Bloomberg News presents an analysis of the CBO by economist Amity Schlaes, in which she explains how the CBO comes to its conclusions via hand-picked assumptions fed to it by the writers of the bills it analyzes.
The CBO’s rules make it hard for the group to fulfill its own mandate. You’d think, for example, that the CBO would use its own parameters when it crunches numbers. Instead, the CBO must use the same mathematical assumptions supplied by the very lawmakers who wrote the bill the group is evaluating. No matter how improbable those formulas are.
Former CBO director Douglas Holtz-Eakin, writing in the New York Times, described the group’s process as “fantasy in, fantasy out.”
CBO rules often preclude common sense. Its forecasters can’t take into account any other legislation when studying the price tag of a proposed bill. That enabled the forecasters costing out House Speaker Nancy Pelosi’s bill to overlook this fact: Medicare spending increases will force tax increases, which in turn will hurt growth.
In essence, the very nature of the CBO does not allow it to examine how legislation will actually effect the economy, but only how politicians want voters to think it will effect the economy.