years. Every 2 years.
    Mr. Davis. Two years, right. I mean, that is our electoral 
process. And it is a challenge. I think that is why the role of 
this committee is important in sort of helping to orient 
members to the process, to the role of CBO.
    As a freshman Member, you are going to appreciate this. I 
remember, in my time at CBO, Congressman Renacci paired up with 
Democrat Jim Carney, who is now Governor of Delaware. And they 
formed a bipartisan freshman group, and they wanted to hear 
from CBO on a regular basis to discuss a range of issues, 
scoring matters, baseline rules, what is up with this; we are 
hearing this, can you explain it for us, that sort of constant 
interaction by a group of Members. They just pulled together 
informally. I think it was very helpful and constructive. So 
those kinds of things I help with. A 2-year change over all the 
time can help. Individual Members can ban together.
    Mr. Bergman. Again, the finite thing here is time, and 2 
years is the time. Are we any better at bringing freshmen up to 
speed and getting them productive sooner, or are we stuck in 
that treadmill of, we go over the same class? It is kind of 
like teaching flying; every time a new student comes into that 
airplane, you know they are going to make the same mistakes 
because that is it the learning process. Are we wasting time 
and money the way we do things today?
    Mr. Davis. I do not think so. I think it is just the 
challenge of our electoral system.
    Mr. Bergman. That it is a brutal reality we have to accept.
    Mr. Davis. We are going to have to turn over every 2 years 
and deal with the changes. Yes.
    Mr. Bergman. Thank you. Mr. Chairman, I yield back.
    Chairman Womack. No other members have appeared to seek 
time with our witnesses today, so I just want to thank our 
panelists, Ms. MacGuineas, Mr. Davis, for appearing with the 
committee today.
    Please be advised that members may submit written questions 
to be answered later in writing. Those questions and your 
answers will be made part of the formal hearing record.
    Any members wishing to submit questions or any extraneous 
material for the record may do so within 7 days. Again, thanks 
to our panelists, and, with that, this committee stands 
adjourned.
    [Whereupon, at 1:13 p.m., the committee was adjourned.]