U.S. GOVERNMENT PUBLISHING OFFICE

30–529 WASHINGTON : 2018

CBO OVERSIGHT: ORGANIZATIONAL AND 

OPERATIONAL STRUCTURE 

HEARING 

BEFORE THE

COMMITTEE ON THE BUDGET 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD IN WASHINGTON, D.C., JANUARY 30, 2018 

Serial No. 115–7 

Printed for the use of the Committee on the Budget 

( 

Available on the Internet: 

www.govinfo.gov 

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(II) 

COMMITTEE ON THE BUDGET 

STEVE WOMACK, Arkansas, Chairman 

TODD ROKITA, Indiana, Vice Chairman 

DIANE BLACK, Tennessee 

MARIO DIAZ-BALART, Florida 

TOM COLE, Oklahoma 

TOM MCCLINTOCK, California 

ROB WOODALL, Georgia 

MARK SANFORD, South Carolina 

DAVE BRAT, Virginia 

GLENN GROTHMAN, Wisconsin 

GARY J. PALMER, Alabama 

BRUCE WESTERMAN, Arkansas 

JAMES B. RENACCI, Ohio 

BILL JOHNSON, Ohio 

JASON SMITH, Missouri 

JASON LEWIS, Minnesota 

JACK BERGMAN, Michigan 

JOHN J. FASO, New York 

LLOYD SMUCKER, Pennsylvania 

MATT GAETZ, Florida 

JODEY C. ARRINGTON, Texas 

A. DREW FERGUSON IV, Georgia 

JOHN A. YARMUTH, Kentucky, 

Ranking Minority Member 

BARBARA LEE, California 

MICHELLE LUJAN GRISHAM, New Mexico 

SETH MOULTON, Massachusetts 

HAKEEM S. JEFFRIES, New York 

BRIAN HIGGINS, New York 

SUZAN K. DELBENE, Washington 

DEBBIE WASSERMAN SCHULTZ, Florida 

BRENDAN F. BOYLE, Pennsylvania 

RO KHANNA, California 

PRAMILA JAYAPAL, Washington, 

Vice Ranking Minority Member 

SALUD O. CARBAJAL, California 

SHEILA JACKSON LEE, Texas 

JANICE D. SCHAKOWSKY, Illinois 

PROFESSIONAL STAFF

DAN KENIRY, Staff Director 

ELLEN BALIS, Minority Staff Director 

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CONTENTS 

Page 

Hearing held in Washington D.C., January 30, 2018 ........................................... 1 

Hon. Steve Womack, Chairman, Committee on the Budget ......................... 1 

Prepared statement of ............................................................................... 3 

Hon. John A. Yarmuth, Ranking Member, Committee on the Budget ........ 5 

Prepared statement of ............................................................................... 7 

Keith Hall, Ph.D., Director, Congressional Budget Office ............................ 9 

Prepared statement of ............................................................................... 13 

Hon. Steve Womack, Chairman, Committee on the Budget, questions 

submitted for the record ............................................................................... 65 

Hon. Gary Palmer, Member, Committee on the Budget, questions submitted for the record ..................................................................................... 68 

Director Hall’s response to questions submitted for the record .................... 69 

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(1) 

CBO OVERSIGHT: ORGANIZATIONAL AND 

OPERATIONAL STRUCTURE 

TUESDAY, JANUARY 30, 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, Cole, Woodall, Palmer, 

Westerman, Renacci, Smith, Arrington, Black, Lewis, Smucker, 

Ferguson, Johnson, Sanford, Gaetz, Rokita, Bergman, Brat, 

Grothman, Yarmuth, Lee, Moulton, DelBene, Wasserman Schultz, 

Jayapal, Carbajal, Schakowsky, Jeffries, Jackson Lee, Higgins, and 

Lujan Grisham. 

Chairman WOMACK. It is 10:00 and good morning, everyone. The 

hearing will come to order. Welcome to the Committee on the 

Budget’s hearing on Oversight of the Congressional Budget Office. 

This hearing will focus on CBO’s organizational and operational 

structure. It is the first of five hearings that the Committee plans 

to hold regarding oversight of the congressional budget. 

The goal of today’s hearing is to learn more about CBO, which 

was created as part of the Congressional Budget and Impoundment 

Act of 1974. For decades, this agency’s primary duty and function 

has been to assist Congress in the Federal budget making process 

by providing cost estimates, economic analysis, working papers, 

and other insightful publications. 

Members of the House and Senate Budget Committees rely on 

CBO as an objective, impartial resource when writing budget resolutions. The agency also plays a key role in advising this Committee as it enforces budget rules. Without question, there are dozens of fine men and women employed by CBO, including analysts, 

management, and support staff. 

But more than 40 years since its founding, Congress has not undertaken a comprehensive review of CBO’s structure and processes. 

In fact, CBO still operates under its original permanent authorization. I say this not to raise alarm about the future of CBO or question Congress’ need for it. It is simply a fact that serious oversight 

has not been exercised to ensure the agency still has the tools it 

needs to be successful in fulfilling its mandate. That being said, our 

intention is the same with today’s hearing as it will be with upcoming hearings. We want to better understand how CBO carries out 

its nonpartisan mission in service and support to Congress. 

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During today’s hearing, we will take a closer look at the organizational and operational structure of CBO, including its staffing, 

assumptions, processes, and work products. To provide an overview 

on the inner workings of this congressional support agency and 

how it has evolved over the years, I am pleased to welcome Dr. 

Keith Hall. Dr. Hall has served as director of CBO since April of 

2015, when he became the ninth director of the agency. 

Before we hear directly from Dr. Hall, I want to stress again that 

this series of hearings is not designed to be partisan or to invite 

cheap shots against the agency so vital to the Congress’ ability to 

budget independently. However, there are legitimate questions 

about how CBO operates, and I am hopeful that these hearings will 

shed light on how we can improve its operations to provide Congress what it needs in the 21st Century. 

To ensure CBO can effectively and efficiently carry out its mission, I am pleased we are advancing a comprehensive review 

through these oversight hearings, and I look forward to productive 

conversations today with Dr. Hall. 

Now, before I yield to my colleague, the Budget Committee’s 

Ranking Member, Mr. Yarmuth, I will remind everyone that this 

Committee will strictly enforce the 5-minute rule. I am a military 

guy, I like to run a tight ship, and I want to ensure that our hearings are as productive as possible. 

So, I will ask that your remarks and your questions are delivered 

with enough time for our witness to respond. If they are not, answers will be submitted for the record, and I will hold my colleagues and myself to this rule. So, thanks in advance. 

I look forward to a productive hearing. And now I would like to 

yield to the Ranking Member, Mr. Yarmuth, from the great commonwealth of Kentucky for his remarks. 

[The prepared statement of Chairman Womack follows:] 

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Chairman Womack Opening Statement: 

Hearing on CBO'S ORGANIZATIONAL AND OPERATIONAL STRUCTURE 

Washington, January 30, 2018 

As prepared for delivery- House Budget Committee Chairman Steve Womack 

Good morning, and thank you to everyone for being here as we begin a series of 

oversight hearings on the Congressional Budget Office. The goal oftoday's hearing 

is to learn more about CBO, which was created as part ofthe Congressional Budget 

and Impoundment Act of 197 4. 

For decades, this agency's primary duty and function has been to assist Congress in 

the federal budget-making process by providing cost estimates, economic analysis, 

working papers and other insightful publications. Members of the House and 

Senate Budget Committees rely on CBO as an objective, impartial resource when 

writing budget resolutions. 

The agency also plays a key role in advising this Committee as it enforces budget 

rules. Without question, there are dozens of fine men and women employed by CBO, 

including analysts, management, and support staff. But more than 40 years since 

its founding, Congress has not undertaken a comprehensive review of CBO's 

structure and processes. In fact, CBO still operates under its original permanent 

authorization. I say this not to raise alarm about the future of CBO or question 

Congress's need for it. It's simply a fact that serious oversight has not been 

exercised to ensure the agency still has the tools it needs to be successful in 

fulfilling its mandate. 

That being said, our intention is the same with today's hearing as it will be with 

upcoming hearings. We want to better understand how CBO carries out its 

nonpartisan mission in service and support to Congress. During today's hearing, we 

will take a closer look at the organizational and operational structure of CBO, 

including its staffing, assumptions, processes, and work products. To provide an 

overview on the inner workings of this congressional support agency and how it has 

evolved over the years, I am pleased to welcome Dr. Keith Hall. 

Dr. Hall has served as Director of CBO since April of 2015, when he became the 

ninth director of the agency. Before we hear directly from Dr. Hall, I want to stress 

again that this series of hearings is not designed to be partisan or to invite "cheap 

shots" against an agency so vital to the Congress's ability to budget independently. 

However, there are legitimate questions about how CBO operates, and I am 

hopeful that these hearings will shed light on how we can improve its operations to 

provide Congress what it needs in the 21st Century. 
4 

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To ensure CBO can effectively and efficiently carry out its mission, I am pleased we 

are advancing a comprehensive review through these oversight hearings. 

I look forward to productive conversations today with Dr. Hall. 
5 

Mr. YARMUTH. Thank you very much, Mr. Chairman, and congratulations on your new role. I look forward to working with you, 

and thank you for calling this hearing. 

All of us on the Budget Committee take our oversight role seriously, and I am very glad we will be discussing these important 

issues today. I hope that we will be just as diligent in our responsibilities to develop a budget proposal, and we will hear testimony 

from the Federal agencies that we expect to be significantly impacted by the President’s budget. Director Hall, thank you for your 

testimony in advance, and thank you for your service. 

Congress created the Congressional Budget Office to give us an 

independent and reliable source of budgetary information and expertise. For more than 40 years, CBO has fulfilled its mission, providing impartial, high-quality analysis to inform our decision making and improve our ability to protect the power of the purse. 

While everyone here is aware that Director Hall was appointed by 

congressional Republicans, expectations have always been that the 

CBO director will carry out his or her responsibilities without allegiance or deference to any political ideology or party. 

Same is true of the staff who are hired based on their ability and 

qualifications, not political affiliation. As a result, CBO produces 

its best analysis regardless of any desired outcome for an administration, the majority in Congress, or the congressional minority. 

Despite that commitment to objectivity, however, CBO has been 

the target of criticism, and I am sure we will hear some of that 

today. You have actually heard some of it from me over the years. 

Director Hall, I do not envy you. You have what I would argue as 

one of the most thankless jobs in Washington, and that is to be our 

objective referee. And coming from a basketball State, I know how 

loved the referees are. 

In an arena where passions run deep, your calls will often be embraced by one side while questioned by the other. One day, it is the 

Republicans complaining; the next, it is the Democrats. That has 

been a reality in Congress since CBO’s inception. But there has 

been a dramatic shift recently in the treatment of CBO, and as 

members of the Committee this should be deeply troubling to us 

all. Questioning and fair criticism of CBO have morphed into more 

caustic attacks. Many have crossed the line, and much of this friction seems to center on analysis of my Republican colleagues’ efforts to repeal the Affordable Care Act. 

Look, I get it. I would not want to defend increasing number of 

uninsured Americans by 20 million, or causing premiums to skyrocket, particularly when there is no viable plan for replacement. 

But I am not sure what you thought CBO’s analysis would show. 

The Affordable Care Act expanded coverage through three related strategies: requiring insurance companies to make meaningful coverage available to all, requiring individuals to get covered, 

and subsidizing premiums to make coverage affordable. If you end 

the individual mandate, which we have just done, people will go 

without coverage. If you end subsidies that help families afford insurance, people lose coverage. 

If you take away consumer protections and once again allow insurers to play games, premiums will increase for everyone who is 

not in perfect health. People lose coverage. There is no way around 

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6 

the fact that repealing the Affordable Care Act will result in millions of American families losing health coverage, and there is no 

way to defend that to the American people. 

So, with nowhere to turn, many of my Republican colleagues unfairly went after the CBO, inappropriately impugning the integrity 

of the agency and the staff. I want to be clear. I think Congress 

has every right, even a duty, to review CBO’s work and ask questions. And CBO needs to be forthcoming in providing explanations. 

Democrats have certainly raised questions about assumptions or 

interpretations. But what we have not done is call into question the 

integrity of the institution or individual staff members. It is all too 

easy these days to take refuge in information that tells us only 

what we want to hear. But that does not lead to sound policy. 

CBO does not exist to give us the information we want to hear. 

Its job is to give us the information we need to make informed, responsible decisions. It is one of the few institutions in Washington 

that serves that role. Attacks on the CBO are not just attacks on 

Director Hall and his staff; they are attacks on our integrity as a 

deliberative body. They reduce trust in government and undermine 

the standards on which a functioning democracy depends. 

Today, I hope to hear from you, Dr. Hall, about how you ensure 

your work is objective and the steps you have taken to increase 

transparency at CBO. I would like to learn more about your expert 

staff, technical capabilities, and about any need for additional funding or tools. You will likely hear from us disagreements with some 

of your methodologies. 

I think some will challenge you on the process and will encourage you to look at alternative methods. I think that is all fair game 

and I look forward to that discussion. 

Thank you again, Dr. Hall, for your leadership at CBO and for 

testifying today. I yield back. 

[The prepared statement of Mr. Yarmuth follows:] 

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Ranking Member John Yarmuth's Opening Statement: 

Hearing on CBO'S ORGANIZATIONAL AND OPERATIONAL STRUCTURE 

Washington, January 30, 2018 

As prepared for delivery- House Budget Committee Ranking Member John Yarmuth 

Director Hall, thank you for your testimony, and for your service. 

Congress created CBO to give us an independent and reliable source of budgetary information 

and expertise. For more than 40 years, CBO has fulfilled its mission, providing impartial, highquality analysis to inform our decision-making and improve our ability to protect the power of 

the purse. 

While everyone here is aware that Director Hall was appointed by Congressional Republicans, 

expectations have always been that the CBO Director will carry out his or her responsibilities 

without allegiance or deference to any political ideology or party. The same is true of the staff 

who are hired based on their ability and qualifications, NOT political affiliation. As a result, 

CBO produces its best analysis regardless of any desired outcome for an Administration, the 

majority in Congress, or the Congressional minority. 

Despite that commitment to objectivity however, CBO has been the target of criticism. And I'm 

sure we will hear some of that today. 

Director Hall, I do not envy you. You have, what I would argue, is one of the most thankless 

jobs in Washington--and that is to be our objective referee. And in an arena where passions run 

deep, your calls will often be embraced by one side, while questioned by the other. But there 

has been a dramatic shift recently in the treatment of CBO- and as members of this Committee 

this should be deeply troubling to all of us. Questioning and fair criticism of CBO have morphed 

into more caustic attacks, many that have crossed the line. And much of this friction seems to 

center on analysis of my Republican colleagues' efforts to repeal the Affordable Care Act. 

Look, I get it. I would not want to defend increasing the number of uninsured Americans by 20 

million, or causing premiums to skyrocket-- particularly when you have no viable plan for 

replacement. 

But I'm not sure what you thought CBO's analysis would show. The Affordable Care Act 

expanded coverage through three related strategies: requiring insurance companies to make 

meaningful coverage available to all, requiring individuals to get covered, and subsidizing 

premiums to make coverage affordable. If you end the individual mandate, people will go 

without coverage. If you end subsidies that help families afford insurance, people lose coverage. 

If you take away consumer protections and once again allow insurers to play games, premiums 

will increase for everyone who is not in perfect health, and people lose coverage. 

There is no way around the fact that repealing the Affordable Care Act will result in millions of 

American families losing health coverage, and there is no way to defend that to the American 
8 

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people. So with nowhere to turn, many of my Republican colleagues unfairly went after the 

CBO, inappropriately impugning the integrity of the agency and its staff. 

I want to be clear, I think Congress has every right even a duty- to review CBO's work and 

ask questions. And CBO needs to be forthcoming in providing explanations. Democrats have 

certainly raised questions about assumptions or interpretations. But what we haven't done is 

called into question the integrity of the institution or individual staff members. 

It is all too easy these days to take refuge in information that tells us only what we want to hear, 

but that does not lead to sound policy. CBO does not exist to give us the information that we 

want to hear. 

Its job is to give us the information needed to make informed, responsible decisions. It is one of 

the few institutions in Washington that serves that role. Attacks on the CBO aren'tjust attacks on 

Director Hall and his staff-they are attacks on our integrity as a deliberative body. They reduce 

trust in government, and undermine the standards on which a functioning democracy depends. 

Today, I hope to hear from you, Dr. Hall, about how you ensure your work is objective and the 

steps you've taken to increase transparency at CBO. I'd like to learn more about your expert 

staff, technical capabilities, and about any need for additional funding or tools. 

You'll likely hear from us disagreements with some of your methodologies. I think some here 

will challenge you on your processes and will encourage you to look at alternative methods. 

These are all fair questions and adhere to our committee's commitment to oversight. But I would 

remind my colleagues that questioning the character or integrity of Dr. Hall or CBO staff has no 

place in this Committee or anywhere in Congress. 

Thank you again, Dr. Hall for your leadership at CBO and for testifying today 
9 

Chairman WOMACK. Thank you, Mr. Yarmuth. In the interest of 

time, if any other members have opening statements, I would ask 

that they be submitted for the record. 

Chairman WOMACK. I would like to now introduce and recognize 

the director of the Congressional Budget Office, Dr. Keith Hall. Dr. 

Hall, thank you for your time today, and let me just say, from a 

personal standpoint, how enjoyable it was yesterday to visit the 

fourth floor of the Ford Building and the great staff work that is 

taking place over there with the Congressional Budget Office under 

your leadership. 

The Committee has received your written statement and it will 

be made part of the formal hearing record. You have 10 minutes 

to deliver your oral remarks, and the floor is yours. Thank you, sir. 

STATEMENT OF KEITH HALL, DIRECTOR, CONGRESSIONAL 

BUDGET OFFICE 

Mr. HALL. Chairman Womack, Ranking Member Yarmuth, and 

members of the Committee, thank you for inviting me to testify 

this morning about CBO’s organization and operations. And thank 

you for your support and guidance. We at CBO have long relied on 

the Budget Committees to explain our role to others in Congress. 

We also rely on you to provide constructive feedback and guidance 

on Congress’ priorities. The work on your part has been key to our 

success over the years. 

I would like to make 10 points in my remarks, and then I look 

forward to talking with you about how we can serve Congress better. 

First, lawmakers created CBO to give the Congress a stronger 

role in budget matters. CBO was established under the Congressional Budget Act of 1974 to provide objective, nonpartisan information that would support the budget process. CBO’s mission is to 

help the Congress make effective budget and economic policy. In 

carrying out that mission, the agency offers an alternative to the 

information provided by the Office of Management and Budget in 

the Executive Branch. 

Second, the Congress sets CBO’s priorities. CBO follows processes specified in the statute or developed by the agency in concert 

with the Budget Committees and congressional leadership. CBO’s 

chief responsibility under the Budget Act is to help the Budget 

Committees with matters under their jurisdiction. The agency also 

supports other Committees, particularly the Appropriations, Ways 

and Means, and Finance Committees and leadership. 

Among CBO’s statutory requirements is producing certain reports, the best known of which is the Annual Budget and Economic 

Outlook. That report includes CBO’s baseline budgetary and economic projections. CBO is also required by law to produce a formal 

cost estimate for nearly every bill that is approved by a full Committee of either House or Senate. Those cost estimates are only advisory. They can but do not have to be used by it to enforce budgetary rules or targets. Moreover, CBO does not enforce such budgetary rules, the Budget Committees does. 

Third, CBO produces a lot of work each year. For example, last 

year the agency published 740 formal cost estimates, provided technical assistance to congressional staff as they developed literally 

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10 

thousands of legislative proposals and amendments, and it has 

published many reports about the budget, the economy, and related 

issues. 

Nevertheless, because of limited resources, the number of estimates and analyses that CBO can produce falls short of congressional requests. Moreover, we must balance our commitment to respond quickly to the Congress with our professional responsibility 

to release estimates and analysis only when their quality is high 

enough. 

Fourth, in order to provide Congress with the high-quality analysis that it needs, CBO staff has expertise in many areas. Among 

CBO’s roughly 235 people, the largest concentration of expertise is 

in the area of health. Other areas of focus include national security, labor, taxes, energy, and macroeconomics. 

Maintaining a broad array of expertise allows CBO to respond to 

policymakers needs quickly. Analysts are organized into a number 

of divisions but much of CBO’s work requires work from more than 

one division. CBO analysts always pursue high quality and accuracy. They approach issues with a detailed understanding of Federal programs and the tax code. 

They carefully and critically read the relevant research literature. They painstakingly analyze data collected by the government, statistical agencies, and by private organizations. And they 

regularly consult with a diverse range of outside experts, including 

professors, analyst think tanks, representatives of industry groups, 

other private sector experts, and government employees of the Federal, State, and local levels. Some of the consultations occur during 

periodic meetings with CBO’s panel of Economic Advisers and 

panel of Health Advisers. 

Fifth, CBO’s analysis is objective, impartial, and nonpartisan. We 

maintain our objectivity in a number of ways. One is that we make 

no policy recommendations. Another is that we hire people on the 

basis of their expertise—nearly 80 percent of CBO’s employees 

have advanced degrees—and without regard to political affiliation. 

We carefully consider whether potential analysts can perform objective analysis, regardless of their own personal views, and we enforce strict rules to prevent employees from having financial conflicts of interest and to limit their political activities. We aim to reflect the full range of experts’ views as we present the elected consequences of proposals being considered by the Congress. Our estimates are inherently uncertain, but our goal is to produce estimates that are in the middle of the distribution of possible outcomes. 

Sixth, the models do not produce CBO estimates, CBO does. 

CBO’s estimates often require projections of how people and institutions would respond to proposed changes in law. A computer 

model is one tool that analysts may use to make such a projection. 

There are various kinds of models, such as complex simulation 

models, regression models, and calculations in the spreadsheets. 

CBO’s models are constantly being enriched and improved. 

Nonetheless, models often cannot show the full scope of the effects of the legislative proposal. Analysts must routinely go further, 

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11 

tion so the estimates correspond as closely as possible to what the 

best available research suggests. 

Seventh, CBO has a rigorous system of checks and balances. All 

of CBO’s cost estimates and reports are reviewed internally for objectivity, analytical soundness, and clarity. That process involves 

many people at various levels in the agency. Analysts’ consultations with outside experts help them hear all perspectives on an 

issue, and we continually revisit our past work and learn from the 

differences between our projections and actual outcomes. We also 

compare our analysis to others work and incorporate outside feedback into our projects. 

Eighth, CBO prioritizes transparency. Since its inception, the 

agency has used many approaches to be transparent. To begin 

with, CBO’s cost estimates and publications include documentation 

of the basis of their findings. 

In addition, we document the revisions through our budget projections and estimates. We report on the accuracy of our projections, including our projections about the economy, spending, revenues, and health insurance subsidies. We publish analysis of how 

sensitive our estimates are to key parameters and we seek external 

review of our reports before they are released and of the methods 

in which are products are based. 

CBO allows promotes transparency by providing broad access. 

When CBO completes a formal cost estimate, it is made immediately available to all Members of Congress, their staff, and the 

public on CBO’s website. Furthermore, CBO’s analysts regularly 

explain their analysis to congressional staff. For instance, earlier 

this month, in collaboration with the Congressional Research Service, my colleagues gave a presentation to 150 congressional staff 

members about how CBO develops estimates of health insurance 

costs and coverage. 

Unfortunately, the pace of congressional action sometimes limits 

the time available for providing extensive explanation of estimates. 

And because the overall demand for CBO’s work is high and our 

resources are constrained, we need to balance requests to explain 

more about finished analysis with requests for analysis. And with 

our other responsibilities, such as regularly updating our baseline 

projections. 

Ninth, CBO evolves as the needs of Congress evolve. Though 

CBO has remained true to its original mission, we work with the 

Congress in ways probably not envisioned when the agency was 

first created. For example, as legislation has grown more complex, 

we found ourselves spending more time providing preliminary analysis and technical assistance during the drafting stage. And we are 

being asked more often to prepare cost estimates for bills that are 

heading for votes without being marked up by Committees first. 

To accommodate the Congress’ needs and agendas, CBO shifts 

staff and develops new analytical tools. For example, we developed 

significant resources to strengthen our ability to analyze healthcare 

issues, so we would be prepared for large-scale legislative proposals 

on that front. Similarly, we improved our capability to study how 

legislative proposals would affect the economy and thus the budget 

as the Congress’ desire for dynamic analysis intensifies. 

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12 

Tenth, CBO’s always looking for ways to do things better. For example, we are reviewing and updating every aspect of our simulation model of health insurance coverage which forms the backbone 

of our budget projections related to Federal healthcare spending for 

people younger than 65. 

In addition, we will further improve our capability to perform dynamic analysis, as well as our ability to analyze how changes in 

Federal regulations affect the economy and the budget. 

Responsiveness and transparency are top priorities of mine and 

CBO has plans to bolster them further. The agency will make 

greater use of team approaches to handling surges in demand for 

analysis of particular issues. We will increase the public documentation of our computer models. We will also do more to explain 

how analysts employ models while producing estimates. 

The extent to which CBO can accomplish these objectives will depend partly on whether we receive the funding we requested for 

them. As always, we look for ways to serve you better. I welcome 

your suggestions. 

[The prepared statement of Keith Hall follows:] 

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Keith Hall 

Director 

Before the 

2018 
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Overview 

Chairman Womack, Ranking Member Yarmuth, and 

Members of the Committee, thank you for the opportunity ro discuss the work of the Congressional Budget 

Office. As you know, CBO's mission is providing 

nonpartisan budgetary and economic analysis to support the work of this Committee and the Congress as a 

whole. My colleagues and 1 are devoted to that mission, 

and this testimony describes how CBO has executed it 

this year and how we plan to expand our work in the 

future. 

I also want to take this opportunity to thank you for 

your support and guidance. We at CBO have long 

relied on the budget committees to explain to others in 

the Congress what our role is, to provide constructive 

feedback on how we can best serve the Congress, and 

to provide guidance on what legislative developments 

arc occurring and what the Congress's priorities are. 

1hat work on your part has been key co our success over 

the years. 

CBO's Work in 2017 

In the past year, we have provided the Congress with 

740 formal cost estimates and mandate statements, 

thousands of informal cost estimates, 128 scorekeeping 

tabulations, 86 analytic reports and working papers, 

dozens of files of data underlying budget and economic 

projections, and numerous other publications. 1 Many of 

the cost estimates were produced under very tight time 

constraints and required extraordinary efforrs by our staff 

to meet legislative deadlines. 

We also underrook new initiatives to enhance our 

responsiveness and transparency. We reorganized work 

processes and shifted resources to areas of high demand. 

\Xle published more evaluations of our projections about 

the economy, spending, and health insurance subsidies. 

We documented more of our analytic methods-about 

flood insurance, pension benefit guarantees, and health 

care for the military, for example. And we gave more 

explanations of changes in our estimates, addressing 

issues ranging from Social Security to options for changing Medicare. 

CBO's Future Plans 

In the next two years, CBO plans to continue to support 

the budget committees and the Congress by producing 

l. For more detail, see Congressional Budget Office, The 

Congressional Budget Office's U!Ork in 2017: A Report to the 

Congress {January 2018), www.cbo.gov/publication/53460. 

budget and economic baseline projections, reports abour 

those projections, and cost estimates for many proposals, 

including all legislation reported by committees. Other 

major products will include a volume of policy options 

that would reduce budget deficits, reports on the longterm budge~: outlook, analyses of the President's budget 

proposals, monthly budget reviews, and policy analyses 

on a broad array of topics of interest to Congressional 

committees. CBO is reviewing and updating every aspect 

of irs simulation model of health insurance coverage, 

which forms the backbone of its budget projections 

related to federal health care spending for people younger 

than 65. In addition, CBO will further develop its 

capabilities to assess the macroeconomic effects of fiscal 

policies and the ways that changes in federal regulations 

affect the agency's baseline budget projections. 

Responsiveness and transparency are top priorities of 

mine, and we have plans ro bolster them further. We will 

make greater use of team approaches to handle surges in 

demand fOr analysis of particular issues, We will increase 

public documentation of our computer models. We will 

also do more to explain how analysts employ those tools 

as part of the process for producing estimates. For a cost 

estimate, for example, an analyst identifies the ways in 

which a proposal might affect the budget and assesses 

which of them would probably have substantial effects. 

'The analyst also consults experts and examines the 

most relevant data and research to form a basis for the 

estimate-which includes determining which models to 

usc (if any), what information to pur into those models, 

and how to use their output in combination with other 

available information. In shorr, estimates arc produced 

not by models bur by analysts; a model is only one of 

many tools that they might use. 

We will be able to make significant progress on our plans 

to boost responsiveness and transparency if we receive 

funding for fiscal year 2018 within the range that the 

Senate and House Appropriations Committees have 

recommended ($48.1 million and $48.5 million, respectively). If we receive the funding available under the continuing resolution currently in effect for this year ($46.2 

million), we will make less progress. Moreover, CBO's 

ability to buy data and research and to pay for other 

standard activities would be severely limited under the 

funding specified in the continuing resolution, and the 

agency's performance of its mission would be degraded. 

Many initiatives of great interest to the Congress could 

be undertaken only if CBO had more employees, so 
15 

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we have submitted a budget request to hire 8 new 

staff members in 2019 to bolster our responsiveness 

and transparency, as part of a pian to hire a total of 

20 by 2021. The new staff would help CBO respond 

to requests for information more quickly when there 

is a surge in demand. They would also allow CBO to 

supply more information about its analysis and models 

without reducing the valuable services that it provides to 

the Congress at its current staffing level. In the next two 

years, CBO also proposes to expand analytical capacity 

by adding new health care analysts and creating additional on-site capacity to use sensitive data securely. 

I am delighted to talk with you about our work today 

and would be at any time in the future as well. I am 

always happy to meet with Members of Congress or to 

chat on the phone. In addition, our employees meet 

frequently with Congressional staff to e.."<plain our 

analyses and to answer questions individually and in 

groups, and we have plans to be in still better contact. 

For instance, earlier this month, in collaboration with 

the Congressional Research Service, my colleagues gave 

presentations to 150 Congressional staff members about 

how CBO develops estimates of health insurance costs 

and coverage. We are constantly looking for ways to serve 

your needs better, and I welcome your suggestions. 

CBO's Role in Support of the Congress CBO was established under the Congressional Budger 

Act of 1974 to provide information that would support 

the Congressional budget process and help the Congress 

make effective budget and economic policy. CBO's work 

follows processes specified in that law and subsequent 

laws or developed by the agency in concert with the budget committees and rhe Congressional leadership. The 

agency's chief responsibility under the Budget Act is to 

help the budget committees with the matters under their 

jurisdiction. CBO also supports other Congressional 

committees-particularly the Appropriations, Ways and 

Means, and Finance Committees, as the Budget Act 

requires-and the leadership of the House and Senate. 

The agency is committed to providing information that is: 

• Objective-representing not the personal opinions of 

CBO staff but the consensus and diversity of views of 

experts from around the country; 

• Insightful-applying the best new evidence and 

innovative ideas as well as the lessons of experience; 

• Timely-responding as quickly as possible to the 

needs of rhe Congress; and 

• Clearly presented and explained-so that 

policymakers and analysts understand the basis for 

the agency's findings and have the opportunity to 

question rhe analysis and methods used. 

In keeping with CBO's mandate to provide analysis thar 

is objective as well as impanial, the agency makes no policy recommendations. Instead, it strives to present fully 

and fairly the likely consequences of alternative proposals 

being considered by the Congress so that lawmakers can 

make informed policy choices. 

All of CBO's estimates and reports are reviewed intertully for objectivity, analytical soundness, and clarity. 

That rigorous process involves multiple people at diffe,rent levels in the organization. In addition, CBO consults 

with numerous outside experts who represent a variety 

of perspectives. The experts include professors, analysts 

at think tanks, representatives of industry groups, other 

experts in the private sector, and people working for 

federal agencies and for stare and local govcrnmems. 

Maintaining high-quality work in the face of its many 

demands is a task that CBO rakes very seriously. The 

agency must constantly balance its commitment to 

respond quickly to the Congress's needs with its professional responsibility to release reports and estimates 

only when they reach sufficient quality. Part of CBO's 

success is built on its ability to strike that balance. 

Unfortunately, the conflicting demands of speed and 

quality mean that CBO's analyses may sometimes take 

longer than the Congress hopes. 

CBO is also committed to maintaining a level playing 

field with regard to the information and analysis that it 

provides-ensuring that its work is made widely available 

to the Congress and the public. The agency releases publicly all of its formal cost estimates and analytic reports. 

It delivers its work to interested Members of Congress 

and their staff, including in particular the sponsor of 

legislation or requester of a report, the Chairman and 

Ranking Member of the committees with jurisdiction 

over the subject at hand, and the budget committees. At 

about the same time, the agency posts the work on its 

website. In addition, an email service, Twitter announcemenrs, and RSS (really simple syndication) feeds notifY 

subscribers when the agency publishes work. And CBO 
16 

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continuallv strives to make irs work more accessible on 

its website~ and on its social media platforms. For example, the agency has had a constructive dialogue in the 

past year with a group of nonprofit organizations about 

how to present online information about cost estimates 

more dearly. 

In some circumstances, though, the needs of the 

Congress lead CBO to keep the results of an analysis 

confidentiaL Such analyse,~ include informal cost estimates and other types of information that arc often 

prepared when committees and leadership are evaluating 

alternative proposals to accomplish their goals, have not 

made any specific proposals public, and need the flexibility to modifY their proposals-sometimes in response to 

CBO's preliminary estimates-before they become public In fact, CBO's analysts often provide informal, preliminary estimates to committee staff fOr a broad range 

of legislative options, making possible the consideration 

of different approaches before a specific legislative path is 

decided upon. In such situations, CBO recognizes that 

the confidentiality of its work is critical to committees' 

deliberations, so it keeps its informal estimates confidential as long as the proposals are nor made public. (Such 

confidentiality generally does not apply to proposals that 

differ only in minor details from ones that are in the 

public domain.) However, once such a proposal becomes 

public-as introduced legislation or through public discussion of its major elements-CEO makes its estimate 

for that proposal available to any interested party in the 

Congress. 

Despite high productivity by a dedicated staff, CllO 

expects that the number of estimates and other analyses 

it can produce will fall considerably short of the number 

of Congressional requests. 1he demands on the agency 

remain inrense. For example, the workload associated 

with the analysis of appropriations continues to be heavy, 

and the Congress remains acutely interested in analyses 

of the Affordable Care Act and numerous proposals for 

changes to that law, to Medicaid, and to the Children's 

Health Insurance Program. Other issues arise frequently 

and create a heavy demand for analysis; for example, 

over rhe past year, CBO analyzed legislation related to 

immigration, veterans' health, water rights, opioid abuse, 

education, and nutrition. Analyzing the possibilities and 

proposals has strained the agency's resources in many 

areas. CBO regularly consults with committees and 

Congressional leadership to ensure that its resources are 

-·---·--··--· ---~· .. ---

focused on the work that is of highest priority to the 

Congress. 

CBO's Goals for 2018 and 2019 In 2018 and 2019, to carry out its mission of serving the 

Congress, CBO will focus on meeting three goals: 

• Continuing to provide the Congress with budget and 

economic information that is objective, insightful, 

and timely; 

• Continuing to present and explain the methodology 

and results of CBO's analyses clearly and pursuing 

opportunities to enhance the transparency of the 

agency's work; and 

• Continuing to improve CBO's internal operations. 

This section describes CBO's plans if standard activities 

arc funded and the agency's current staffing level is paid 

for. The ways in which additional funding would bolster 

CBO's responsiveness and transparency and expand its 

analytical capacity are discussed in the following section. 

Continuing to Provide the Congress With Budget and 

Economic Information That Is Objective, Insightful, 

and Timely 

In 2018 and 2019, CBO will continue to provide 

estimates and mher analyses to assist the Congress in 

making budget and economic policy. To make its work 

more responsive, and in particular to increase its capacity 

to accommodate surges in demand, CBO has recently 

shifted some of its existing resources. For example, the 

agency has reorganized the way it approaches various 

topics: Teams now have more people prepared to share 

work in certain areas, such as immigration, health insurance coverage, nutrition programs, and veterans' programs. CBO has become more efficient in reponing the 

effects of intergovernmenral and private-sector mandates 

and in providing administra(ive assistance, which has 

allowed it to increase the number of employees in areas 

with persistently high demand-the analysis of appropriation bills and of legislation affecting health insurance 

coverage, nutrition programs, and natural resources. And 

an editor is now dedicated to assisting with cost estimates, giving analysts and managers more rime for other 

aspects of the work. 

As it has throughout irs history, the agency will ensure 

that its work is ohjective, insightful, and timely. For 
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example, the agency's cost estimates will nearly always be 

available to the Congress before a floor vote on legislation. Moreover, the agency will make no policy recommendations but will strive to present fully and fairly the 

likely consequences of alternative policy proposals. 

Many of the products that CBO will produce in the 

next two years are specified by statute-for instance, 

the annual report on the outlook for the budget and the 

economy and cost estimates fOr bills reported by committees. The rest of CBO's analyses address issues being 

considered by the Congress, provide background information on budgetary and economic conditions that are 

relevant for the consideration of legislation, or explain 

the tools rhat the agency uses in making projections and 

estimates. Accordingly, the specific projects that CBO 

undertakes this year and next will depend on budgetary and economic developments and on requests from 

Congressional committees and leadership. CBO regularly consults with Members and staff about what topics 

and types of analyses would be most valuable to the 

Congress, and the agency responds as rapidly as possible 

to shifts in Congressional interest. 

In each of the next two years, CBO plans to produce the 

following types of output: 

• More than 600 formal cost estimates, most of which 

will include not only estimates of federal costs but 

also assessments of the cost of mandates imposed on 

state, local, and tribal governments or the private 

sector; 

• ThousanJs of prdiminary, informal cost estimates, 

the demand for which is very high as committees seek 

a dear picture of the budgetary impact of proposals 

and variants of proposals before they formally 

consider legislation; 

• More than 100 scorekeeping tabulations, including 

account-level detail for individual appropriation 

acts at all stages of the legislative process, as well as 

summary tables showing the status of discretionary 

appropriations (by appropriations subcommittee) and 

running totals on a year-to~date basis; 

• Dozens of analytic reports and papers-generally 

required by law or prepared in response to requests 

from the Chairmen and Ranking Members of key 

committees-about the outlook fOr the budget and 

the economy, major issues affecting that outlook 

under current law, the budgetary effects of policy 

proposals that could change the outlook, and a broad 

range of related budget and economic topics in such 

areas as defense policy, infrastructure, Social Security, 

and housing; 

• Numerous files of data documenting detailed 1 0-year 

baseline budget projections, 1 0-year economic 

projeC(ions, long-term budget projections (spanning 

30 years), and other information underlying analytic 

reports-all of them posted on CBO's website; and 

• Descriptions of policy options that would reduce 

budget deficits, as well as publications that increase 

the transparency of CBO's work and communicate 

about that work graphically. 

The analyses requested by the Congress often involve 

new and complex issues, and the context for recurring 

issues is constantly changing. CBO expends substantial 

resources to understand those issues and estimate the 

impact of policy proposals. Many of CBO's analyses 

involve assembling evidence from numerous sources, 

synthesizing the implications of that evidence, and 

building models to quantify effects of specific proposals 

and variations of them. To be ready to provide timely 

responses to requests, the agency makes ongoing investments in that process. For example, the agency is now 

in the process of updating and refining its models for 

analyzing potential changes to Medicare. 

Continuing to Present and Explain the Methodology 

and Results of CBO's Analyses Clearly and Pursuing 

Opportunities to Enhance the Transpareney of the 

Agency's Work 

CBO routinely works hard to make irs analysis transparent, but of late, the agency has shifted existing resources 

toward making it still more so. CBO will publish new 

reports in 2018 describing its processes for producing 

economic forecasts, budget baselines, and cost estimates 

for major legislation affecting health insurance. Key staff 

will also make presentations on Capitol Hill about those 

processes. 

And CBO wi!I increase public documentation of its 

modeling efforrs by publishing more slide decks, working papers, appendixes, supplemental data, related 

spreadsheets, and other technical material. 1he efforts to 

explain models better will include rhe fOllowing: 
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• The agency will explore ways w make more of the 

supporting documentation for the methods used 

in baseline projections and cost estimates publicly 

available. Such documenrarion could provide 

information about key variables underlying particular 

cost estimates-inflation rates, for instance. It also 

could show detailed results and associated formulas 

underlying estimates and link published estimates 

more copiously to supplemental information. 

• In updating its simulation model of health insurance 

coverage, CBO will get systematic feedback from the 

research community by making presentations about 

different aspects of the model as they are developed. 

rlhe agency will publish conceptual overviews and 

documentation of all pans of the completed model 

as well as more detailed information-including 

computer code-of key aspects of the modeling. 

(Some aspects of the modeling must not be 

released publicly so that CBO can maintain the 

confidentiality of the data.) 

• CBO will develop an interactive version of its 

model for projecting spending on discretionary 

programs. That interactive model will help researchers 

understand and replicate the methods that underlie 

roughly 40 percent of CBO's formal cost estimates. 

• The agent.)' will update elements of its long-term 

budget model and provide technical documentation 

and computer code explaining the updates. 

• CBO will create a publicly available tool to allow 

users to examine how certain changes in economic 

projections can affect projections of rhe federal 

budget. 

• The agency will revise its model for projecting the 

budgetary effects of changes to laws governing 

medical malpractice-after carefully reviewing the 

literature, consulting experts, and analyLing changes 

in laws in various states and the results of those 

changes. 1he agency will publish revised estimates of 

the budgetary effects, explain the reasons for making 

revisions to the methodology, document how the 

revised model works, and make computer code for it 

available. 

• CBO will post on its website a tool for examining 

the costs of different military force structures (with 

different numbers of fighter squadrons and ships, for 

instance). 

• The agency will release a working paper about CBO'.s 

model of the maximum sustainable output of the 

economy and the computer code that generates 

results discussed in that paper, helping interested 

researchers replicate the agency's analytical results. 

The shifts in resources that will allow CBO to perform 

those activities involve trade-offs. For example, between 

surges in demand for analyses of particular topics, CBO 

will use time to document existing models-time that 

might otherwise have been spent developing new modeling capacity. 

Although CBO is undertaking many new initiatives, 

transparency has long been a standard part of its work. 

To begin with, its publications go well beyond simply 

presenting results; instead, CBO explains the basis of 

its findings so that Members of Congress, their staff, 

and outside analysts can understand the results and the 

methodologies used. In particular, although much of the 

work that CBO does is extremdv technical in nature, the 

agency devotes substamial time ;nd energy to presenting 

the work as dearly and nontechnically as possible. It 

continually seeks feedback about those efforts in order to 

ensure their effectiveness. 

CBO also seeks extensive external review of its analytic 

reports before they are released and of the methodologies on which its products are based. In the coming 

two years, input from outside experts and extensive 

external review will remain an important component of 

transparency: 

• CBO will continue to solicit e.xterna! professional 

review of its work so that the agency's analyses reflect 

both the consensus and diversity of views of experts 

from around the country. 

• The agency's cost estimates will often draw on 

consultation with outside experts. 

• CBO's Panel of Economic Advisers will meet twice a 

year to provide inpm on the agency's latest economic 

forecast and other issues, and CBO's Panel of Health 

Advisers will meet to discuss key issues affecting the 

agency's baseline projections and analyses of proposals 

and examine new research in health care and health 
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care financing. CBO will also regularly consult with 

those distinguished experts and other experts for 

guidance on rhc agency's work on a broad range of 

topics. 

CBO always tries to clearly present the evidence underlying irs analyses and the way that the agency assesses that 

evidence. To that end. CBO's documents and related 

information will aim to go well beyond presentations of 

results: 

• Formal cost estimates will describe their basis-that 

is, the information that CBO collected and how that 

information was used in constructing the estimates. 

• ~nle agency will document and explain the revisions 

to its budget projections in each successive baseline, 

and it will report on the accuracy of its projections. 

• Many of CBO's reports will provide substantial 

discussions of the relevant research literature and 

CBO's modeling approaches. 

And the agency will continue to promote transparency 

by providjng broad access: 

• When CBO completes a budget or economic 

projection, a cost estimate for a public piece of 

legislation, or another rype of analysis, it will make 

the re.~ults of that analysis available immediately to all 

Members of Congress, their staff, and the public. 

• CBO's analysts will regularly explain details 

underlying the agency's estimates and other analyses 

to interested Congressional sratT. Immediately after 

a major cost estimate is released, CBO often reaches 

out to staff of key committees. Beginning this year, 

CBO will invite a wider range of Congressional staff 

to participate in telephone calls, allowing them to ask 

questions soon after an estimate is released. 

• CBO will regularly update pages on irs website about 

the status of appropriations, methods for analyzing 

health insurance coverage, and dynamic analysis to 

make its work in those areas easier to find. 

• To promote discussion among experts in the field, 

CBO's analysts will present their work~including 

descriptions of their modeling approaches-in 

working papers and ar professional conferences. 

CBO undertakes and publishes analyses of the sensitivity of its estimates to key parameters. For example, an 

analysis of options w improve the financial condition 

of the Pension Benefit Guaranty Corporation's multiemployer program showed how the results would vary 

if key inputs to the analysis differed from CBO's expectations. Similarly, the agency's analyses of the economic 

effects of fiscal policies include alternative estimates that 

would apply if various effects were stronger or weaker 

than expected-such as the amount of short-term 

restraint provided by higher taxes or lower government 

spending or the response of the labor supply to changes 

in tax rates. 

The agency often responds to questions from Members 

of Congress about the methods used in its analyses. 

CBO's analysts spend a great deal of time meeting with 

interested Members of Congress and their staff to explain 

the details underlying cost estimates and reports. In its 

blog, CBO also highlights answers to questions that have 

frequently been raised by Members, sometimes explaining what the limitations of its analyses are and how new 

data and results from well-designed studies could help 

the agency better predict the potential effCcts of legislative proposals. 

Even though CBO devotes substantial time and energy 

to presenting its work as clearly and nontechnically as 

possible, the pace of Congressional acrion often requires 

the agency to produce analyses quickly. So the amount 

of explanation that can be provided when an estimate 

or analytic report is released is sometimes limited by 

the time available. And because the overall demand for 

CBO's work is high and its resources are constrained, the 

agency needs to balance requests ro explain more about 

finished analyses with requests for new analyses and with 

its other responsibilities, such as regularly updating its 

baseline budget and economic projections. 

Continuing to Improve CBO's Internal Operations 

In addition to focusing directly on serving rhe Congress, 

CBO devotes resources to attracting and retaining talented employees, developing their skills, and providing 

the support serVices and other infrastructure needed to 

help them be as productive as possible. 

CHO faces considerable competition in attracting and 

retaining highly educated and skilled employees. More 

than two-thirds of CBO's staff consists of economists 

and budget analysts, and CBO also requires managers 
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with the technical skills to lead and manage those 

employees' work. Talented economists and analysts are 

highly sought by government agencies, private analytic 

organizations, and other private companies. Many 

of CBO's economists and budget analysts could earn 

significantly more compensation working in the private 

sector. 

To evaluate the competitive market for its employees, CBO routinely compares their salaries with those 

of employees with similar backgrounds at organizations with which CBO competes. Those organizations include other government agencies, such as the 

Office of Management and Budget, the Government 

Accountability Office, the Federal Deposit Insurance 

Corporation, and the Federal Reserve. 1l1ey also include 

academic institutions and private companies. 

The compmsation gap between CBO and other federal 

agencies has become substantiaL For instance, in recent 

years, the Federal Reserve paid about $35,000 more than 

CBO could offer to people who had recently received 

their Ph.D. Among economists with doctorates who 

work in the federal government (excluding the Federal 

Reserve), about one-third earn more than $160,000; 

CBO's highesr-paid analysts can earn $165,000. 

Academia is another strong competitor for economists. 

Several of CBO's senior staff over the years have been 

former faculty members, and CBO regularly seeks to 

hire people who have just received their Ph.D. and loses 

many strong candidates ro positions in academia. Over 

the past three years, more than 60 percent of those to 

whom CBO has made offers have chosen to take an academic position instead. Compensation is an important 

factor in that decision; since 2000, pay for economists in 

academia has increased substantially, whereas the maximum salary that CBO <.:an offer, adjusted for inAarion, 

has fallen. 

To attract and retain talemed employees, CBO also relies 

heavily on rhe nonmonetary rewards of working at rhe 

agency. Fortunately, the appeal of rhe agency's mission to 

provide objective analyses, the intellectual challenges, the 

open and collaborative culture that the agency has mainrained since its fOunding, and the satisfaction of public 

service have enabled CBO to build a dedicated and 

skilled workforce. However, with the current limits on 

the salaries that CBO can pay in the competitive markers 

for economists, budget analysts, and other professionals, 

~ . "·~ .". '"' .. " - ··~" ... " . "'. .. . '"'""' ...... .. ·-" " . ... . - ~ . - - " 

retaining strong performers will be difficult over rhe long 

term. Compounding the problem is that the agency is 

seeing an increase in the retirement of experienced staff. 

Staff development both improves work products and 

helps CBO retain employees. For both purposes, the 

agency will continue to fund professional development, 

information technology training, and efforts to improve 

communication skills. Of course, to remain fiscally 

prudent, CBO wilt develop employees' skills by means 

of internal resources and those of sister agencies to the 

extent possible. 

How Additional Funding Could Bolster 

CBO's Responsiveness, Transparency, and 

Analytical Capacity 

In response to proposals that CBO provide information 

even more quickly and transparently than is possible 

with its current staffing-while continuing to meet 

its goal of providing objective, insightful, high-quality 

information-the agency proposes to dedicate additional 

resources to those efforts. Specifically, CBO proposes 

to hire 8 new employees in 2019 and a total of20 over 

the next three years-or more quickly, if the Congress 

chooses to appropriate the necessary funding more 

quickly than CBO is requesting. Certain proposals 

related to CBO's speed and transparency would require 

even more resources to implement to the extent possible. 

More resources would also help CBO improve its analytical capacity. Currently, the agency is putting special 

emphasis on two areas: analysis of federal ht:alth care 

spending and expanded access to data. CBO has already 

shifted some resources to bolster its work in those areas, 

and it is requesting additional funding for three new 

health care analysts and for on-site capacity to use sensitive data securely. 

Responsiveness 

With additional resources, CBO would be able to pursue 

rhree main strategies to produce cost estimates more 

quickly. First, the agency would hire more assistant 

analysts, who could move from one topic to another and 

provide support to more senior analysts when demand 

surged for estimates or analysis about a particular topic, 

such as health care, natural resources, or banking. 

Second, CBO would hire analysts to develop deeper 

expertise about certain topics, such as cybersecuriry and 

higher education policy, so that rhe agency would be 

better positioned to analyze new proposals in those areas. 
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Third, the agency would hire analysts to expand irs use 

of team approaches, in which work on large and complicated proposals is shared. 

Furthermore, CBO's proposed expansion of its analytical capacity, which is discussed bdow, would bolster 

the agency's responsiveness in the long term by creating 

a stronger base on which to build when starring new 

analyses. 

Transparency 

l11e agency is actively exploring ways ro provide additional information about its modeling that would be 

useful to the Congress, such as furnishing more public 

documentation, presenting the sensitivity of budgetary 

effects to changes in key parameters of policy proposals, and writing accessible source code for computer 

programs used in analyses. Additional funding would 

help CBO provide more intOrmation about models 

that examine health insurance coverage, the individual income tax system, labor force participation, how 

changes in the economy affect the budget, and many 

other issues. Also, cost estimates ofren involve creating extensions of old models and building new ones, 

and substantial additional documentation could make 

information about those models useful to people outside CBO, who lack access to the agency's internal data 

systems. 

In many cases, CBO produces cost estimates and baseline projections through complex processes rhat integrate 

information from numerous models and other analytical 

tools. Additional resources would allow CBO to explain 

more about those processes in reports, slide decks, and 

presentations. Such explanations would show how 

computer programs used in CBO's modeling fit into the 

broader scope of the agency's analysis, whid1 consists 

mainly of identifYing how proposed legislation would 

affect the budget; assessing which types of effects would 

be substantial enough to quantify; and integrating different types of research, on the basis of historical data, to 

project people's and institutions' responses to legislative 

changes. The processes generally differ for each estimate 

so that CBO can make the best usc of different types of 

research to model the effects of a particular legislative 

proposal. TI1e complexity of CBO's analysis, and rhe 

different analytical tools that are often brought to bear, 

make documentation and explanation important-but 

also time-consuming and resource-intensive. 

Added resources would also allow CBO to produce 

other kinds of information that would aid transparency. 

For instance, the results of models often depend on 

key parameters used in them, and CBO could provide 

more information about the basis for the values used. 

Additional funding would also help the agency turn its 

internal comparisons of projections and actual resultsfor the economy, revenues, spending, deficits, and 

debt-into public documents. 

Analytical Capacit)' 

Under current law, federal spending on the government's 

major health care programs will continue to rise substantially. Accordingly, in 2019, the agency anticipates 

spending a great deal of effort in projecting the costs of 

federal healrh care programs and in analyzing proposals 

to change those programs. Adding analysts to CBO's 

team would hdp the agem.-y produce a greater range and 

volume of analysis. 

Interest in legislative proposals related ro health care-on 

the part of committees of jurisdiction, the Congressional 

leadership, and the budget committees-remains very 

great. The enactment of the Affordable Care Act in 

2010 was followed by strong Congressional interest in 

analysis of that legislation and possible modifications 

to it, as wdl as in potential changes to Medicare or 

Medicaid. Recently, the Congress has devoted subsramial 

time to discussing proposals to repeal and replace rhe 

Affordable Care Act. Those devdopments have already 

boosted CBO's workload, and the agency anticipates that 

the Congress will request much more analysis of such 

proposals, related executive actions, and other potential 

changes. 

In addition to responding to those immediate concerns, 

CBO is engaged in longer-term projects, analyzing 

various aspects of the health care system and enhancing its future analytical capacity to assess the effects of 

legislation on that system and on the federal budget. 

Additional staff would enable CBO to make more rapid 

progress on the important effort of updating its simulation model of health insurance coverage without constraining its work on current legislative proposals. 

Furthermore, CBO would like to have access to more 

data-both data that analysts already use regularly and 

sensitive data that the agency hopes to obtain. Such 

on-site capacity would make CBO's use of data speedier 
22 

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TESTIMO'IY 

and more consistent. For example, expanded access w 

data would allow CBO ro: 

• Enhance irs projections of educational attainment, 

thereby improving its projections of total factor 

productivity and economic growth; 

• Improve irs modeling of various demographic 

characteristics-including marriage patterns 

and variation in fertility and mortality rates by 

socioeconomic status-which would bolster its 

projections of Social Security benefits and income tax 

receipts; 

• Better its understanding of the resources available to 

people in retirement, which would allow the agency 

to expand its analysis of tJ.milies' wealth to include 

Social Securiry income and income from defined 

benefit pensions; and 

• Enhance irs understanding of labor force 

participation by older people and changes in earnings 

inequaliry over rime, which would improve irs 

projections of Social Security benefits and people's 

behavior in claiming benefits. 

The additional resources needed for secure on-site capac~ 

ity would increase the quality and timeliness of CEO's 

work~its budget projecdons for the next 10 years and 

the long term, its cost estimates for legislative proposals, 

and its policy studies of issues that have significant budgetary and economic impacts. 

This testimony incorporates information from CBO's 

budget request for fiscal year 2019, which was prepared 

with contributions from Leigh Angres, Wendy Edelberg, 

Joseph E. Evans, Jr., Theresa Gullo, Mark Hadley, 

Deborah Kilroe, Jeffrey Kling, Cierra Liles, Terry Owens, 

Benjamin Plotinsky, Stephanie Ruiz, Mark Smith, and 

Robert Sunshine. 

The testimony is available on CBO's website at 

www.cbo.gov/ publication/5350 1. 

Keith Hall 

Director 
23 

Chairman WOMACK. Thank you, Dr. Hall, for your opening remarks. I look forward to the questions. The chair expects to be here 

for the entire duration of the hearing and as such I am going to 

defer my time until later in the sequence of Q&A. 

So, I will be yielding first to our members who I know are on a 

tough timeclock today because of the number of things that have 

been crammed into one day and the fact that the Republican retreat begins tomorrow. So, I will withhold my questions at the 

present moment and use those as we clean up the hearing at the 

end. Now I yield to my friend, the ranking member from Kentucky, 

Mr. Yarmuth. 

Mr. YARMUTH. Thank you, Mr. Chairman. I intend to do the 

same thing. I will sit to the bitter end with you. Thanks. 

Chairman WOMACK. For the first round of questions, I go to my 

friend from Oklahoma, Mr. Cole. 

Mr. COLE. Thank you, Mr. Chairman. I want to begin by thanking you for this hearing. I think this is something I know my good 

friend, the former Chairman, was planning to do as well. 

But it is really important for us to do and I want to begin, Dr. 

Hall, by thanking you and your staff. I have dealt with a lot of different CBO directors since I have been on this Committee, and 

with the staff, and it has been unfailingly professional and courteous no matter who was at the head of it. So, I think you head 

a very fine agency. 

I do not always agree, but I have never had any difficulty getting 

the explanations and the judgments, and that is fair enough. I do 

want to ask a couple of things, and my good friend from Kentucky 

talked about the Affordable Care analysis, and there is one area 

that I want to ask about. And it is sort of down in the weeds, and 

then I want to build on that and ask you how you come to assumptions, and models, and what kind of input if any Congress has as 

you build your predictions on a series of assumptions and models. 

As I recall—and I think I have mentioned this to you before 

when you were kind enough to come by office—in the model that 

was used there was an assumption that non-Medicaid expansion 

States would all become Medicaid expansion States. And therefore, 

people would get insurance; and therefore, they would lose insurance later on down. 

I quibble with that just because—and I am not basing this on a 

policy argument either way—I mean, I am not arguing for or 

against Affordable Care Act. I can just tell you, politically, in my 

State, that is just not going to happen. There was no way it was 

ever going to become a Medicaid expansion State. The population 

was heavily opposed. Just politically, it was not feasible. And 

frankly, the State did not have the money even for a 10 percent 

match at the time. 

So there are, literally, in that model of how many people would 

lose insurance, a bunch of people that do not have it now in the 

State of Oklahoma, would not get it because you would not have 

the Medicaid expansion, so therefore could not lose it. 

So, walk me through how you make those kind of assumptions, 

because I think when you make assumptions like that sometimes 

it would be helpful to—and maybe you do this, just talk to the 

Committee itself, both sides of the aisle, and say, ‘‘Okay, this is 

BU00-A363290 with DISTILLER

24 

what we are doing. Do you have a problem with this? Or do you 

think there is some fault in this or something else we should be 

thinking about?’’ We should not be making the final decisions, you 

should, but just a way in which you got more input back and forth 

between members and the institution which is here to serve them. 

Mr. HALL. Well, thank you for that question. That was actually 

a tricky part of the ACA for us because initially all States were required to expand. So, our initial estimates had 50 States expanding. Then when that was overturned, we, of course, did not anticipate that. So, we are now into an area we now have to sort of predict how many States will voluntarily expand and will not expand. 

Now, we have never been so extreme that we think all the States 

are going to expand. I think right now we anticipate that enough 

States right now have expanded that is covering about 50 percent 

of the population that could potentially be eligible. We see it going 

up to about 70 percent. So it is not so extreme where we go from 

100, from 50 percent to all the States will take it. So it is much 

lower than that. 

And that is a tricky thing because what we have done is we have 

looked at States, looked at their past behavior, looked at a number 

of things, how they have taken Federal money in the past. And sort 

of put them into categories. Buckets, if you will. And then from 

those buckets we assign some probability with each bucket that 

they will expand at some point over the next 10 years. 

Although we put States in the buckets, State A could actually be 

in a different bucket in reality. And State B could be moved back 

to that other bucket in reality. So, there is uncertainty in that. And 

we try not to focus too much on the individual States. Once we 

have States categorized, we then calculate the population in those 

three buckets and put some probabilities on that. 

Mr. COLE. Well, I am not going to ask an additional question. My 

time is limited here. But please tell us who made these decisions 

and is there any political dimension? I mean, literally, I think in 

a lot of these States the members on both sides of the aisle give 

you a pretty good opinion. Again, reserving for you to make the 

final decision; it is your estimate after all. 

Mr. HALL. Well, first of all, we spend some time deciding what 

are the different things that could influence whether a State expands or not. We had our large number of sort of dimensions under 

which we did that. And used that to sort of, I say, sort of put them 

in the buckets. Now, we work that up with consultation with folks. 

I had a briefing talking about how that was done, that sort of 

thing. I do not know exactly who we wound up talking with. We 

probably talked with some State insurance companies—— 

Mr. COLE. I do not want to be the first guy the Chairman chastises for running over time. 

Mr. HALL. Okay. 

Mr. COLE. So, thank you, Mr. Chairman. Thank you and we will 

visit about this again but thank you very much. 

Chairman WOMACK. Ms. Lee of California. 

Ms. LEE. Thank you very much. Thank you, Mr. Chairman, and 

our ranking member for this hearing. And I also thank you, Director Hall, for being with us today. Today’s hearing gives us an opportunity to really discuss how important CBO’s impartial analysis 

BU00-A363290 with DISTILLER

25 

is to Congress and to the American people. And I would like to reiterate the fact that Congress created CBO, so we could have clear 

guidance on budgetary matters to inform our work here and for the 

public, and it was not created so Republicans or Democrats could 

smear the organization’s impartial and nonpartisan analysis just 

because we do not like CBO’s scores. 

Last year, Director Hall and our ranking member mentioned the 

ACA. It is a fact the Republicans spent weeks attacking your organization’s score of their, quite frankly, terrible ACA repeal bill. 

They found it ridiculous when Speaker Ryan jammed through an 

updated repeal bill without a score in May. And that upon your 

analysis, though, it would reduce healthcare coverage by 32 million 

while increasing premiums for older Americans by as much as 850 

percent. 

So, can you just explain how your organization comes up with 

just the basic analysis of how many people will go uninsured? How 

you came up with that, and what else do you need from us in order 

to ensure that these attacks no longer happen? What is it you 

think we could do to make sure that your job could be accomplished 

without the partisan attacks? 

Mr. HALL. Well, I will start with the last question first briefly, 

it is things like the oversight hearings are really helpful to us. I 

would love the chance to talk about things, and one that I wish 

were able to do more is come to visit individual’s offices and make 

little presentations on things. I have never turned that down, but 

I think in hindsight I would have pushed into offices more when 

somebody has an issue to come in and talk about where we got the 

numbers and what we were thinking. 

On the ACA repeal, there are various versions of that. But there 

were some things that were kind of clear, right? There were aspects of it that were essentially reducing subsidies for people; 

things that were to reduce the expansion of Medicaid that would 

eliminate the mandate. 

So, those are things that are going to work to lower the coverage 

relative to our baseline. Even just saying those things without 

modeling it, and I think you are talking about a decline of probably 

tens of millions of people from coverage without the modeling. And 

with our modeling, we spent a lot of time doing this very, very 

carefully, very different aspects of it, and our best estimate, I 

think, on the final bill was something like 23 million-person decline 

in coverage overall. 

But it involved actually a very long process. There were a lot of 

steps to it. We used the famous healthcare simulation model. That 

was just a piece of it. We had to create several other models. We 

had to use models looking at the interaction with Medicare. We 

had to use a tax model-the Joint Committee on Taxation. 

So, it was a very complicated process. I cannot do it justice here, 

but we did make a presentation that I mentioned at the Congressional Research Service going through exactly what we did to get 

to that estimate. I can make those notes available to you, and we 

can think about doing another presentation if folks want to hear 

it. 

BU00-A363290 with DISTILLER

26 

Ms. LEE. So, do you think that it is the process that appeared 

flawed by those who attacked this? Or do you think it was the outcome of your analysis that was not liked? 

Mr. HALL. Yeah, I cannot guess. I think the numbers were very 

large for folks. And personally, I am not sure they should have expected anything but pretty large numbers. But we certainly can try 

to do better in explaining what we have done. 

Ms. LEE. Okay. And also—I have a few more minutes—I just 

want to ask you about the Trump administration and their criticism of the CBO. I remember they had indicated their budget 

would kick off with 3 percent growth and end the deficit within 10 

years, and CBO found that it would do no such thing. I think it 

was boosting growth instead, I think you came up with 1.8 percent 

or 1.9 percent. 

So, what is it? Again, is it the process or is it the outcome of your 

analysis that the administration also believes was not accurate? 

Mr. HALL. Well, I do not know that much about how they did 

their economic forecasting. They have not provided a lot of information on it. But certainly, this is part of the value, I think, of CBO. 

We did our own independent analysis. We did our own forecast on 

the economy. We looked at a lot of data. We are very, very careful 

about that. 

And when we publish our budget outlook, we have a lot of detail 

in there about how we get to our economic forecast and how that 

economic forecast affects our budget forecast. So, we are very transparent about that. 

Ms. LEE. Thank you, Mr. Hall. Thank you. 

Chairman WOMACK. Thank you, Ms. Lee. The gentleman from 

Georgia, Mr. Woodall. 

Mr. WOODALL. Thank you very much, Mr. Chairman, and thank 

you for holding the hearing today. You have got your work cut out 

for you, Mr. Chairman. I am reading from today’s Washington Post. 

They say, ‘‘If you are already bored with State of the Union coverage, tune in this morning for what we are dubbing Republicans 

versus the Congressional Budget Office.’’ 

It is hard to see how we get from where we are to where we want 

to be. and I thought my friend from California accurately expressed 

her frustration about partisan attacks on the Budget Office and 

then went in to use the CBO data to make partisan attacks on 

bills. And I think that is a challenge. 

When I go back and look at the ’74 Act—I think you said in your 

opening statement, Director—the CBO was created to give Congress a stronger role. I think what was actually true is the Budget 

Committee was created to give Congress a stronger role, and the 

CBO was corrected to advise and counsel the Budget Committee. 

In fact, under the original legislation, you were to be the staff of 

the Budget Committee—joint shared staff between the House 

Budget Committee and the Senate Budget Committee. Is that not 

the original incarnation of the CBO? 

Mr. HALL. Yeah, I am not sure about what the original intent 

was, but certainly that characterization is right. That we are here 

only to assist the Budget Committees and the rest of the Congress. 

Mr. WOODALL. My reading of history tells me the Senate found 

it beneath them to share a staff with the House Budget Committee. 

BU00-A363290 with DISTILLER

27 

And so, once they insisted on having their own staff, we insisted 

on having our own staff, and you were left to advise us both there 

on the side. You talk about hiring people irrespective of political 

outlook, and I think that is very challenging to do. 

My experience with CBO directors is I tend to learn more about 

their politics after they are gone than while they are there. We see 

a lot in hindsight. But I look at—I am reading from a CBO cost 

estimate of the American Healthcare Act—and the top line says 

this: ‘‘CBO and JCT estimate that enacting the enacting the American Healthcare Act would reduce Federal deficits by $119 billion 

over the coming decade and increase the number of people who are 

uninsured by 23 million in 2026 relative to current law.’’ 

Mr. HALL. Yes. 

Mr. WOODALL. What you could have said is that we are going to 

increase healthcare freedom for 12 million people between now and 

2026 relative to current law. You could have said we are going to 

expand the choices that the American people have and repeal the 

mandates in their life. Every single sentence has a political flavor 

to it, you rightly describe your role as scorekeeper. 

But because words have meaning, every single line takes on a 

political connotation. How do we scrub to prevent that? And specifically, for example, did folks talk about describing the American 

Healthcare Act in healthcare freedom terms instead of people lose 

insurance because they decided it is not right for them and so they 

leave it on their own volition? 

Mr. HALL. Of course, I respectfully disagree that our language at 

all was political. And one of the things that we tried very, very 

hard to do was to be very factual about this—— 

Mr. WOODALL. Well, let me interrupt you, because my time is 

limited. Because that is critically important. The top line says, 

‘‘Americans lose something.’’ The fact is Americans have the right 

to choose something new. They lose nothing. They make new 

choices. 

And if you do not recognize that line as being political, then we 

have a much harder challenge. If you recognize that just by nature 

of words having meaning, they will be political. Someone will take 

those and use them politically. Then it may not have been your intent, but at least we recognize the outcome of that. 

Mr. HALL. Like I said, we do not use language like lose. We 

talked about how the number of people with coverage would change 

over time relative to the baseline. I think part of what happens is 

we have no control over how the press reads our work, and interprets it, and translates it. And I think sometimes some of the language that people use in describing it is not really our language 

and it gets attributed to us. 

We try very hard. This was a document written for members of 

Congress. We have lots of detail in there about where that change 

in coverage—— 

Mr. WOODALL. Well, yeah. Those are the winds of change blowing 

here, Director. But you make a very interesting observation. CBO 

was, in fact, created to advise Congress. 

And I would expect that you would probably get more attention 

from outside of Congress than you do from inside of Congress these 

days. And though we will not have time to do it in this hearing, 

BU00-A363290 with DISTILLER

28 

I look forward to having that conversation. I think Congress could 

benefit more from your work if it was less the object of a political 

conversation and more policy. 

Mr. HALL. Right. Well, let me just say one thing about that, that 

it was a conscious decision. When we put out these estimates, 

while the debate was going on, I got so many offers. We got so 

many offers to go appear on TV and talk about things. 

We deliberately chose to let our report speak for itself. That 

would be like interviewing the referee at halftime. Right? We made 

our estimate, we did our best to describe it, and then it was up to 

you all to deal with the politics and the decisions about it. And 

again that, to me, is very consistent with the idea that we are just 

providing advice. We are not trying to get attention at all. Except 

by you because we want to help you make good decisions. 

Chairman WOMACK. Mr. Moulton from Massachusetts. 

Mr. MOULTON. Thank you, Mr. Chairman. Thank you, Director, 

for being here. I appreciate your presence and your work. I am reminded of when I lost my dog, whom I loved very much, and people 

expressed their condolences. And I said, ‘‘Oh no, no. I just have the 

freedom from my dog.’’ And that is how I looked at it. Can you tell 

me what are some of the transparency initiatives that you have 

taken to help the public better understand your work? I mean, you 

have admitted that this is a place where you could do better to help 

Congress and the public understand your analysis. So, what are 

some of the things you are working on? 

Mr. HALL. Sure. Well, we always relied upon trying to write up 

our estimate as clearly as we possibly can with as much detail as 

we possibly can. And we have always counted on being able to 

come in and talk to members if they have questions and that sort 

of thing. 

We are hearing concern over transparency, and we are trying 

very hard to increase transparency. And we are doing it really in 

a number of ways, where there has been a lot of talk about the 

health insurance coverage model, where we are completely revising 

that. We are going to be making presentations about different aspects of that publicly, so we get feedback on it. 

And we are going to provide documentation and we are going to 

provide some computer code. That is a big lift. We have been planning on doing this since I came on board 3 years ago. We have been 

too busy doing healthcare estimates. We had hoped to be done literally a year ago. We have been too busy doing healthcare estimates and having to do that with the old model to take the time 

to sort of update things and try to be more transparent. That 

would help, I presume, a bit for people to understand where we get 

our healthcare estimates. 

Although again, we have also made some presentations. We are 

trying to document our processes. We are increasing that. We are 

trying to document our models more. We are doing things like our 

long-term budget model. We are redoing parts of that and we are 

going to make that publicly available—— 

Mr. MOULTON. Director, what kind of formal review does CBO’s 

work undergo? Do you consult outside experts? How do you decide 

whom to consult? What are some of the ways that you check your 

work? 

BU00-A363290 with DISTILLER

29 

Mr. HALL. Well, part of what we do is we train people very carefully that they need to go out and get information from various different sources with different points of view, and people who have 

some understanding not only of how the legislation would work but 

how it would be implemented. So, we do that very carefully with 

training. And then once we get that down, we try very carefully to 

rely on all the data we found and have a general opinion on how 

things are going to work. 

We have a very careful review process. Everything we produce is 

reviewed at several different levels. For big things, we have a huge 

number of people involved. For the healthcare estimates, we probably had two dozen people involved. So, a lot of it is getting a lot 

of viewpoints inside CBO but also trying to get a variety of viewpoints outside CBO. 

Mr. MOULTON. Are there analytical tools that you lack that you 

would like to have? Are there places where you feel like you could 

improve the robustness of your analysis if you had access to more 

materials or more resources? 

Mr. HALL. Certainly, with the analytical tools, the answer is yes. 

Always. Because we have so many models, we are always trying to 

update them. They always need to be adapted. To give you some 

idea of the range of work that we have got, we did a count of our 

models. And not just the models that exist, but the models that we 

recurring use over, and over, and over again. We got up to about 

215 different models, and we are constantly updating those things. 

So, this gives you an idea of the challenge that we have, right? 

In sort of keeping these things up to date. We have a lot of people 

doing that. And it is also a challenge for the transparency part because it takes time to make these things publicly available. 

Mr. MOULTON. Director, my final question is about a relatively 

new challenge you face, which is all this outside criticism of CBO. 

As anyone who has led a team knows, morale is important, and 

morale affects the quality of work. Has your morale, the morale of 

your team, suffered as a result of these attacks? And how do you 

see that affecting your work going forward? 

Mr. HALL. I think our morale has held up pretty well because, 

I think we have people who are professionals. And they expect that 

people criticizing the analysis or disagreeing with the analysis, that 

is fair game. We do have some trouble when people call us biased 

or something like that, which is going just too far because we are 

actually trying very, very hard to do our work carefully. 

I think for the most part people understand. And we have had 

quite a few people come to our defense. People who actually know 

CBO’s work and use CBO’s carefully have really come to our defense in some of these criticisms. 

Mr. MOULTON. Thank you. 

Mr. HALL. Some have been very helpful. 

Mr. MOULTON. Thank you, Mr. Chairman. 

Chairman WOMACK. The gentleman from Alabama, Mr. Gary 

Palmer. 

Mr. PALMER. Thank you, Mr. Chairman. I want to get away from 

the partisan jabs and get to issues that I think all of us ought to 

take very seriously, and one of them is your report: 2017 LongTerm Budget Outlook. And you pointed out that—this was about, 

BU00-A363290 with DISTILLER

30 

obviously, a year ago—that the GDP was currently about 77 percent. Is that where we are? 

Mr. HALL. Yes. 

Mr. PALMER. And you also pointed out that in 30 years that the 

GDP will be 150 percent. 

Mr. HALL. Yes. 

Mr. PALMER. And for anybody who is still awake at this point 

watching this, I just want to point out that that means our debt 

will be approximately half again bigger than our entire economy. 

Is that correct? 

Mr. HALL. That is right. 

Mr. PALMER. Is that a serious problem? 

Mr. HALL. It is a serious problem. It is a serious issue that it is 

not getting better. 

Mr. PALMER. Would you suggest that this Committee might 

ought to be taking a very serious look at how we scale that back 

instead of talking about what we did last year or year before last? 

Mr. HALL. Well, I want to be careful about making recommendations to the Committee. But we prepared—— 

Mr. PALMER. Well, you put out the report. 

Mr. HALL.—to support that work. 

Mr. PALMER. You put out the report and it is a serious report. 

And I assume you are planning to release another long-term budget outlook in a month or two? Is that—would that be fair? 

Mr. HALL. That is fair. 

Mr. PALMER. Okay. You are obviously looking at the numbers 

now and I do not know if you can speak to that. But roughly what 

would we need to do in the next budget to get us on track to, say, 

get us back to the historic 50-year average for debt-to-GDP, which 

I think is about 40 percent? Is that correct? 

Mr. HALL. That is right. We actually have some of those scenarios in our budget outlook that will be coming up. We actually 

do have some scenarios about sort of what it would take if you 

start now, and that sort of thing. I do not know those off the top 

of my head, but we—— 

Mr. PALMER. About $680 to $700 billion, I think, is it not? 

Mr. HALL. Okay. Okay, you read the last one. That sounds right. 

Mr. PALMER. Yeah. So, my point, Mr. Chairman, is that since you 

are now the Chairman of the Budget Committee, we have some serious work to do if we want to get our fiscal house in order. And 

it is going to require that we make some tough decisions in regard 

to budget, particularly mandatory spending. And that would include healthcare. Also, I want to ask you, in your last report that 

we were looking at, I think you were projecting economic growth 

at 1.9 percent? Is that correct? 

Mr. HALL. Well, yeah, the long-term economic growth would settle in at 1.9—— 

Mr. PALMER. What is long-term, 10 years? Or are you saying 

averaging 1.9 over 10? 

Mr. HALL. That is right. Before 10 years, 7 or 8 years, and then 

going forward it would remain at about that level. 

Mr. PALMER. So, are you optimistic or pessimistic that that number might improve? 

BU00-A363290 with DISTILLER

31 

Mr. HALL. Well, I think part of what I would like to do is point 

out the sort of things that would be needed for that to improve. 

Mr. PALMER. What would that be? 

Mr. HALL. Well, it would be supply side things. It would be the 

capability of the economy to increase production past its sort of potential. So, the biggest single problem we have is a slowly growing 

labor supply because of the aging population. 

Mr. PALMER. Well, I was going to try to get to that. I appreciate 

you preemptively bringing that up because I think that is, again, 

part of the work that we have got to do in the Budget Committee 

in regard to making sure that the able-bodied are in the workforce. 

And that we then take a look at what we might need to do in regard to bringing in other people to work. 

I have only got a little over 1 minute left, and I want to change 

directions just a little bit here and ask you: I appreciate the work 

you are doing towards trying to enhance a culture of transparency 

at the CBO. In addition to those efforts that you have listed there, 

has there been any discussion of including some sensitivity analysis with estimates so that members can see how small changes 

and assumptions could drastically impact the estimate? 

Mr. HALL. Yeah, I am a fan of that, and we do that certainly in 

the reports where we have more time, like the outlook. That can 

be really hard to do in cost estimates where there is a real time 

constraint. 

And then sometimes there are these so called ‘‘unknown unknowns’’ where there is some statistical uncertainty. But also, 

there is some just uncertainty. We just do not know what it is. 

Mr. PALMER. Is this because of limited bandwidth or insufficient 

tools? I mean, limited bandwidth for the staff? I mean, what do you 

need? Because if we are going to start talking about how we resolve 

the longer-term issues, 30 years down the road, these minor 

changes that could help make big differences will matter a lot to 

this Committee. 

Mr. HALL. Yeah, sure. To be honest, that is one of the reasons 

why we have a fair number of technical economists who are there 

to sort of help us work through some of this methodology and develop some ways to be more transparent on things like the uncertainty. 

Mr. PALMER. I thank you, Mr. Chairman, and I yield back. 

Chairman WOMACK. Thank you, Mr. Palmer. Ms. DelBene from 

Washington. 

Ms. DELBENE. Thank you, Mr. Chair, and thank you, Director 

Hall, for being here with us and for your time. Before coming to 

Congress, I was a businesswoman and I also ran the Washington 

State Department of Revenue, and I know that an organization 

cannot move forward if they only have limited visibility. A business 

would not stay in business if it only planned 30 or 60 days at a 

time. 

Yet here we are, 4 months into the fiscal year and have passed 

four continuing resolutions. Would you agree that this very shortterm approach to budgeting undermines the budget process? And 

introduces unnecessary uncertainty into government programs and 

agencies? 

BU00-A363290 with DISTILLER

32 

Mr. HALL. Well, I appreciate the question, but I want to try to 

back off on offering advice to the Budget Committee beyond sort of 

the technical work that we do. It is part of how we establish our 

objectivity. 

Ms. DELBENE. Well, does uncertainty make it harder for you to 

provide long-term budget projections? 

Mr. HALL. Sure. I mean, it poses challenges I spent some time 

as the head of a Federal agency, the Bureau of Labor Statistics, 

and the budget challenges there from not knowing the budget was 

not trivial. 

Ms. DELBENE. And what about your own ability to plan for this 

year and hire staff? 

Mr. HALL. That is an issue for us. We had some extra expenses 

last year, and right now our continuing resolution is not what it 

needs to be. And if we were to continue with this continuing resolution for the rest of the year, we would actually have to cut back 

on staff, and in training, and some things like that, and it would 

make it very difficult for us. 

Ms. DELBENE. Thank you. Also, my district is a district on the 

northern border in Washington State. It is a very politically diverse 

district. Yet everyone seems to agree that we need to pass comprehensive immigration reform. We have farmers, the business 

community, the faith-based community, across the law enforcement, across the board want to see comprehensive immigration reform. And in your prepared testimony, you mentioned that the 

CBO will publish new reports in 2018 describing your processes for 

producing economic forecast for major legislation affecting health 

insurance. I wonder, do you plan to do the same for any major legalization affecting immigration? 

Mr. HALL. If we have specific proposals, we will do our thing and 

estimate the likely impact. 

Ms. DELBENE. So, in 2013 CBO released a report on the economic impact of comprehensive immigration reform. That report 

said that ‘‘the cost estimate shows that changes in direct spending 

and revenues under the legislation would decrease the Federal 

budget deficits by $197 billion over the 2014 to 2023 period, and 

by roughly $700 billion over the 2024 to 2033 period.’’ 

Folks are talking about debt and deficit, and so, as there are several proposals for immigration reform in both houses of Congress 

at the moment, are there any key takeaways from your 2013 analysis and modeling that will be helpful for members to know as we 

work to craft a new immigration bill? 

Mr. HALL. The main takeaway is fine. I do not recall too many 

specifics at this point. But, obviously, immigration reform really depends upon a lot of the specifics. That is one of the things that we 

are very, very careful about, is that sometimes the details matter 

when you do not think they matter. That makes a big difference. 

And we rely on research literature, what the most current research 

literature is that talks about the effect of immigration on the labor 

force and some things like that. 

Ms. DELBENE. Well clearly, there is a lot of work that went in 

from the CBO in the past on this issue, and it has shown that it 

would decrease the budget deficits. And obviously is an important 

part of the conversation when we are looking at a tax bill that just 

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passed that would increase our debt and deficit by over $1.5 trillion. So, I think this is an important conversation. 

I want to emphasize that the Congressional Budget Office is a 

nonpartisan office and it is tasked with objectively looking at the 

facts. And so, I want to thank you for your work. And I yield back. 

Chairman WOMACK. Thank you, Ms. DelBene. Mr. Renacci from 

Ohio, the witness is yours. 

Mr. RENACCI. Thank you, Mr. Chairman, and I want to congratulate you on your selection. I look forward to working with you in 

2018. I appreciate this hearing. I hope we can also go back and 

look at the or Budget Committee reform that we did a few years 

back and look at some of those issues as well over the coming year. 

I want to thank you, Director Hall, for being here. I appreciate 

you coming to my office, I know a few months ago, when talking 

about how you can be more transparent. 

We talked about my career. I mean, I spent almost three decades 

in the business world. I had 3,000 employees at one point in time. 

I had to wake up every morning making decisions on how I could 

make sure that their livelihoods were maintained. And I relied on 

people to help me do that, just like we rely on your organization. 

And I think that is important. 

But what you and I talked about in our meeting was the biggest 

concern I have is that in the business world you make a decision, 

and then you look back and see where you failed or where you did 

not fail. And my concern, as it has always been with CBO, is that 

you do a lot of good work and you put out a plan, but then we 

never go back and look at where we made a mistake and how we 

can correct it. 

Because it is easy to say, ‘‘This is what is going to happen.’’ And 

I realize it is difficult for you because, as you make those decisions, 

you are moving on to another issue and another issue. But at the 

same time, I think it would be best for members, especially in the 

Budget Committee, to realize that some of your decisions are right, 

some of your decisions are wrong, where you made your mistakes 

and where you made your failures, where you were right, and so 

that we can learn better. 

So, I am hoping that at some point in time we can talk a little 

bit about how that transparency can be better—can be better informed for us. Because I still do not know how you do that and— 

every time we do have mistakes—can you kind of talk about how 

you are going to change that transparency? 

Mr. HALL. Sure. 

Mr. RENACCI. Why do we not talk a little bit about that? 

Mr. HALL. One of the things that we have actually done this past 

year, we actually produced a report that looked at how we have estimated outlays, how accurate we have been after outlays. 

So, for example, between 1984 and now, our estimates of outlays 

were off by about 1.7 percent on average within the first budget 

year. And over 6 years, we are off by about 3 percentage points. 

So, this gives you an idea when we make an estimate, on average, 

that is how far we are off, up or down. It is hard to say whether 

that is good or bad. We would like it to be zero. But that is a pretty 

good comprehensive look. 

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34 

It gets hard when you look at individual pieces of legislation because they wind up being thrown into a bigger budget category and 

you cannot always follow them. But we are doing that sort of thing. 

We did a pretty careful report on how we did on the budget estimates on the ACA. So, that is something I actually look forward 

to because there has been a lot of focus on that. So, we went back 

and did our, I think nice, objective look about how we did and how 

others did. 

Mr. RENACCI. Sure. The problem is 1 or 2 percent on a $3.5 trillion budget is a big number in many cases. So, I look at those dollars as well. I know that the Social Security Trustee Report and 

the CBO differs on Social Security Trust Fund and the shortfall. 

Can you tell me why there is differences there and how you are 

reconciling that out? 

Because as a member of the Ways and Means Committee, I am 

very concerned about Social Security. I am very concerned about 

the shortfalls and the outlays. But we also have two reports that 

differ. 

Mr. HALL. Well, actually we had a hearing a little while back 

that was really helpful for us to understand how Social Security 

comes up with its numbers and we talked to them about how came 

up with our numbers. And I am hoping that after we produce the 

next long-run budget outlook that we go back to compare ourselves 

a little bit to the Social Security folks. The biggest difference starts 

with their economic assumptions, which are sort of basic. 

We do have some differences there. Some differences in labor 

force. But then, there are some other things like mortality rates 

and that sort of thing where we have some differences. But we did 

write up a report that has some of the details of where we differ, 

and I would like to update that. 

Mr. RENACCI. So, you would admit though—because I know I 

talked to you a little bit about your predecessor. I had the CARERS 

Act out there, which I had outsiders do kind of a preparation of the 

cost differences and CBO scores are different than my outsider 

scored it. 

And when I met with CBO, I really did this to get a learning 

model for myself. And it was simple math. CBO was saying, ‘‘Well, 

this is what we believe,’’ and my outsiders were saying, ‘‘This is 

what I believe.’’ You admit that we could have those differences on 

anything? On any issue, right? So that is why the transparency is 

so important. 

Mr. HALL. Sure. 

Mr. RENACCI. I appreciate it. Again, I yield back and thank you. 

Chairman WOMACK. Thank you, Mr. Renacci. Next, to Florida, 

Ms. Wasserman Schultz. 

Ms. WASSERMAN SCHULTZ. Thank you, Mr. Chairman, and congratulations on your ascendency. It is good to see a fellow appropriator leading this Committee. And Director Hall, it is good to be 

with you. 

For a little historical context for some of my colleagues, you may 

know that I was the chair and ranking member of the Legislative 

Branch Appropriations SubCommittee for 10 years. 

In that role, I was responsible in part for the oversight of CBO’s 

budget. And we spent a lot of time working with your predecessors 

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to make sure that CBO had exactly what you said you needed, in 

terms of expertise, in terms of the staffing levels, so that you could 

really do an objective and expert analysis of all the workload that 

you have. And that is something that Congress has endeavored to 

continue to make sure you have because if you hamstrung by not 

having enough staff, then there is a concern. 

And I have had CBO analyses I have agreed with, some that I 

disagreed with; in fact, I remember when you came before us for 

the first time. And you were appointed by Speaker Ryan, I believe, 

and you worked in the George W. Bush administration, and you 

subscribed to the idea of the practice of dynamic scoring, which is 

an analytic process with which I disagree. Yet, I do not malign you 

and your staff’s analyses, even when I disagree with them. 

Facts can be annoying. Especially when they are presented to 

you and they do not line up with your beliefs. But we are in a 

world of alternative facts. And so, to me, it is absolutely essential 

that we have CBO’s objective analysis in the majority and the minority so that we can at least have some objective facts. 

With that predicate, I want to just ask you. Under your leadership, do you feel like—given who you worked for previously and 

who you were appointed by—that CBO or that members of Congress should read bias into your analysis that are generated by unduly favorable projections, or unfavorable projections, of the likely 

effects of Republican policy proposals? 

Mr. HALL. I have about 25 years of managing policy, policy analysis, and policy research. I have worked with a lot of very great 

technical people who are professional and do their work objectively. 

CBO is the top of that. They are just outstanding people. They are 

very, very professional. We have always done a really good job of 

hiring very capable, professional people. And the culture there is 

very strong to try to do objective work and get all sort of viewpoints 

and try very hard to be objective about things. 

We have value because we are credible. And that is why, I will 

tell you, I have been particularly bothered about the efforts to sort 

of attack our credibility because we spend so much time trying to 

be objective and impartial and do our work middle of the road and 

always have. I think, again, with the people who are really familiar 

with us, I think, we have a very strong reputation for doing nonpartisan work. 

Ms. WASSERMAN SCHULTZ. Thank you. And please send our best 

wishes and support and thanks to the folks that work for CBO. You 

work excruciatingly long hours. I have had many conversations 

with two or three directors before you, and your work is really second to none, whether I agree with it or not. And I will again stress 

that you are currently using a practice of dynamic scoring with 

which I and most Democrats do not agree. And yet we still have 

faith in your analysis. 

Before I run out of time, I just want to ask a question that is 

more granular. In the 2014 long-term budget outlook CBO projected that with the continuation of current policy, the life expectancy gap between those with high incomes and those with low incomes will continue to grow. Director Hall, is there any reason for 

us to believe that this projection was erroneous and had it been improved, CBO organizational and operational structure would have 

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resulted in a more, which is the subject of today’s hearing, would 

have resulted in a more accurate projection? 

Mr. HALL. Well, that gap in the life expectancy is something we 

have certainly seen in the literature and in the data. And we are 

actively researching that a bit to see that we get it right in our 

forecast because that is an important part of our long-term forecast. 

Ms. WASSERMAN SCHULTZ. I yield back the balance of my time. 

Chairman WOMACK. Thank you. Mr. Arrington from Texas. 

Mr. ARRINGTON. Thank you, Mr. Chairman. And I look forward 

to serving under your leadership and congratulations on your appointment. And Dr. Hall, thank you for your service to this Committee and to our country. 

The topic, as I understood it, was organizational and operational 

in nature. And so, I am going to be a little boring but in my series 

of operational questions. But just because they may be boring does 

not mean they are not extremely important. 

So, let me start with Peter Drucker sort of philosophical question. And let me ask you if you subscribe to this: if you cannot 

measure it you cannot manage it. Do you subscribe to that? 

Mr. HALL. Yes, actually. Developing metrics about how we are 

doing it is very important. 

Mr. ARRINGTON. Well, how do you measure success in your organization for the work that you do and for the people you manager? 

Just succinctly, if you could, please. 

Mr. HALL. Sure. A part of it is judging the quality of the end 

product. Everything that comes out of CBO has my signature on 

it. We have a very strong review process. We want to be comfortable with it. And we now do some things and we are going to 

try to do more things to assess how we have done. I mentioned the 

report looking about we have done in projecting outlays we have 

done on revenues. We do one on economic forecasts—— 

Mr. ARRINGTON. Would you say quality—and, pardon me, for interrupting but just to be more specific. When you are talking about 

quality do you mean accuracy, impartiality? Would those two be at 

the top of the list of quality? 

Mr. HALL. Yes. 

Mr. ARRINGTON. How do you measure accuracy? Do you go back 

and look at what you projected? What you estimated? And then 

within a margin of error that is reasonable how far you hit the target or how far away from the target you were? 

Mr. HALL. Yeah, that is right, we do. And one of the things that 

we have done privately for years, which I think there has been an 

increased interest in; we may start to make public. Once a year we 

do what is called an ‘‘analysis of actuals’’ where we get down into 

all the small budget categories and see how did we predict those 

numbers this past year, and what was the actual number? And we 

have an analyst go through that, and we have always done this, 

and talk about where they were off or they were not off. And that 

is part of how we judge their performance. 

Mr. ARRINGTON. I commend you for that exercise. I am comforted 

to know you do that. So, do you have like a success rate on your 

timeliness? Success rate on your accuracy? Success rate on impartiality or something, whatever the metrics are, do you have that? 

BU00-A363290 with DISTILLER

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And could I look at that to see how often you are hitting the target 

so we can work together to make improvements? If you cannot 

measure it, you cannot improve it, right. 

Mr. HALL. Yeah, I can see what we have. But one of the things 

that we are really hampered by is pieces of proposed legislation are 

such a small part of budget categories. That once we make an estimate quite often we have no idea how it actually worked out, because the data is just not there to do that. So, one of the things 

that we try to do is try to do more of that individual analysis. But 

a lot of it is we just cannot do it. 

Mr. ARRINGTON. Thank you for all that. Let me jump to culture. 

I am big on culture. I think it has a tremendous impact on your 

success and outcomes, desired outcomes. You said you had a strong 

culture. Where is your weakness? Where culturally can you improve? And just be very transparent about that would be helpful 

to us. 

Mr. HALL. I think one of the most complicated things we do is 

this sort of trade off when we are under really severe time pressure, we have to decide what is a good high quality analysis and 

try to hold to that. And so, sometimes there is this real tradeoff between feeling like we got a high enough quality, we are comfortable 

enough with an estimate. 

And, frankly, being leaned on sometimes pretty hard by Committee staff, ‘‘Hurry, hurry, hurry.’’ And now we are throwing in 

this transparency part and that is another third area. And that is 

a really tough trio of things to manage. 

Mr. ARRINGTON. Let me just run through this list. Thank you for 

answering the question. Are you all unionized? Okay. No union 

members. And what are you doing now from a sort of product 

standpoint, or line of business, that you were not doing in your 

stated mission in 1974? That is what are you doing additionally to 

what you have been authorized to do in terms of products? 

Mr. HALL. Well, the biggest single thing is the technical assistance we provide. We spend more time offering technical assistance 

talking with Committee staff, giving them little estimates of what 

proposed legislation. We spend way more time on that probably 

than we do on our formal cost estimates. And I think that is a difficult thing, right? Because there is no output for that except, I 

hope, that Committees find it valuable because they spend a lot of 

time asking us these technical questions. That is a real difference 

from the old days. And a lot of that is because legislation gets to 

be so complicated and complex. 

Mr. ARRINGTON. Thank you, Dr. Hall. My time has expired. I will 

follow up with the rest of my questions and, Mr. Chairman, I yield 

back. 

Mr. HALL. Okay, great. Thank you. 

Chairman WOMACK. Let’s go now to Ms. Jayapal from Washington. 

Ms. JAYAPAL. Thank you, Mr. Chairman. And thank you, Dr. 

Hall for being with us. I want to just echo how important we know 

the Congressional Budget Office is, and thank you and your staff. 

I do share the concerns of some of my colleagues that we are operating in an increasingly partisan environment where actual instituBU00-A363290 with DISTILLER

38 

tions are being undermined and you mentioned some of the accusations of bias. 

And I think, you know, I found several statements OMB Director 

Mick Mulvaney who questioned the analysis of a version of the 

ACA Repeal Bill last June. And said if the same person is doing 

the score of undoing Obamacare who did the scoring of Obamacare 

in the first place, my guess is that there is probably some sort of 

bias in favor of a government mandate. 

And then, last year the White House tweeted that the CBO continues to prove its model simply cannot be trusted to accurately 

predict the outcomes of important healthcare legislation. I want to 

give you a chance to respond to those charges once again. 

But also just say that I think it is important to recognize, with 

all due respect to my friend from Georgia who is commenting on 

Ms. Lee’s questioning, that there is a difference between what the 

Congressional Budget Office does and how members choose to use 

the results of that. And we all understand that we have different 

perspectives, different political philosophies. 

We may use the numbers that you come up with in different 

ways. We may believe different conclusions can be drawn from 

those numbers. But your job, as I understand it, is to provide us 

with the numbers of any proposed legislation. 

So, I want to give you just a quick minute to respond again to 

the charges of bias against the agency. And while you do that, 

please tell us if your staff are career or appointed, and explain to 

the public that might be watching, what that means to be career 

staff. 

Mr. HALL. Well, first of all we hire people at CBO purely on their 

technical abilities. We do not ask anybody about their politics or 

their views in anything. In fact, we try very hard to avoid that. 

And part of our process is, you know, I have worked for many, 

many years in the executive branch where I helped hire lots of people who were very technical, unbiased, people who were able to 

work objectively. 

We go even a little further, and it is part of the culture we will 

actually go back and look at some of the places where some of our 

employees worked. And if they had been in political jobs relatively 

lately we do not hire them. We check their social media. If they 

post a lot of things that would be inappropriate for someone at 

CBO to post, then it puts doubt as to whether they can work objectively. So, that part is really important to us. 

And then, you know, we do not just throw analysts out there by 

themselves. We have a review process that involves lots of people. 

And, you know, ultimately the director is responsible for all the 

work at CBO. 

And I, you know, I think the CBO has processes in place and we 

try very hard to make sure that we are objective and it works like 

that. And, frankly, if there were signs of someone not being objective in their work, that would be a problem. That would be against 

CBO policy. And we are like congressional offices. People work at 

the pleasure of the director. 

Ms. JAYAPAL. Thank you. I appreciate that. Let me talk about 

the importance of the CBO score. My colleague, Mr. Higgins, and 

I introduced a bill to say that for major legislation we should have 

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39 

a CBO score before it goes to the floor. Tell us what Members of 

Congress miss when we do not have a CBO score in front of us as 

we are evaluating a major piece of legislation like healthcare or 

taxes. 

Mr. HALL. Well, I think one of the most important and underrated things that we do is we describe the legislation very carefully 

and in detail about what exactly it does. And if you have ever 

looked at that actual text and then read a CBO, well, you can tell 

there is a lot of work. They just describe exactly what it does and 

what it involves and what is impacted. I think that is a real help 

right off the bat in addition, of course, to, then, us going further 

and trying to look at the effects on the budget. 

Ms. JAYAPAL. Thank you. And let me just end by asking if there 

is anything you want to say on the recent tax bill and how you 

built all the wide ranging impacts into your baseline. You only 

have about 30 seconds left. 

Mr. HALL. Sure. Well, the estimate of the tax bill itself was done 

by the Joint Committee in Taxation. We are required to take their 

estimate. But now, we are going to work it into our own economic 

and budget forecast; we have been doing that. We normally would 

close our economic forecast in early December. It is still open. 

I think we are going to close it by Friday, hopefully, and it will 

include the full economic impact of the tax bill. And then on top 

of that we are now going to overlay the budgetary impact. So, it 

will be fully scored, in a sense, in our baseline. 

Ms. JAYAPAL. Thank you so much, Director, and I yield back. 

Chairman WOMACK. Thank you. Next, we go to the former distinguished chair of this wonderful Committee, Gentlelady from Tennessee, Ms. Black. 

Ms. BLACK. Well, I congratulate my friend, my colleague, and my 

classmate on your new role as the budget chair, and I wish you the 

best of luck. And I will certainly be a team player with you. I also 

want to thank you, Mr. Hall, and all of your members of your staff 

for the hard work they do. I know as the budget chair and also 

being on the Ways and Means Committee the many, many hours 

that you all spend and you have a very dedicated staff. 

However, I think it is good and healthy for us to have these hearings. And I do not want to have this hearing to go away with the 

title in the newspapers saying that we are picking on or totally disagreeing with the Congressional Budget Office. 

But I think it is healthy for us to have discussion. And we are 

not talking about whether we agree or disagree we are talking 

about getting it right. I mean, that is really what we want to do. 

Because, honestly, we have to set policies and those policies that 

we think are good and we get a score back that we do not necessarily think is an accurate score is difficult for us. 

So, when we look at some of those scores, you know, they are off 

a little bit. I know the economic forecasts of the CBO was growth 

somewhere between 1.6 and 1.9 and the growth this year was 2.3. 

And we had two-quarters of 3 percent or over. So, we know that 

there are going to be some differences there. 

But where I want to go, and it concerns me the most and I do 

not really know that I understand exactly how you get these assumptions. The economic models are numbers so they are a little 

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easier to do. But when you get into behavioral assumptions is 

where I have the question, because I have seen on more than one 

occasion an estimate come out from CBO where I do not agree with 

the assumptions that they are making on the behavioral side. 

So, for instance, on that was one of the bills that I had about 

making sure that our dollars under Title 10 would, first of all, go 

to those organizations that do not provide abortions. And there was 

an assumption that if we did that then, perhaps, those organizations that do provide abortions would close down and then we 

would have X number more pregnancies. And those pregnancies 

would result with more children being on Medicaid. 

Well, I have a real problem with the assumption that if one provider closes that women are not intelligent enough to go to another 

provider to get the services of birth control. And, in addition to 

that, that the children that would be born as a result of those additional pregnancies would necessarily all go on Medicaid. 

So the number was so high on that of what the costs would be 

that the policy then is difficult because we have to pay for it. And 

that is where I really have a problem is how we get to these assumptions that are behavioral assumptions. So, if you can talk just 

briefly about that I would really appreciate it. 

Mr. HALL. Sure. We try very hard to see what sort of economic 

literature there is, what sort of literature there is on how these 

things are working, what is likely to happen, and what sort of data 

is available. On things like what you are describing it can be really 

hard to make an estimate. But we do as thorough a job as we can, 

you know, when we are looking at the healthcare providers, you 

know, how many are in regions where they are the only provider, 

how many are in regions where they are not. 

One of the things I think that would be always helpful, especially 

if it is something you do not agree with, is we love the opportunity 

to come in and tell you how we got our numbers and how it happened. And, to be honest, if you feel like we are missing something, 

if there is some research literature that we did not see, we will 

take a look at it. 

Ms. BLACK. So, there I thank you for that. And I appreciate that. 

And I hope that that message gets out to all of the colleagues here 

in Congress so that we can have more of that dialogue. And that 

gets to my second point is about transparency. I think that we have 

to look at a way that the Members of Congress can get more transparency from the CBO to make sure that we are looking at what 

you are deciding and what we think is not exactly accurate and 

have that dialogue. 

So, I would say one thing I continue to hear from my colleagues, 

and I have even heard it from my colleagues across the aisle, that 

they would like to see how you got to where you got to. And sometimes you can just say once you see the information, ‘‘Oh okay, I 

agree with that more.’’ 

But we have got to have an environment here where when we 

are making decisions and policies that affect the people, not only 

in our own States and our own districts but across the entire country, that we have full transparency. And that probably is a dialogue that we need to have more conversation on, Mr. Chairman. 

BU00-A363290 with DISTILLER

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And I know that as you move forward on additional hearings that 

that may be also something that is talked about a little bit more. 

But many times you can accept what it is that someone is saying 

or have that argument if we at least have the transparency. And 

with that I am right on time and I yield back, Mr. Chairman 

Chairman WOMACK. Thank you, Ms. Black. To California, Mr. 

Carbajal. 

Mr. CARBAJAL. Thank you, Mr. Chair, and thank you, ranking 

member. Thank you, Dr. Hall for your testimony today. And thank 

you for the objective nonpartisan analysis that you provide our 

Committee. The recent tax bill made substantial changes to the tax 

code that will have wide-ranging impacts on the budget and the 

economy. Can you walk us through how you build that into your 

baseline? 

Mr. HALL. Well, sure. It starts, of course, with the economic forecast. I will walk through all of the details of the bill. You know, 

of course, JCT did the estimate on the legislation. But we are 

tasked with putting our own estimate into our baseline. We have 

spent weeks and weeks already going through the tax bill and 

working through how we think it is going to affect the economic 

forecast. And preparing, then, for the budget side of things once we 

get an economic forecast then we have the budget forecast on it. 

There are just so many steps on it. But we have a bunch of really 

dedicated people. We have a really good tax group in there. And 

we are going to try to produce something that is understandable 

and as accurate as possible. 

Mr. CARBAJAL. Do you ever have third party outside people that 

look over your analysis? 

Mr. HALL. Absolutely. We have a very good panel of economic advisors and they meet twice a year. They actually sort of approve 

our economic forecast for us. We actually make a presentation to 

them; they will make comments. And they are a diverse group. And 

whether they realize it or not when they volunteer to be on the 

panel, they give us their phone numbers. And we call them up and 

we will have discussions with them on aspects of the analysis or 

the forecast that we are unsure of. 

Mr. CARBAJAL. And how do you go about selecting those advisors? 

Mr. HALL. Well, we have got if you sort of look at our panel, it 

is up on our website. We have a panel of very impressive people 

from different schools. And we actually make an effort of people 

who have sort of a diverse background with respect, possibly, to 

politics. We try to avoid that part of it. But we try to get people 

who have different points of view certainly on some of the things 

that we have to deal with. 

Mr. CARBAJAL. Have you ever gotten any criticism or objection 

from anybody on this Committee about any of those advisors? 

Mr. HALL. I am not sure about this Committee. Not during my 

time, I do not know. We have been pretty transparent about who 

they are and that sort of thing. But I have not heard anything. 

Mr. CARBAJAL. Thank you. What is the CBO’s best estimate of 

the impact of the recent tax bill on the deficit? I understand that 

it is $1.5 trillion. 

BU00-A363290 with DISTILLER

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Mr. HALL. Well, that was JCT’s estimate. We are in the process 

right now of working through our estimate. It will be a little while 

before it comes out in our budget outlook, but it will be there. 

Mr. CARBAJAL. So, you do not have an estimate today. 

Mr. HALL. No, I do not. 

Mr. CARBAJAL. Okay. Do you know if the estimate that JCT has 

put out there includes the compound interest over the next 10 

years? 

Mr. HALL. I think we did a version of that that included the interest. 

Mr. CARBAJAL. And what is that version number that you came 

up with? 

Mr. HALL. I would have to get back with you. It added a little 

bit more to it from the deficit. But I do not remember right offhand. I should know, but I—— 

Mr. CARBAJAL. I believe the number was $2.3 trillion, but I appreciate you getting me that information later. 

Mr. HALL. Okay, I will be happy to follow up. 

Mr. CARBAJAL. Thank you very much. I yield my time back my 

time. 

Chairman WOMACK. Thank you, Mr. Carbajal. Let’s go to Minnesota, Mr. Lewis. 

Mr. LEWIS. Thank you, Mr. Chairman, and congratulations, looking forward to working with you. And, Director Hall, thank you so 

much for being here. I am little perplexed at the other side of the 

aisle’s hammering you over dynamic scoring. It is only a model 

about a century old when Alfred Marshall came up with supply and 

demand curves. I do not think anybody doubts the elasticity of 

work savings and investment. We saw that reaction in the ‘20s 

when we had tax policy changes, in the ‘60s, in the ‘80s. I think 

we are seeing it now. 

But if you were to ask anyone on this panel if they wanted to 

reduce smoking, which we all want to do, for our young people. 

What is the first thing they would do? They would raise the cigarette tax. Well, but prices do not have any effect on people’s behavior. Well, of course they do. I understand you have got a very tough 

job. If I could predict interest rates or the Super Bowl winner I 

would be in a different line of work. But the bottom line is there 

are things that we can predict with historical accuracy. 

I understand you have a very tough job as I say monetary policy 

is something that you have no control over and would have to be 

a problem for some of your models. But let’s get back to the baseline you issued last year of 1.9 percent growth if we made. The Atlanta fed now today came out with their first quarter estimate of 

4.2 percent GDP growth. 

You mentioned in your analysis and today that you had concerns 

over the labor supply. But as we all know, the GDP, economic 

growth made up of two principal parts, productivity, and people. 

Either one goes up you are going to get more economic growth. Did 

you take into account, from a historical perspective, the increases 

of productivity when there is more capital invested, when there is 

more incentive to invest capital? You were sticking with 1.9 percent 

or at least a year ago—we will see this year—but 1.9 percent 

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growth when we are clearly seeing faster growth, at least right 

now. 

Mr. HALL. Yeah, well like you say the productivity has been really slow. But we do actually have in our long-term forecast productivity getting back to its historical levels; something like 1.3, 1.4 

percent. So, actually that is in part of what is baked into that longterm growth. It is why really is that labor supply part that is big 

distraction. 

Mr. LEWIS. Then how would you account for the increases in 

GDP growth in the last few quarters? 

Mr. HALL. Well, part of it in the last few quarters has been a 

number of things. Part of it has probably been anticipation of the 

tax bill. Part of it is probably demand side because we are getting 

stimulus. And we still think there has been some slack in the economy so there is room for sort of demand stimulus. And that is 

clearly a bit of what is going on. 

Mr. LEWIS. You know that is really an interesting point you 

make, and I am glad you did. And that is really why some of us 

have concerns about this. We can go through the debate over 

Keynesian analysis versus supply side or classical economics all 

day long. But we have had that experience. We had it with the 

stimulus package in the previous administration and we did not 

get growth. 

And I think some of us would like to see a little bit more supply 

side analysis in there in restoring productivity and growth. To 

quote a famous economist, Jean-Baptiste Say, that ‘‘Supply will 

create its own demand’’ and we do not need to go down this 

Keynesian road time and time again. And is that not a value judgment that the CBO makes that we are going to use demand side 

analysis? 

Mr. HALL. Not really because I think certain aspects of any legislation is demand stimulus and other aspects affect the supply side. 

So, we do not assume at all that supply side, that labor supply and 

productivity, is just fixed. That, in fact, there can be some policy 

things that affect that. 

Mr. LEWIS. Do you think you have a demand side bias? 

Mr. HALL. No, I think one of our challenges is we have to work 

through the demand side in the near term years and then slip into 

the long-term, which is supply side and that part is just tricky. But 

it is two different models really, two different approaches. 

Mr. LEWIS. It certainly is. It is a great debate. In 2012, you came 

out with the exchange coverage rates for the Affordable Care Act. 

And that estimate updated from 2010, you said that by 2016 you 

predict, I think, around 23 million would be covered under the exchanges. The Center for Medicare and Medicaid Center said 10.4 

was the actual number. What happened there? 

Mr. HALL. Well, the first thing that happened was the Supreme 

Court decision that took away the requirement that States expand 

Medicaid. So, that threw a big kink into things. Once we corrected 

that, we have still been off a little bit. Let me mention a little bit 

of the talk about the exchange stuff just really quickly is a little 

bit of cherry picking because the most important thing was getting 

the budget effect correct. We were not—— 

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Mr. LEWIS. Okay, I will cut you off. I have to go. But thank you 

so much for being here looking forward to a healthy debate. I 

would just hope you understand that you were created by a political branch of government. You serve the political branch of government. This is a political exercise, and so we have got to get the referee to make the most accurate call as possible. Thank you so 

much. I yield back. 

Chairman WOMACK. Thanks to the gentleman. And reference to 

his remark about the Super Bowl there is one other thing you can 

take to the bank and that is the Minnesota Vikings will not be winning the Super Bowl. 

Mr. LEWIS. No, that is low. I miss Chairman Black already. 

Chairman WOMACK. I am going to hear from all the Minnesota 

people now. Mr. Higgins of New York. 

Mr. HIGGINS. Thank you, Mr. Chairman. And coming from Buffalo the Super Bowl is not a good subject. 

Dr. Hall, thank you very much just a couple of questions. And 

the previous speaker had talked about supply side, and these are 

all very fair debates that should be debated rigorously. And, you 

know, supply side trickle down. And I think the new term for all 

of that is dynamic scoring. And that is what the future economic 

impact from tax policy will be which is, you know, it is not an exact 

science and I guess that is why it is subject to a lot of interpretation. 

But a couple of things that concern me, you know, the treasury 

secretary had stated explicitly—explicitly—that the tax cuts as proposed that are now in the bill, particularly the corporate tax cut, 

which was about 14 percentage points, but the percentage change 

was actually 40 percent. The tax cuts generally pay for themselves. 

Do you believe that? 

Mr. HALL. I want to be really careful because different tax 

changes have different effects. Some can have an effect probably on 

supplies and some on the demand side. 

Mr. HIGGINS. Okay. 

Mr. HALL. I think the literature, we need to look at the literature, and how things have been affected going forward. And we 

are going to have our own estimate of it is not an effect of just the 

bill, but we are going to work in the tax cuts into our economic 

forecast, so you will see how we view that particular bill, how it 

is affecting—— 

Mr. HIGGINS. Okay, well I appreciate your cautiousness. But I 

would remind you that there is not a tax cut in human history that 

has ever paid for itself, not once, ever. The best literature in that 

area comes from Harvard and Yale economists who say that bestcase scenario that you could recapture in economic growth about 30 

cents for every dollar in tax cut. And I would challenge you to challenge me as to whether the literature says anything differently, but 

let me move on. 

The White House Council of Economic Advisors came out with a 

report saying that the corporate tax cut would result in increasing 

annual household income. I am not talking about a one-time bonus 

but annual household income of between $4,000 and $9,000. Do you 

believe that? 

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Mr. HALL. I have not read that report but I can tell you we will 

have our own analysis, independent analysis, of the effects of that. 

Mr. HIGGINS. But you are familiar with that report. 

Mr. HALL. I am not really, to be honest. 

Mr. HIGGINS. You are not familiar with that report? Everybody 

in America is familiar with that report. That has a direct impact 

on the Federal budget. Because if you increase household income, 

that increases aggregate demand in an economy. Where aggregate 

demand is increased in an economy that increases employment. As 

head of the Congressional Budget Office, this issue has been discussed, debated, in various publications over the last 6 months. I 

am shocked that you have never heard of that. 

Mr. HALL. I can tell you in a few months’ time we will have our 

own analysis and our own view of that. And we will be very careful 

to explain why we have come up with whatever estimate we come 

up with. 

Mr. HIGGINS. Okay, just switching topics infrastructure investment. I think the President will talk a little bit about tonight, presumably, about an American infrastructure investment of some 

$200 billion, which will be used to leverage somewhat of a trillion 

dollars in infrastructure through the combination of State and local 

contributions in the private sector. 

I think all of us agree that an infrastructure investment is desperately needed. But I would remind people that the $200 billion 

is woefully inadequate. And I would provide, as an example of that 

is the United States deficit financed $180 billion over the last decade rebuilding the roads and bridges of Iraq and Afghanistan. 

Those were off-budget, they are deficit financed, they add directly 

to the debt. So, what would be the ideal infrastructure investment 

to really have a positive impact on job growth in the American 

economy? 

Chairman WOMACK. Give the witness about 20 seconds to answer. 

Mr. HALL. Okay. Really quickly we are prepared to analyze any 

proposal that comes forward. We will do it carefully and in detail. 

I do not want to make recommendations. We do not do that. 

Mr. HIGGINS. Thank you, sir. Thank you. I yield back. 

Chairman WOMACK. Next, we go to the keystone State, which 

could produce a Super Bowl winner, Mr. Smucker. 

Mr. SMUCKER. Thank you, Mr. Chairman. Yes, that is one other 

given. One thing that we know is that Philadelphia will be there. 

So, thank you and congratulations. 

Dr. Hall, I would like to thank you for the work that you do, the 

work that your staff does. And I have some comments. Some of my 

comments have already been addressed but I would like to start by 

just saying how important I think CBO is to the Committee and 

to the budget process within the Committee and within Congress. 

And it is important, really, to asserting the proper constitutional 

role of Congress in developing a budget. And I say that from the 

perspective of having served in the Pennsylvania State Senate. 

During my time there initially we had no equivalent to the CBO 

in the Senate. And even when negotiating with a governor of the 

same party we had to rely entirely on the executive branch data 

in regards to decision making. And it changed the dynamic draBU00-A363290 with DISTILLER

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matically when we established the independent fiscal office of the 

legislative branch, similar to your role. So, yes I disagreed with 

some of your analyses about healthcare but we cannot lose sight of 

the fact of the importance of the initial intent of the CBO that was 

laid out in 1974, and of the importance of the work that you do to 

what we do. 

I do think the effectiveness of the CBO is almost entirely dependent on its perception of Members of Congress. And number one, it 

has to be perceived as nonpartisan. And number two, it has to be 

perceived as accurate as possible. I like your idea of more communication with Members of Congress to talk about what CBO does. 

You said you come to congressional offices if they request at any 

time. But I think what you should see as part of your role is to continue to talk about what you do and the importance of what you 

do. Is that part of your strategic plan at all? 

Mr. HALL. Yes. You see, the only time that I think I shy away 

from that is I do not want to talk about legislation as being debated. I do not want to get involved in the political process, but 

otherwise, yes, absolutely. 

Mr. SMUCKER. Have you ever brought members to your facility 

to show the operations? I think is something I would like to do at 

some point. 

Mr. HALL. Yes. And you are welcome to come over. 

Mr. SMUCKER. We have talked about the part there has been a 

lot of discussion about the importance of being nonpartisan. I think 

it is equally important that we can believe that we have the best 

thinking out there in regards to policies in regards to your analyses. And we know that predicting is tough, and it reminds me of 

a quote that has often been attributed to Mark Twain when he 

said, ‘‘Predicting is difficult, particularly about the future.’’ 

But, I guess, in terms of experts that you bring in, could you 

characterize to me what you look for. Are you looking for the best 

thinking in the country? Would you say that the group you have 

really does provide some of the best experts in terms of policies 

that we are looking at that? 

Mr. HALL. Absolutely, I do. I think we get people who are very 

smart and very capable who have a lot of technical skills. And part 

of how we get them is because we work for Congress. They feel like 

they can make a difference by helping inform Congress that we 

have an important job. And one of the things I think is underrated 

is we spend a lot of time, our folks, keeping in touch with experts 

around the country. So, we have a really good understanding—— 

Mr. SMUCKER. How do you choose those experts? 

Mr. HALL. Well, part of it starts with our panel of economic advisors. We have a really good panel. They are all very well smart, 

connected people. And we do a lot of calling and say, ‘‘Well, here 

is a topic we are concerned about. Who should we talk to?’’ And we 

make an effort to get literally we get some of the opposing views. 

If you look at some of our analytical research reports that we put 

out, you will see us list the names of the people who reviewed it. 

We treat it like it is a journal article. 

So, we try very hard to sort of multiply ourselves and use research—— 

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Mr. SMUCKER. I am running out of time, and I am sorry to interrupt you. I have a number of other questions but one that I really 

wanted to get to was CBO was first put into place 43 years ago. 

I think we should look at the entire Budget Act of 1974 and update 

it and improve it. As a part of that how can we ensure CBO is 

more effective, more efficient, in its operations? You cannot answer 

that now, I do not think. But I would love to hear from you at some 

point about whether you had specific ideas or specific recommendations for updating the act and improving your operations. 

Mr. HALL. Sure. 

Mr. SMUCKER. Thank you. 

Chairman WOMACK. Ms. Schakowsky from Illinois. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. I also want to associate myself with the comments and the questions of Mr. 

Smucker. We are all interested in CBO being able to do the best 

job. And I want to thank you for the work that you do and associate myself with all the ‘‘thank yous’’ that we have made. 

After the passage of the Republican Tax Bill in December, CBO 

revised its cost estimate for the expenditures for the Children’s 

Health Insurance Program. In fact, the new estimate showed that 

reauthorizing CHIP for 10 years would save the government about 

$6 billion. So, why did passage of the GOP tax bill change the 

CBOs for CHIP so dramatically? 

Mr. HALL. Well, the elimination of the mandate had an effect. 

And one of the short versions is the elimination of the mandate, we 

think, will raise the average premiums in exchanges. And since if 

children are not covered under CHIP they are likely to be covered 

in exchanges or through Medicaid, then it will cost the government 

more by having children covered that way as opposed to CHIP directly. 

Ms. SCHAKOWSKY. So, essentially the CHIP savings are a side effect of the increased costs that Americans are going to face due to 

the Republican effort to undermine the Affordable Care Act. 

Mr. HALL. I would not word it that way, but it is an effect of the 

mandate. 

Ms. SCHAKOWSKY. Eliminating the mandate. CBO looked at the 

effect of repealing the individual mandate, the number of uninsured Americans, and premium costs. What did the CBO estimate? 

Mr. HALL. We estimate that after 10 years, the number of people 

covered with insurance will be down by about 13 million people, 

relative to the baseline. And that premiums would be about, in exchanges, be about 10 percent higher at the end of that time period. 

Ms. SCHAKOWSKY. And what about the administration’s decision 

to end cost-sharing reduction payments, the ACA Outreach Budget 

by 90 percent, allow work requirements for Medicaid? Were those 

part of that calculation as well? 

Mr. HALL. No. We have treated the cost-sharing reductions as actually as an entitlement, at least so far until we get other direction 

from the Budget Committee. So, since it is an entitlement it was 

not affected. 

Ms. SCHAKOWSKY. Beyond the tax bill, how does the CBO account for administrative action that change implementation of the 

ACA? Is that a consideration as well? 

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Mr. HALL. It is and that is one of the more difficult things sometimes to estimate, that certainly was with the ACA because there 

was a great deal that had to be done to implement the ACA. And 

we had to make some assumptions about how it would be implemented, how well it would be implemented. And, you know, clearly 

some of that did not happen so well. And so, we have updated. We 

update it every year. We update our estimate of the operations of 

the exchanges and that sort of thing to try to take that into account. 

Ms. SCHAKOWSKY. So, was there consideration of the fact that 

there was a reduction in the amount of publicity, of telling people 

about it, a shortening of the enrollment period. Was that prior to 

the calculation? 

Mr. HALL. It will be. We have not. It has been a little while since 

we updated it. We will probably do that this spring. We will talk 

about that and see if we think that is having some really solid impact that we can measure. 

Ms. SCHAKOWSKY. Thank you. Is the CBO updating scores of 

other health legislation following the passage of the tax bill and the 

temporary authorization? 

Mr. HALL. Yeah, there are some proposals out there. If we are 

working on anything it might be technical assistance, in which case 

I cannot talk about it. But if we are asked to update any of those 

by the Committee of jurisdiction we will do an update on those. 

Ms. SCHAKOWSKY. So, you initiate or are you always responsive 

to inquiries from the Congress? 

Mr. HALL. We do not initiate very much at all. We respond. 

Ms. SCHAKOWSKY. Okay, and that goes for the administration as 

well? No, I am talking about looking into acts of the administration; executive orders, et cetera. 

Mr. HALL. Sure. Yeah, no we actually we do certainly every year 

we go down and look to see if there has been some changes in implementation, whether it is executive orders or et cetera, that are 

going to have a big enough impact to change our baseline. And we 

will change our baseline if we see those. And we will try to detail 

it in our Budget Outlook Report if they do. 

Ms. SCHAKOWSKY. I appreciate your work. And I yield back. 

Chairman WOMACK. Thank you, Ms. Schakowsky. Let’s go now 

to Georgia, Mr. Ferguson. The witness is yours. 

Mr. FERGUSON. Thank you, Mr. Chairman. Dr. Hall, thank you. 

And I want to thank you for taking time to come to my office. I 

have taken you up on that offer. I would encourage other members 

of the Committee to spend some time with you and your staff in 

their offices, or in your office, really talking about the process. And 

I want to thank you for the direct and candid responses that you 

gave me. I found it helpful and look forward to continuing that. 

One of the things I want to go to. I want to get back to process 

here. If you could go back and pick a 5-year window in the budget 

process, okay? And it does not matter to me where it is. Let’s go 

back 10 years, 12 years, 15 years and look at the estimates that 

you made in year one and what they actually turned out to be 10 

years later. And do that to the second year and go out another 10 

years, and third year, and all the way out year five. 

Mr. HALL. Right. 

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Mr. FERGUSON. What is the accuracy at the 10-year mark when 

we are making a decision on the budget, we are making it on this 

10-year budget window, okay? So, if you go back historically what 

is the accuracy at 10 years from the date that this Budget Committee acted on those recommendations or those assumptions? 

Mr. HALL. Yeah, just this past year we looked at our record for 

estimating outlays. And, you know, it is in kind of broadish categories but it gives you an idea of the average error. We looked at 

it at the budget year and then we looked at it 6 years down the 

road rather than 10 years down the road. But, after 6 years, our 

average error was about 3 percent. 

Mr. FERGUSON. Three percent? 

Mr. HALL. Three percent. 

Mr. FERGUSON. Yeah. 

Mr. HALL. So, that, of course, that means for individual smaller 

parts some could be higher, some could be lower but they averaged 

out to be about 3 percent error. 

Mr. FERGUSON. Yeah, we are making decisions on a 10-year window. 

Mr. HALL. Right. 

Mr. FERGUSON. Okay? Which is where, you know, it becomes 

harder and harder the further you go out to predict, correct? 

Mr. HALL. Right. Yeah, I mean, maybe when we update this report we will consider trying to do it for a little bit longer. 

Mr. FERGUSON. Well, and let me say I would encourage you to 

do that because I think it is important. If we are going to make 

decisions based on a 10-year assumption it does us very little good 

to only have six years worth of historical data. I mean, we are 

missing, you know, a significant portion of the equation in doing 

that. 

So, when you look at it and you look at the results during that 

window what tools do you need to close that gap? Because, you 

know, 3 percent may not sound like a big number but, you know, 

when you have got a $4 trillion budget hanging around that is a 

pretty big number. 

Mr. HALL. Right. 

Mr. FERGUSON. So what do you need to be more accurate in that? 

Mr. HALL. Yeah, you know, that is a good question because we, 

you know, we have a lot of challenges. One of which is that we just 

have so much more work than we can handle. But that is not really 

an issue of being able to just throw resources at it because we suffer from a real peak load problem, right? When healthcare gets 

popular, our poor healthcare well, not our healthcare people they 

are not poor because they get energized with this. They are working full time. 

Mr. FERGUSON. So, can you talk very briefly about maybe developing, or should we consider developing a new model for scoring. 

You know, we are in this debate right now demand side versus 

supply side. You know, you have heard it here today. But, you 

know, do we need to look more at what the private sector does to 

predict using predictive algorithms to anticipate changing consumer behavior? I think the private sector does that in a very, very 

effective way and should we look at doing that more here, or your 

office do that more, to give us a better outlook? 

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Mr. HALL. We certainly could, you know, we really do look to research and we do try to talk to private sector folks. So, you know, 

we can continue to make an effort to sort of see how we can improve our accuracy by talking with other people, like the private 

sector, who does similar sort of work. 

Mr. FERGUSON. I think it would be important that we look at two 

things I want to push on this. Again, I think we need to look at 

the 10-year accuracy. Okay, if we are going to operate in a 10-year 

budget window we need that 10-year data out there. I think that 

is pretty important because we need to see what those outlying 

years are actually like. And then to look at right at, you know, look 

at different modeling programs that use predictive algorithms to 

look at consumer behavior and how that may change these budget 

outlooks. 

The final question that I want to ask you is something that when 

the gentleman from Pennsylvania spoke, Mr. Smucker, and he was 

asking about your hiring process and you said, ‘‘We try to get people with opposing views.’’ Define the view and the opposing view. 

Mr. HALL. Sure. And by that I do not mean in our hiring but in 

our consultations with folks. If it is a topic where we know in the 

literature there is some debate in the literature, this has a big effect, this has a small effect, they focus on different things. That is 

the sort of thing we will look at because our real goal is to sort of 

try to represent the state of research on that topic. And, you know, 

sometimes there is not full consensus on a research topic. So, that 

is where we look for that sort of diversity. 

Mr. FERGUSON. So, the view would be the process by which you 

would have a demand side view and a supply side view, right? And 

I mean I know that is kind of a broad—— 

Mr. HALL. Yeah, I mean, it would be something—— 

Mr. FERGUSON. But that is what you are—— 

Mr. HALL.——like that that is right. That is right. 

Mr. FERGUSON. Okay, thank you and Mr. Chairman, I yield back. 

Chairman WOMACK. I thank the gentleman. Let’s go now to Ohio, 

Mr. Johnson. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Chairman WOMACK. It should be noted that the ranking member 

has agreed to allow us to take care of the people in the queue before we go to him. So, Mr. Johnson, the floor is yours. 

Mr. JOHNSON. Well, thank you very much. And, again, congratulations on your Chairmanship; this is your first hearing, and I 

think it is a good one. Dr. Hall, I too want to echo my thanks for 

you and your team coming by my office and having the meeting a 

few weeks ago that we did. 

I do not really know how to frame this question that I have. But 

I have heard you say a couple of times in your testimony, you 

know, ‘‘We use this model for this. We use that model for that.’’ It 

seems to me that there is an element of science and an element of 

art in the work that you guys are doing. There is an element of 

subjectivity and an objectivity, some fact, some assumption, and 

speculation. 

I am a pretty simple-minded guy. Is there not a way to develop 

a scoring methodology that applies to everything so that members 

and their staffs understand? I mean, we have talked extensively 

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here about the need for budget reforms because we have a budgeting process that does not work. We have got an appropriation 

process that fails us year after year, not for lack of intent but process. 

Seems to me it would be a lot easier to address some of our budgeting and fiscal concerns if we had more clarity and understanding 

around the methodology. Is there not a way to develop a methodology—the methodology—to score legislation so that members and 

the American people can understand what we are potentially getting ourselves into? 

Mr. HALL. We are certainly willing to talk about ideas that you 

have. You know one of the things that we actually have coming 

out, I have talked about documenting models, well, we are trying 

to also document our processes. We actually have a document coming out that says here is the process that we go through in creating 

a cost estimate. And so, here are all the steps, here is what we do. 

That is a transparency thing, so you can at least see exactly 

what we do and the process we undergo. And to the degree it gives 

you ideas on how we could do that differently or how we could articulate the results differently that might be an—— 

Mr. JOHNSON. A follow up question you just said, ‘‘developing a 

cost estimate.’’ A cost estimate is not the only thing that we need. 

I mean, we need to understand the long-term implications on the 

cost side, certainly, but on all of the other unintended or unplanned 

consequences of legislation. 

Mr. HALL. Right. 

Mr. JOHNSON. So, how do we get to that part of it so that we 

have a clear picture of what legislation is going to do. Not just the 

cost but the long-term. 

Mr. HALL. I think when we do cost estimates, in fact, we were 

just talking about this a little bit. We have, you know, we have accuracy. How much time do we spend with it to where we are really 

comfortable with the result? How much time do we have, right? 

You need to get it accurate, you need to have time to do it, then 

we need to provide transparency. Those are three things that conflict with each other quite a lot. I always think that the more time 

we have on an estimate to be able to do the work and do it carefully the better our estimate is, the more precise we can make it. 

Mr. JOHNSON. You know in business you look at three factors. 

You look at time, your money, and quality because you can get two 

of those in that pyramid but you cannot get all three of them at 

the same time. A higher quality is going to cost you more, it is 

going to take more time. If you want to cut time you are going to 

sacrifice quality or you are going to spend more money. 

You have mentioned a couple of times, at least I heard it once, 

and you just alluded to it there, taking more time. You said earlier 

that we have more work than you can handle. What drives that? 

I mean, the CBO is the organization that we go to get these 

things scored, and it is a critical part of what we do. And as my 

colleague from Georgia mentioned earlier, the politics of it is crazy 

in today’s 24-hour a day news cycle. Why do you have more work 

than you can handle? Is it a resource problem? Is it a time problem? Is it a training problem? Is it a—— 

Chairman WOMACK. Ten seconds to answer. 

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Mr. JOHNSON. What is it? 

Chairman WOMACK. Ten seconds. 

Mr. HALL. Okay, I would say the big issue is so little of our work 

is getting a piece of legislation handed to us and say, ‘‘score this.’’ 

So much of it is having ideas and helping Committee staff think 

through things. What are the things that we should be thinking 

about in this piece of legislation? That technical assistance takes 

up just a ton of our time. But it seems to be really valuable. There 

is a reason why they come to us to help with that. 

Mr. JOHNSON. Mr. Chairman, I do yield back, and I apologize for 

running over. That is an issue that we have got to address, I believe, as we talk about budget reforms and oversight of CBO. There 

has got to be a clear understanding of the process and what they 

are doing, how much time they take to do it, and whether they 

have the resources to do it or not because it has such serious implications to the work that we do here. 

Chairman WOMACK. That is what the Oversight Hearings are 

about. And we are going to have three or four of these so more to 

come. 

Mr. JOHNSON. I yield back. 

Chairman WOMACK. Gentleman from Indiana, Mr. Rokita. 

Mr. ROKITA. I thank the chair and congratulations, this is a 

great hearing. Dr. Hall, thanks for being here. I want to thank you 

and your staff, particularly your staff, who always seem to be responsive, especially when there is a lot of things going on. I can 

particularly remember the healthcare bill last year that we were 

able to work out some Medicaid issues. Really in the fast lane on 

that and I appreciate the responsiveness. 

Having said all that, when you talk about technical assistance 

how much would you say, what percentage of your staff’s work on 

technical assistance is given to Committee staff or Committees 

versus personal offices? 

Mr. HALL. Most of it is Committees. That is absolutely true. But 

when we do help personal staff it tends to be technical help. So, 

because individual members they do not have legislation that is at 

a Committee, so it is not typically a formal estimate. 

Mr. ROKITA. So again, what percentage of your staff’s time is 

used with personal—— 

Mr. HALL. I do not know we would have to look into. We probably do 350, 400 informal estimates for individual members during 

the year. 

Mr. ROKITA. Yeah, I would appreciate that in writing just as we 

go through this debate to understand where you guys are spending 

your time. 

You talked with Ms. Black about behavioral assumptions. And 

how you looked at available literature and you offered a member 

of Congress to submit literature if the estimate or the scoring came 

back and it was not what was expected or assumed or anything 

like that. Is there a procedure for a member of Congress to submit 

literature as they submit the bill for scoring to you? 

Mr. HALL. I appreciate that question, because that is one of the 

things that we do when we get some legislation. We ask the Committee staff, whoever gave it to us, now is there some data you 

want us to look at? 

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Mr. ROKITA. Okay. 

Mr. HALL. Is there some research you would like us to see? 

Mr. ROKITA. You were not made to wait. Members of Congress 

are not made to wait until we receive the scoring back. 

Mr. HALL. Oh no, absolutely not. We want to be sure we look at 

what you are thinking of. 

Mr. ROKITA. All right, I appreciate that. When you talk about the 

economic advisors and the health advisors that you have I want to 

focus on that process a little bit. You say you use these economic 

advisors to ‘‘multiply’’ your ability to understand what is going on 

in the world. What is their objective methodology you use in selecting these people? 

Mr. HALL. No, to be honest it is literally a director’s choice to 

sort of look at the makeup of the Committee and think about 

whether we want some little strengths in one area or another area 

and to think about whether we have the right kind of balance. 

Mr. ROKITA. So how do you ensure absent any criteria or objective methodology how you are not creating a little echo chamber for 

yourself or your organization? 

Mr. HALL. The best I can say is we put the names of everybody 

up on our website. You can take a look through the panel to get 

an idea. 

Mr. ROKITA. I have been looking. 

Mr. HALL. Yeah. 

Mr. ROKITA. And honestly, while I can determine some, perhaps, 

some of their natural bias or professional bias based on the organization they represent or work for, I do not know any of them personally. I have not peer reviewed their published work. Have you? 

Or is there any methodology or criteria that would force you to 

peer review their work to ensure you have a mix of economic ideology and theory and all that sort of thing? 

Mr. HALL. Absolutely. We do look through their work, and we do 

get an idea—— 

Mr. ROKITA. Okay, so that is what I am asking. When I ask you 

if there is an objective methodology you responded and said, ‘‘Hey, 

it is kind of a director’s pick. We look to make sure that,’’ in your 

mind, ‘‘that it looks great.’’ But is there any objective methodology 

or criteria or process that your organization goes through—— 

Mr. HALL. Sure. Well, this is one of the reasons why we have 

very technically capable people working at CBO because they keep 

up with literature and read the literature. And we get people on 

the panel we expect them to be technically capable and to be objective in their advice on things, just like we try to be objective in our 

working, as well. 

Mr. ROKITA. Right, but you understand, sir, if you do not have 

an objective methodology, if you do not have a set of published criteria for how you are picking these people, you risk at least the attack, if not the reality that you are creating an echo chamber onto 

yourself. And that if you are using these advisors to inform your 

work to members of Congress, then you might unintentionally or 

intentionally create a bias that might cause some of this tension. 

We might be seen from time how am I going to give a bill? So, 

my suggestion to you would be, well, let’s make this process more 

transparent. I mean, it is a great start to have at least the names 

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of the people on a website. Let’s create and agree on. By a bipartisan way, let’s publish a set a criteria or methodology that you 

might use to select these people, if in fact they are informing your 

work to such a degree. 

Mr. HALL. Well, let me just be clear. I mentioned those folks because they help sort of keep us balanced. We make our own decisions. We make our own judgments. We try to help inform our own 

judgments, but I do not want to suggest that they are making decisions for us. 

Mr. ROKITA. Well, I am not suggesting that in my questioning. 

My time is up, but the point is, you brought up this panel up as 

a way to inform you work, which I think is healthy, assuming that 

that panel is healthy. I yield back. 

Chairman WOMACK. All right, thank you. Mr. Brat, Virginia. 

Mr. BRAT. Thank you, Mr. Chairman, for holding this hearing. 

Thank you, Dr. Hall, for being with us. I have four questions I 

want to kind of get to real quick. I used to be a liberal arts professor, and sometimes what is missing in this city is a connection 

between pieces of knowledge. 

And so, my friends over there, John’s a nice Democrat friend, I 

like all, but they are very smart and intelligent the way they ask 

questions. We had the Chicago economist up here, they were asked 

‘‘Does the tax bill pay for itself?’’ 

And the economist correctly said, ‘‘No. Probably does not. Probably pays for maybe a third.’’ Right? And then, you get into current 

law versus current policy, also may give a third. And the key question is, and no one really cares about, does the tax bill pay for 

itself? I care. Does the economy pay for it? Do all of our policies 

together pay for it, when you put in deregulation and some of those 

outcomes as well? 

And so, that is what I find missing. And even when you score, 

the score is always at the Federal level only. It does not include 

State and local impacts. Right? Which also has a huge impact. I 

think State and local revenues are about 40 percent of Federal. 

And so, if you abstract away from this, it becomes politically misleading, even though you do not intend. You have been asked a 

narrow question; does the bill itself pay for itself, et cetera, when 

you score it? So, how do we get at truth in its totality to avoid the 

politics? And I do want truthful outcome. Right? We are not making decisions on that question. How do you think about that quickly? 

Mr. HALL. Sure. No, one of my points was we adapt to what Congress wants. If there is something different that you want that we 

can do, we are happy to talk with you to try to work it out. 

Mr. BRAT. Okay. Well, then it is on us. I mean, I am interested 

in that, because if you look at the Fed forecasting, which is horrendous after the ’08 recession. Partly they were cheerleading, and I 

do not blame them. Right? But they were always rosy scenario, and 

it never got there, right? And there is reasons for that. But there 

is systematic bias for 8 years in a row. 

I mean, you have got a problem when you can guess the direction 

of the error, year after year after year. The second big issue that 

is coming our way; we just had the budget debate. The CSR bailouts subsidies, et cetera. What is the assumption of CBO on the 

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score there? President Trump ended the CSR payments. How is 

that going to be scored? As if he is ending them, or as if he is continuing them? 

Mr. HALL. We have been treating it as an entitlement. 

Mr. BRAT. Okay. 

Mr. HALL. So, it has remained there, unless we get direction to 

do something different. 

Mr. BRAT. Okay. 

Mr. HALL. So, we are assuming, essentially, that the money will 

be found somewhere, because it is an entitlement. 

Mr. BRAT. Right. And that brings us back to the whole 

healthcare debate. And the score there, again, I just do not feel like 

we got a systematic account, right? In Charlottesville, I think we 

got the highest rate quotes in the country. I think $39,000, all in, 

before a family of four on the individual side gets to access insurance. That is not sustainable. 

And so, we would love your economist to say, ‘‘Hey, the way you 

are going, the economics are not sustainable for healthcare in addition to showing us, you know, the merits of technical bills,’’ and the 

big programs, too; Medicare, Social Security. And I will just add 

one other piece that is interesting to me lately. Immigration is a 

huge issue coming our way, right? We are all debating that. And 

so, have you guys done any scoring on the total cost of illegal immigration yet? 

Mr. HALL. No, we have not. 

Mr. BRAT. How do we get these folks to preempt? Right? These 

studies take long periods of time to do. And so, I mean it is a major 

issue. Can I request that? Or at what level will a request be acted 

on if we ask for a score? 

Mr. HALL. Well, I will you what a good starting point might be, 

is I will be happy to talk to our folks. We can come in and talk 

to you about our take on the literature. What literature is out 

there, what it says about immigration and the effects. Give you an 

idea of sort of where we see things at the moment and then, you 

know, whether or not you want us to do some work. 

Mr. BRAT. Right. Right. And I do not want to get, you know, political, but it is pretty well-known in academia. Right, I came from 

a small liberal arts college, et cetera. And you can go around the 

country and look at the makeup of who they donate to and who the 

politics are to. 

If you go to Harvard and Yale and Princeton, and it is not bad, 

it is free country, you can be in a party of one. But if you do not 

have any economist on a faculty who voted for the current President of the United States, you might call that bias, right, in a certain sense. And that includes even kind of a burning kind of thing, 

right, and a burning populist thing over on the left that ran 

through the country. And I am curious to hear your response. How 

do you track that? 

Mr. HALL. Let me give you an example of the challenge for us 

a little bit. But I think we handle it pretty well. We looked at the 

effects of minimum wage. 

Mr. BRAT. Yep. 

Mr. HALL. Ton of literature about minimum wage. 

Mr. BRAT. Yep. 

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Mr. HALL. Lot of it has an agenda. A lot of is not very—— 

Mr. BRAT. Right. 

Mr. HALL. So, we did a lot of sorting through; not who the people 

are but sorting through the actual research. What was good research, solid research, what was not. 

Mr. BRAT. Yeah. 

Mr. HALL. We culled that down and focused on things. It was the 

actual work we tried to focus on. 

Mr. BRAT. Right. 

Mr. HALL. That was really what got us down to where we had 

somewhere to go. And I think that is sort of how I think about the 

people we talk to. We try to let their research speak for them. 

Mr. BRAT. Right. Right. I know what is somewhat missing is the 

normative aspects of economics, right? We try to abstract from that 

and act like we are doing objective, you know, social science, when 

it is very hard to come by that. Am I already over? 

Chairman WOMACK. Yes. 

Mr. BRAT. Sorry, I thought I had 28 left. All right, Mr. Chairman, thank you very much for running the hearing. Thank you 

very much for being here. 

Chairman WOMACK. Thank you, Mr. Brat, for your commentary. 

We have two that have joined the dais. Ms. Jackson Lee, you can 

be next. Are you prepared? 

Ms. JACKSON LEE. I am. 

Chairman WOMACK. Okay, Ms. Jackson Lee, from Texas. 

Ms. JACKSON LEE. Thank you, Mr. Chairman, and congratulations to your position. And Mr. Yarmuth, ranking member, thank 

you for this important hearing. To Dr. Hall, thank you so very 

much for your patriotic service to this Nation. I was just in the Judiciary Committee, voting on the need for transparency and to view 

something called the Nunes memo and the underlying materials, in 

as much as my colleagues on the other side of the aisle have chosen, in certain Committees, to issue statements without facts. Is it 

the role and the mission of the CBO to present whatever they 

present on the basis of facts? 

Mr. HALL. Absolutely. 

Ms. JACKSON LEE. I recall being here in 1997 and, in actuality, 

it was the budget resolution of 1997 that created the Children’s 

Health Insurance Program. I am not sure if you were on staff or 

you might be aware of that, but good things can come out of a 

budget resolution we have offered to save lives. 

But allow me for a moment just to create the atmosphere very 

quickly. Unlike in a dictatorship, autocracy, or monarchy, where 

the king is law, in a constitutional democracy, such as the United 

States, the law is king. And you can judge the soundness and 

health of a constitutional democracy not by the physical health, the 

mental health of the chief magistrate, but the vitality, robustness, 

strength, and resilience of its critical institutions. 

The President began his term in office by disparaging and distrusting the intelligent community. He learned that the FBI was 

investigating this Russian interference of the elections and whether 

the Trump campaign personnel were involved. 

The President tried to coerce the personal allegiance of FBI Director Comey. Failing to secure that, he fired him. When Special 

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Counsel Mueller was appointed to take and oversee the RussiaTrump investigation, the President and his Republican acolytes in 

Congress began a campaign that continues to this day of obstructing, disparaging, and trying to discredit. 

And here, we are now looking at an institution that has since 

1974 has in a nonpartisan manner done the work that it should do. 

And we are being disparaged and litmus test of who voted for 

whom. I would just ask a simple question: as you are looking at 

talented analysts, others with Ph.D.’s and masters, do you ask 

them to show you, first of all, their voter registration card? 

Mr. HALL. Absolutely not. 

Ms. JACKSON LEE. And then, since we do not really have registration parties, or at least they are not in my State, in Texas, do 

you ask them what political party they are in? 

Mr. HALL. I do not. 

Ms. JACKSON LEE. As you continue discussion to oversee the 

work that you do, and I assume teams are called together of expertise and they are analyzing. In that discussion, do you ask who you 

voted for President of the United States? 

Mr. HALL. No. 

Ms. JACKSON LEE. Would that be the appropriate guide in which 

you make your determinations for those very important work that 

you are doing? 

Mr. HALL. Absolutely not. 

Ms. JACKSON LEE. So, let me precede on this. Is this a document 

that you have produced? 

Mr. HALL. Yes. 

Ms. JACKSON LEE. ‘‘10 Things to Know About the CBO.’’ 

Mr. HALL. That is right. 

Ms. JACKSON LEE. ‘‘Number one: lawmakers created the CBO to 

give the Congress a stronger role in budget matters.’’ Is this a political statement? 

Mr. HALL. I hope not. 

Ms. JACKSON LEE. Well, I mean, did you intend it to be a political statement? 

Mr. HALL. I did not. 

Ms. JACKSON LEE. ‘‘Number two: the Congress sets the CBO priorities.’’ Did you intend that to be a political statement? 

Mr. HALL. I did not. 

Ms. JACKSON LEE. I ask unanimous consent to put this statement of the CBO into the record. 

Chairman WOMACK. Without objection. 

Ms. JACKSON LEE. Thank you Let me ask, specifically, points. 

The recent tax bill made substantial changes to the Tax Code that 

will have wide-ranging impacts on the budget and the economy. 

Can you walk us through how you bill that into your baseline? And 

I know my time is short, so abbreviate. 

Let me give you this other one. And what is CBO’s best estimate 

of the impact of the recent tax bill on the deficit? And do you do 

this in a nonpartisan way? And if you can remember the third 

question, would you explain why the scoring of a simple CHIP extension changed after the enactment of the tax bill? 

Mr. HALL. Sure, okay. The actual tax bill itself was scored by the 

Joint Committee of Taxation. We are required to take their estiBU00-A363290 with DISTILLER

58 

mate and put it in to the estimate. But when we do our baseline, 

which we are working on right now, we will fold in the effects of 

the tax bill. 

Ms. JACKSON LEE. May I pause you for one moment because of 

my time? 

Mr. HALL. Sure. 

Ms. JACKSON LEE. Can I get that in writing? 

Mr. HALL. Sure. 

Ms. JACKSON LEE. Get your staff to remember that. So, let me 

just jump to this question. 

Mr. HALL. Okay. 

Ms. JACKSON LEE. Is this tax deficit going to have an impact on 

the budgeting process of the United States? The tax bill being 

passed creating a $1.4 trillion deficit, is that going to create an impact? I just said impact. 

Mr. HALL. Sure. No, it will likely change our forecast for the next 

10 years or 30 years on budget. 

Ms. JACKSON LEE. And impact government as well? So, the deficit tax scam bill is going to impact it. Let me ask you this. You 

talked about the question of an aging population. Full employment, 

or the opportunity for people to work increased the engine of the 

economy. So, suppose, just speculate, DREAMers were able to 

work, or younger population; does that drive the economy? 

Mr. HALL. The effect of any of those things on the labor supply 

is part of our analysis. 

Ms. JACKSON LEE. So, all of that plays into it. 

Mr. HALL. Yes. 

Ms. JACKSON LEE. And you make the analysis fairly, without any 

attention to political yeas or nays? 

Mr. HALL. That is correct. 

Ms. JACKSON LEE. I thank you. With that, Mr. Chairman, I happily yield back. Thank you very much. 

Chairman WOMACK. Thank you, Ms. Jackson Lee. Mr. Grothman, 

Wisconsin. 

Mr. GROTHMAN. Thank you, sir. I was at a couple of other meetings first, but I decided to save the best for last. 

Chairman WOMACK. Understood. 

Mr. GROTHMAN. I will give you a couple of questions kind of off 

the top. I know this has been asked already. What time every year 

do you come out with your estimates, as far as future revenue estimates? 

Mr. HALL. We do our first baseline analysis typically around this 

time of the year. We are going to be delayed because we are working on the tax bill. 

Mr. GROTHMAN. Okay. I would like to ask you, because there is 

a feeling that the business optimism may have changed or attitudes toward government may have changed when President 

Trump was elected. Could you tell us right now what the receipts 

were? Do you have the receipts yet for fourth quarter last year? 

Government income tax receipts? 

Mr. HALL. No, I do not think we do. But I certainly do not have 

them in front of me, I am afraid. 

Mr. GROTHMAN. Okay. Are they available yet? 

Mr. HALL. If they are, we can get them to you. 

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Mr. GROTHMAN. Okay, well, we will go back. 

Mr. HALL. They probably are. 

Mr. GROTHMAN. We will look at the third quarter. 

Mr. HALL. Okay. 

Mr. GROTHMAN. Do you have the receipts for the third quarter 

of 2017? 

Mr. HALL. I am sure we do. 

Mr. GROTHMAN. Do you know whether those were higher or 

lower than your estimates were for the prior year, at the time you 

came up with an estimate? 

Mr. HALL. Yeah, yeah. No, I do not know. We actually, every 

quarter, we do produce a little document that tells you how we are 

doing with receipts. 

Mr. GROTHMAN. But you do not know whether it was above or 

below projections? 

Mr. HALL. I do not off-hand, no. I am sorry. 

Mr. GROTHMAN. You know, I want to like you a lot. That is usually a big deal. Okay. That just kind of amazes me, but we will 

switch gears a little bit. You have said that you want about a, 

what, 9 to 10 percent increase in spending next year over last year? 

Is that true? 

Mr. HALL. Oh, yes, that is right. That is right. 

Mr. GROTHMAN. Right. And you are not alone in that. 

Mr. HALL. Right. 

Mr. GROTHMAN. I mean, everybody thinks the problem we have 

in this government is we are not spending enough money, so I am 

not going to single you out for that. But you are apparently, right 

now, spending substantially more than in President Bush’s last 

year, correct? It has been 8 years ago. 

Mr. HALL. I am sure that is true. 

Mr. GROTHMAN. Right. They always feel as things become more 

computerized or automated, you should require less people. But 

you feel you need a substantially larger staff today than 8 years 

ago? 

Mr. HALL. We are trying to respond to Congressional interest in 

speeding up some of our estimates and providing more transparency. And if we are going to do that, we need more staff. 

Mr. GROTHMAN. Okay. You think Congress is asking a lot more 

questions than they were 8 years ago? You really feel the demand. 

Maybe it is the demand for your services is much greater now than 

it was 8 years ago? 

Mr. HALL. I was not around 8 years ago, but I am sure it is true, 

actually. But a lot of the transparency stuff is just not free. You 

know, we have to take time to do that, and something has to give. 

Mr. GROTHMAN. Okay. You right now have 233 full-time employees. Is that true? 233? And how many employees do you think you 

would need to adequately do your job? 

Mr. HALL. I think we are fine adequately doing our job now, but 

if Congress wants more from us, we have a plan to increase our 

staff by only about 20 people over the next 3 years that we think 

will enhance—— 

Mr. GROTHMAN. Okay, right now you feel you have enough people to deal with inquisitive congressmen? You are worried more 

about the future? 

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Mr. HALL. Well, let me put it this way. Since I have been at the 

job, we have way more work than we can do. And so, we just have 

to prioritize things. 

Mr. GROTHMAN. Okay. 

Mr. HALL. So, one of the more frustrating things for me is dealing with individual Members who want some of our time, when at 

the same time, we are working very hard all out on some other 

work for a Committee. And it is just a matter of resources. 

Mr. GROTHMAN. Okay. You think sometimes Congressmen ask 

dumb questions? 

Mr. HALL. No. No, actually, they do not. 

Mr. GROTHMAN. Good. In order to turn around stuff on a timely 

basis, you feel you need about 20 more people than you currently 

have? And if you were given your rather substantial increase, you 

would hire 20 new employees. Is that what you would do with it? 

Mr. HALL. That is right. But also, some of it is our increase in 

cost of doing business for us, which includes cost of living raises for 

people. 

Mr. GROTHMAN. Okay. 

Mr. HALL. If you do not get money for cost of living, then we 

have to go down a couple of people. 

Mr. GROTHMAN. Okay. Okay, those are the questions. I will yield 

the remainder of my time. Thank you. 

Chairman WOMACK. Thanks to the gentleman from Wisconsin. 

My ranking member has been very patient through this entire 

process, deferring his questions to the end, as I have. And I want 

to yield to the gentleman from the Commonwealth of Kentucky, 

Mr. Yarmuth. 

Mr. YARMUTH. Thank you, Mr. Chairman. And it has been an interesting session. I have enjoyed the conversation. So, thank you, 

Dr. Hall. Thank you for your testimony and your responses. They 

have been very cogent, and I appreciate them. And I also want to 

add that I have been the beneficiary of visits from you and your 

team and they have very, very valuable. I have had the pleasure 

of coming to your place of business and your team is very impressive, as well. 

First of all, I want to mention, I think it was my friend, Mr. 

Woodall, who talked about not having a sense of the bias of the 

leadership of the CBO. And I will say that in the, I think, 6 years 

that your predecessor was here when I was on the Committee. I 

never for an instant had an idea of what his personal bias was. 

And I was pleased to find out after he left the position that he was 

pretty liberal. 

And I will say that I have never had one indication in listening 

to you and talking with you of what your personal bias may be, too. 

So, I salute that. This is a totally rhetorical question, but have you 

ever done an analysis of the cost per piece of legislation enacted? 

The CBO cost of a piece of legislation enacted? 

Mr. HALL. Yeah, we have not in large part, because it varies so 

much. It can be a piece of legislation changed in the name of a 

building or it can be something we worked on for 18 months. 

Mr. YARMUTH. Right, and just because Mr. Grothman asked the 

question, in this document that you provided, it says that in 2017, 

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you did 740 reports. Do you have any sense of how that has grown, 

maybe just within your tenure? 

Mr. HALL. Yeah, we are probably 100 or so above. And in some 

respects, it is a little misleading, because so much of our work is 

that technical assistance side that, you know, if we wrote down the 

instances of technical assistance, we are up to something like 

10,000 of those. So, to give you an idea. 

Mr. YARMUTH. A lot of work. I think it was Mr. Renacci asked 

you a question, and you were responding about—this is going back 

to the ACA—the situation with the exchanges, and you were cut 

off. Would you like to want to continue to make that? t was an explanation of what was happening in the exchanges and how that 

might relate to coverage and costs? 

Mr. HALL. Well, sure. Well, one of the points I certainly want to 

make is, while we wanted, of course, to get an estimate of the exchanges correct, more than that, we wanted to get the budget impact correct. And so, we have actually written a little piece that 

goes through how that worked out for us; you know, how accurate 

we were on the spending, on the subsidies, how accurate we were 

on the number of people who were uncovered, and including the exchanges. 

So, it is a bit more of a complete look of things. And then one 

of the real challenges, of course, especially with the ACA; implementation was such an important thing. And you know, we do 

what we can, but we really kind of wind up assuming that implementation is going to be about average, about the same as other 

piece of legislation; and that does not always happen. 

Mr. YARMUTH. I do not want to spend too much on healthcare, 

but I do want to ask one question. When we put together the ACA, 

one of the things that we focused on was making sure that preventive care was a significant part of the agenda, because we believed, 

those of us who were involved in that, that preventive care ultimately has a significant benefit on the budget in reducing longterm healthcare costs. Has the CBO, to your knowledge, ever done 

a score on the benefits of preventive care? 

Mr. HALL. Yeah, the one that had the clearest sort of result was 

from cigarette tax. And the cigarette tax, you know, there would 

be revenue generated from the tax. There would be increase of revenues from better health. That had a real impact. 

In terms of spending, it had sort of odd counter, right, because 

the cigarette tax would reduce the number of smokers and that 

would reduce Medicaid and Medicare spending, but then people 

would live longer. And that would increase government spending, 

because they are living longer. So, there was an odd thing there to 

sort of balance out the spending, which is an odd part of what we 

do, sometimes. 

Mr. YARMUTH. Right. But inside the budget window. 

Mr. HALL. Right. 

Mr. YARMUTH. You know, that is probably not going to be as 

great as an impact, I would not think. But, just in terms of pure 

preventive care, the ability to go and have checkups annually without any copays or so forth, has there ever been a score done on 

those types of initiatives? 

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Mr. HALL. Yeah, I can look see if we got some more examples. 

The tax was just really obvious. Sometimes, the preventative medicine stuff is hard because there is not as much evidence as we 

would like to sort of base the analysis on. 

Mr. YARMUTH. Right. Moving to another question, and I have 

talked about this in my contexts, but the idea that when CBO puts 

out a number, like 23 million, automatically, that gets used for our 

political purposes. But it gets kind of in concrete in the public’s 

mind. Has the CBO contemplated—and maybe this is a restriction 

we have put on you—that you could create a range of estimates so 

that, first of all, it would narrow your error rate? But also, it would 

not be something that people actually rely on for arguments, when 

in fact, nobody is ever going to be accurate exactly. And the range 

might be more useful. 

Mr. HALL. Well, my starting point is, it is a Budget Committee 

thing. The point estimate is used in enforcement. And so, the 

Budget Committee needs a point estimate. So, we try to characterize uncertainties best we can. And sometimes, we can put in 

ranges, but that is hard to do. To be honest, so much uncertain is 

unknown unknowns. 

Mr. YARMUTH. Could you walk through maybe some of the other 

requirements that are either in statute or otherwise that affect how 

you develop the baseline and score legislation relative to that baseline? 

Mr. HALL. Oh, yeah, there is quite a lot. You know, for example, 

how we treat Social Security trust fund and et cetera. We are directed to assume that that pays out, rather than the trust fund 

cuts off benefits. You know, when we forecast discretionary spending, we are not really forecasting it. We just put an inflation rate 

in and assume that. So, most of those little rules are directed either through law or through the Budget Committee. 

Mr. YARMUTH. So, that kind of goes to Mr. Brat’s comment about 

it is on us to actually deal with some of these. Just wanted to talk 

a little bit about something that I am obsessed with, and that is 

the pace of change in society and how that complicates a lot of policymaking, not to speak of your role. 

I remember when Secretary Geithner used to come before the 

Committee, and one time, I asked him, we were talking about 30- 

and 40-year projections. And I asked him how reliable he thought 

30- and 40-year projections were. And he said, ‘‘I do not think any 

projection outside of 5 years is reliable.’’ 

And the pace of change in the world has only quickened since 

then. And I was reading the other day an interview that was done 

with the managing director of Mercedes-Benz. And he had some 

unbelievably disruptive predictions about what was going to happen in various fields; transportation, energy, education, the legal 

profession, within the next 10 years. And they are things that, for 

instance, basically the cost of electricity because of the reduction in 

the cost of solar power going to virtually zero. That obviously has 

huge implications; the abolition of a huge percentage of the jobs 

that now exist. 

We know about the possibility of about 170,000 truck drivers losing their jobs imminently because of self-driving vehicles. A lot of 

these things are happening. My question is, is any of that done in 

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63 

the CBO? You do not have any futurists on staff, but that might 

be helpful. We need them in Congress, I know that. 

Mr. HALL. Actually, I rather like what we do. There are unknown 

unknowns, but we can look at things like productivity. Historically, 

productivity is ranged about 2 percentage points. You know, you go 

back and look at labor supply; how is that ranged historically? We 

can then put those into our long-term forecast, and we have a point 

estimate. 

Well then, we can vary those important variables by how they 

varied in the past and give you some idea of the direction we are 

heading. And of course, that does not tell you about the real 

outliers, but it does give you some idea of historically, how much 

variation we have had, and what does that mean for our forecast. 

Mr. YARMUTH. Great. Well, thank you once again for your work, 

your service, and your appearance here today. I yield back. 

Chairman WOMACK. Thank you, Mr. Yarmuth. I hope not to take 

all of my 10 minutes. I want to bring out a couple of questions. 

One: CBO has nine distinct divisions. When was the last time that 

there was any kind of a review of the organizational structure of 

CBO? And how often do you access the org structure, if you will, 

of the organization? 

Mr. HALL. I mean, we certainly think about it. We had a little 

turnover in the heads of those divisions. I think more than half of 

them have been replaced over the last 3 years because of retirements, and et cetera. And when that happens, we do think about 

do we have the right sort of organization, when you think about 

that. 

We have not given any real clear thought, frankly, because I 

think it works pretty well. We work in teams. You know, our budget analysts are separate from our program analysts, our program 

folks. A lot of what we try to focus on, more so I think than the 

organization, is trying to make sure that they coordinate better, 

they work better together. You know, sometimes our budget analysts are really different than our Ph.D. economists. And we need 

to make sure that they listen to each other, work together, because 

there is propensity for them to be apart. And that is probably a 

function of our organization. 

Chairman WOMACK. But you are not afraid to get outside the 

box? 

Mr. HALL. No, no. Not at all. 

Chairman WOMACK. Okay. Just a couple of words about Joint 

Committee on Taxation. And I realize you are on the floor, I guess, 

right above you and they are probably watching, so you have got 

to be careful with your answer. Do you have a really good relationship with them? Is it a good collaborative relationship with them? 

Mr. HALL. I think so. I think so. We have pretty distinct, clear 

roles. And they have been very patient about helping review some 

of our stuff, and we certainly work well together, I thought, 

through the healthcare, because all of those healthcare estimates 

fall the Joint Committee on Taxes. 

Chairman WOMACK. From time to time, because of the makeup 

of your organization, this goes back to my collaborative question. 

Are times when your folks in CBO might think differently about 

something come out of Joint Committee on Taxation? And are they 

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64 

free to exchange those ideas, in hopes of getting a little closer to 

the truth, as we all want to know? 

Mr. HALL. I think so. I think the biggest room for improvement, 

frankly, is that if we were a little bit more transparent with each 

other. You know, I do not think we know a ton about their model. 

I do not know if they know a ton about our model. But we do manage to work together. But I cannot think of instances where we did 

any sort of second-guessing on what they have done. 

Chairman WOMACK. And I do not want you to speak for Joint 

Committee on Tax, but since the passage of the tax cut and jobs 

act, there have been a number of companies and businesses, large 

and small, that have made significant decisions about how they are 

going to take this windfall, real or perceived, and how it is going 

to impact downstream to people that work for them with bonuses, 

raising minimum wages, imputing more resources into retirement 

plans, and those kind of things. 

I know there is expected to be some of that, but has the avalanche of this news coming out, has it surprised anybody in your 

organization, in Joint Committee on Tax? 

Mr. HALL. Yeah, yeah. I know we have had some discussions 

about it, you know, from our look at the forecast with the tax cut 

in it. We have done some going back and looking to see, now, how 

consistent is this with what we have seen with the initial reaction 

to the tax bill? I do not think we have anything that is been dramatically different than we expected. And hopefully, we will try to 

talk about some of that when we release our budget outlook. 

Chairman WOMACK. And to be respectful of your time, my last 

question is, the U.K. has, in their CBO equivalent, the Office of 

Budget Responsibility, has a process where they take certain policy 

issues and that they give some kind of a confidence factor to them, 

regarding the data that is used, regarding the modelling that is 

used, and regarding the behavioral aspect of it. And then they give 

kind of a final grade to that. 

Does CBO have something like that? I know you have spoken 

generally about how you look at your products from a confidence 

standpoint. But do you have anything that has a metric like that 

or a confidence factor built into it? And if you do not, have you considered using something like that and sharing that with the Congress? 

Mr. HALL. Yeah. You know, I mean, our confidence and our uncertainties is sort of mixed into our work, but that is an interesting 

idea. We have had some interactions with the British equivalent. 

I think it sounds like it would be worth our time to take a look at 

what they do and see if we can get some good ideas from them. If 

it is something that you all think is valuable, we would love to figure out how to do it. 

Chairman WOMACK. Very good. Dr. Hall, thank you for appearing before this Committee today. I want to advise members that 

you can submit written questions to be answered later in writing. 

Those questions and your answers will be made part of the formal 

hearing record. Any member who wishes to submit questions or 

any extraneous material for the record may do so within 7 days. 

And with that, this hearing stands adjourned. 

[Whereupon, at 12:32 p.m., the Committee was adjourned.] 

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House Budget Committee 

Chairman Womack 

CBO Oversight: Organizational and Operational Structure 

Questions for the Record 

1. Are there any functions that these divisions are not sufficiently equipped to handle now? 

2. How does CBO interact with the Joint Committee on Taxation? Which divisions are 

responsible for that interaction? 

3. How are conflicts and differing professional opinions across divisions managed? 

4. What are the challenges you have identified with the current structure ofthe agency? 

5. Does CBO conduct performance reviews? If so, how frequently? What metrics are used? 

6. Do current staffing levels contribute to delayed turn-around time on work products? 

7. Director Hail, your written testimony states that CBO has implemented more "teaming" 

arrangements to share work in certain high-demand areas. How are these teams structured 

to ensure efficiency and effectiveness? 

8. How and when does the agency decide whether to shift a junior analyst from one team to 

another? 

9. Are CBO's technical capabilities and tools all actually located in Ford or are they 

outsourced? 

10. What could CBO do better to streamline its procedures? 

II. Director Hall, you mentioned in your testimony CBO's desire to expand its ability to use 

more secure data on-site. What is CBO's current capacity to use secure data on-site? How 

does CBO use secure data when its storage capacity is constrained? 

12. How often is CBO precluded from incorporating secure data into its analysis because of 

capacity constraints? 

13. Director Hall, what percentage of your annual budget is used for the buying of data and 

research? 

14. Could you please explain in more detail what types of data and research CBO is 

purchasing and the sources? For example, is CBO directly contracting for research on 
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specific topics or instead purchasing the rights and access to high-quality, peer-reviewed 

research and data? 

15. Director Hall, your written testimony states that CBO has taken care to give more 

explanations of changes in written estimates and to document more of the agency's 

analytic methods over the past year. What feedback has CBO received from 

implementing these changes? 

16. In your judgment, are there ways in which CBO could be more transparent with 

Congress? In what areas can transparency be increased? 

17. A few dozen foreign countries have government fiscal agencies with roles similar to 

those of CBO. Have you explored their eff01ts at transparency and infom1ation 

accessibility? 

18. CBO' s cost estimates typically show only the changes in spending or revenue resulting 

from a reported bill; they do not show the baseline against which these changes are 

measured, or the net effect on total program spending if the legislation is enacted. Why 

does CBO present its cost estimates that way? 

19. There often is a trade-off between having the most technically informative products and 

having products that are easy to understand. How does CBO strike this balance? 

20. How does CBO decide to produce products that are not requested by Congress (e.g., blog 

posts, options book, and reports to the Congress on CBO's work)? 

21. Which colleges and universities do you recruit from? 

22. Are most of your staff recruited directly out of graduate school or do you recruit midcareer? 

23. How long do your analysts typically stay at CBO? 

24. Has you staffing kept pace with the number of estimates you are required to produce? 

25. As more legislative proposals are being considered on the floor without going through the 

committee process, how does that affect your ability to produce cost estimates? 

26. It seems strange that CBO & JCT have similar responsibilities but are structured very 

differently. Can you summarize the differences between how CBO and Joint Committee 

on Taxation are organized and governed? 

27. What do you think of proposals to combine the two institutions? 
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28. What criteria would you recommend Congress should use to judge CBO's performance? 
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Questions for the Record 

To: Keith Hall, Ph.D., Director, Congressional Budget Office 

From: Congressman Gary Palmer 

Date: January 31, 2018 

and Structure" 

Director Hall, as you know, CMS recently published guidance that provides new flexibility for states to 

create Medicaid work requirements. How would CBO assess the budgetary effects that result from this 

flexibility? 

I would like to formally request that your team produce an analysis that shows who might be subject to 

the work requirement by state. 

Additionally, I would like to request that CBO produce an analysis of different levels of a work 

requirement for Medicaid- with stricter and more relaxed requirements relative to what CBO believes 

will occur under the CMS guidance- and the budgetary effects of those scenarios, as well as who might 

be subject to the work requirement by state. 
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Answers to Questions for the Record Following a Hearing 

Conducted by the House Committee on the Budget on CBO Oversight: 

Organizational and Operational Structure 

On january 30, 2018, the House Committee on the Budget convened a hearing at which 

Keith Hall, Director of the Congressional Budget Office, testified about CBOs work in 2017 

and its fi.tture plans. 1 After the hearing, Chairman Womack and Congressman Palmer submitted 

questions for the record 7his document provides C'BO's answers. It is available at www.cbo.got!l 

publication/53863. 

Chairman Womack 

Question. Are there any functions that these divisions are not sufficiently equipped to handle 

now? 

Answer. CBO maintains a flat organizational structure char fosters collaboration and teamwork across and within divisions. For examp!c, the analytic reports produced by analysts in 

several divisions rely on the economic projections prepared by rhe Macroeconomic Analysis 

Division and on rhe cosr estimates and budget projections prepared by the Budget Analysis 

and Tax Analysis Divisions. Similarly, the budget projections and cost estimates prepared by 

the Budget Analysis and Tax Analysis Divisions draw on models and analyses produced by 

O(hcr divisions. The overall structure also allows for multiple levels of review by managers 

with a wide range of perspectives and expertise. 

Most ofCBO's 235 staff are economists or public policy analysts with advanced degrees, 

but the agency also employs lawyers, information technology specialists, editors, and people 

with other areas of expertise that contribute to the agency's mission. CBO's analysts have 

a broad range of skills and expertise and routinely seek input from outside experts to assist 

with and expedite their analyses. However, the Congress's increased interest in responsiveness 

and transparency has led the agency to request additional resources to hire more employees. 

Specifically, the agency has submitted a budget request to hire 10 new staff members in 2019, 

with the aim of hiring a total of20 new staff by 2021. The ultimate objective of increasing 

the number of staff members is to bolster the agency's responsiveness to the Congress and to 

enhance efforts to ensure transparency. 

1. Sec testimony of Keith Ha!l, Director, Congressional Budget Office, before the House Committee on the 

Budget, 7lu Congressional Budget Office's ~wk in 2017 and Plans for the Future (January 30, 2018), www.cbo. 

gov/publkation/5350 I. 
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Question. How does CBO interaC( with the Joint Committee on Taxation? Which divisions 

are responsible for that interaction? 

Answer. Many CBO staff members often work closely and collaboratively with the staff of 

the Joint Committee on Taxation (JCT). Consistent with the Congressional Budget Act of 

1974, CBO relies on estimates provided by ]CT when preparing cost estimates that reflect 

the effects of changes ro tax laws. JCT estimates the effects of such changes relative to CBO's 

baseline projections of tax receipts. To facilitate such analyses, CBO provides JCT derailed 

information about irs economic forecast and revenue projections. On topics such as health 

care, immigration, and housing finance, where legislative proposals often affect both tax 

receipts and spending programs, CBO and JCT work together to evaluate the impacts of the 

legislative changes. 

]CT also plays a key role in the preparation of other analysis produced by CBO. In particular, it provides estimates of the revenue effects of various alternative tax policies that are 

included in CBO's annual reports on the budget and economic oudook, as well as in the 

agency's budget options reports; and it provides estimates of the revenue effects of rhc tax 

proposals contained in CBO's analysis of the President's budget. 

Question. How are conflicts and differing professional opinions across divisions managed? 

Answer. CBO welcomes a wide range of views among its staff and encourages analysts 

involved in rhe preparation of cost estimates to express their opinions and offer suggestions. 

The agency is sensitive to falling into "group chink," so debate is encouraged. Within the 

time constraints facing CBO, staff members try to allow enough rime ro work through 

differing viewpoints abour approaches ro analyzing an issue. 

During discussions about scoring legislative proposals, all viewpoints are heard. Management 

does not make distinctions benveen junior or senior analysts or between analysts and managers. Everyone has a seat at the table, and everyone has an opportunity to have a say. Staff 

members generally strive to reach consensus and usually do, but ulcimarely it is the director 

who makes the final decision when differing viewpoints cannot be reconciled. 

Question. What are the cha.Henges you have identified with the current structure of the 

agency? 

Answer. In 2018 and 2019, CBO will continue to provide cost estimates and other analyses 

to assist the Congress in making policy decisions. To ensure that the agency is as responsive 

as possible, and in particular ro increase its capacity to accommodate surges in demand for 

cost estimates and other analyses, CBO has recently shifted some of its existing resources. 

For example, the agency has reorganized the way it approaches various topics: Teams have 

been expanded so that more people are prepared to contribute to the work in ccnain 

areas of interest, such as immigration, health insurance coverage, nutrition programs, and 

veterans' programs. In addition, CBO has become more efficient in reporting the effects of 

intergovernmental and private-sector mandates and in providing administrative assistance. 

Those efficiencies have allowed the agency to increase the number of employees who focus 

on the type of analysis that is in persistently high demand-specifically, that dealing with 

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HOUSE COMMI11'EE ON THE BUDGET 3 

appropriation bills and legislation affecting health insurance coverage, nutrition programs, 

and natura[ resources. Finally, an editor is now dedicated to assisting with cost estimates, 

giving analysts and managers more time for other, technical aspects of the work. 

Question. Does CBO conduct performance reviews? If so, how frequently? What metric.<; are 

used? 

Answer. CBO uses a formal, written appraisal process rhar is designed to assess employees' 

performance fairly and regularly (generally once per year). Formal appraisals identifY an 

employee's performance strengths and areas in need of improv::ment, establish performance 

goals for the upcoming year, and describe training and development that the employee 

should complete in the upcoming year. 'll1e appraisal is also used to evaluate how successful 

an employee has been in reaching goals established during the previous appraisal period. 

Managers use the following criteria to evaluate employees' performance in the formal 

appraisal: 

Quality of work, 

• Productivity and timeliness, 

• Initiative, 

• Written and oral communication skills, and 

• Effectiveness of working relationships. 

Those criteria are applied to the work of each division and to each position within the 

division. 

~e,appraisal pr~~~'des ea;~, empl~yee with an o~eral,~ perfo,rmance :~ring of either "outstandmg, very good, good, needs Improvement, or unsansfactory. 

Question. Do current staffing levels contribute to delayed turn-around time on work 

products? 

Answer. Despite its historically high productivity and dedicated staff, CBO expects that the 

number of cost estimates and other analyses the agency is able to produce will fall considerably short of the number of Congressional requests. ~Ihe demands on the agency remain 

intense. For example, the workload associated with the analysis of appropriations continues 

to be heavy, and the Congress remains acutely imercsted in analyses of the Affordable Care 

Act and numerous proposals for changes to that law, to Medicaid, and to the Children's 

Health Insurance Program, Other issues arise frequently and create a heavy demand for 

analysis; for example, over the past year, CBO analyzed legislative proposals related to immigration, veterans' health, water rights, opioid abuse, education, and nutrition. Analyzing 

proposals has strained the agency's resources in many areas. To help allocate resources, 

CBO regularly consults with committees and Congressional leadership to ensure rhat those 

resources are dedicated to the work thar is of highest priority to the Congress. 
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Question. Director Hall, your written testimony states that CBO has implemented more 

"teaming" arrangements to share work in ccnain high-demand areas. How are these teams 

structured to ensure efficiency and effectiveness? 

Answer. CBO has recently made greater use of teams to handle surges in demand for analysis 

of panicular issues, and rhe agency expects to rely on that approach more in the future. As 

part of that effort, CBO is expanding some analysts' areas of specialization to intentionally 

create a degree of overlap in expertise. Consequendy, more people arc being trained to 

contribute ro work in certain areas, such as immigration, health imurance coverage, nutrition 

programs, and veterans' programs. 

In many cases, teams with a broad range of skills are able ro share work on large and complicated proposals. However, smaller teams consisting of just a few people are somerimes 

brought together to work on projects; in such cases, the ability of analysts co coordinate their 

efforts quickly allows the agency co be more responsive ro the Congress. Teams often are 

cross-divisional, offering an excellent way for analysts in the agency's Budget Analysis and Tax 

Analysis Divisions ro work collaborativdy with analysts in other divisions. In addition, teams 

often consist of employees with a wide range of experience, from junior analysts to senior 

managers. 

Question. How and when does the agency decide whether to shift a junior analyst from one 

team to another? 

Answer. Analysts have experdse or specialized skills in specific areas. That is true for both 

junior and senior analysts. Nonetheless, CBO's staff sometimes shift from issue to issue in 

response to Congressional interest. Generally speaking, even when that occurs, staff members 

continue using their core skill sets. For example, some staff members are particularly adept at 

analyzing large data sets-a skill that is valuable across a wide range of analytical endeavors. 

Question. Are CBO's technical capabilities and tools all actually located in Ford or are they 

oursourced? 

Answer. CBO has partnered with other legislative branch agencies to share common services and contracts, such as those involving financial management support, auditing, and 

communications. CBO also coordinates with its sister agencies to obtain some training. 

During monthly or quarterly meetings with various legislative branch working groups-such 

as the Chief Administrative Officer Council, the Chicfinformation Officer Council, and 

the Financial Management Council-attendees explore ways to increase efficiencies. For 

example, many agencies within the legislative branch, including CBO, recently moved their 

financial management systems to "the cloud," which will be more economical. CBO also uses 

contracts negotiated by the Senate, the General Services Administration, and other agencies 

to obtain lower prices for goods and services. 

Every year, during rhe development of its budget, CBO scrutinizes its arrangements wirh 

contractors to ensure that requirements remain valid and that goods and services are purchased in the most economical manner possible. For example, in recent years, the agency has 

eliminated certain costs in library operations by canceling underused subscriptions-both in 

hard copy and online. It has further reduced costs by negotiating with vendors to obtain the 

lowest possible price for subscription renewals. And, a few years ago, CBO eliminared library 

cataloging services. In addition, instead of hiring permanent personnel for support services, 

the agency has contracted for administrative support during peak periods. 
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HOUSE COMMIITEF. ON THE BU>GET S 

Question. What could CBO do better to streamline its procedures? 

Answer. CBO has become more efficient in reporting rhe effects of intergovernmental and 

private-sector mandates and in providing administrative assistance within the agency, which 

has allowed it to increase the number of employees who contribute to analysis that is in 

persistently high demand-specifically, that related to appropriation bills and to legislation 

affecting health insurance coverage, nutrition programs, and natural resources. And an editor 

is now dedicated to assisting with cost estimates, giving analysts and managers more time for 

other, technical aspects of the work. In addition, CBO is working to better synchronize the 

transfer of information between irs macroeconomic models. The agency is also streamlining 

the production of PDF files of reports and the production of associated materials on CRO's 

website. 

Question. Director Hall, you mentioned in your testimony CBO's desire to expand irs 

ability to use more secure data on-site. What is CRO's current capacity to use secure data 

on-site? How does CBO use secure data when its storage capacity is constrained? 

Answer. When CRO receives data from any executive branch agency, it must provide the 

same level of confidentiality as that agency. CBO has pur in place strong electronic and 

physical security measures to protect health records, trade secrets, and ta.x and other financial 

informacion. However, to use certain clara, CBO currently must travel to the execurive 

branch agency that possesses the data. That process is cumbersome and inefficient. CBO 

could produce more analysis more quickly if it either had remote access to those data or 

could store them at the Ford House Office Building. 

Question. How often is CBO precluded from incorporating secure data into irs analysis 

because of capacity constraints? 

Answer. CBO is not precluded from incorporating secure data into its analyses. In some 

cases, however, CBO's employees must travel to executive branch agencies to use certain data. 

Although that process is cumbersome and inefficient, CBO's analysts take those steps when 

it is necessary to answer a question posed by the Congress. If CBO's employees could access 

those data remotely or store the data at the Ford House Office Building, they could devore 

more time to producing other analyses. 

Question. Director Hall, what percentage of your annual budget is used for the buying of 

data and research? 

Answer. CBO spends roughly 1 percent of its annual budget to purchase data. In addition, 

rhe agency receives free data from other government agencies. CBO has roughly 30 active 

data-use agreements with those government entities. Although CBO does nor contract 

for original research, rhe agency does engage consulranrs to provide insight into topics the 

agency is addressing. 

Question. Could you please explain in more detail what types of clara and research CBO is 

purchasing and the sources? For example, is CBO directly contracting for research on specific 

topics or insrcad purchasing the rights and access ro high-quality, peer-reviewed research and 

clara? 

Answer. CBO purchases economic data from sources that have produced, collected, and 

packaged ir for others' use. ~Those sources range from private companies to academic 
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institutions, as weH as other government agencies. In addition, although CRO does not 

contract for original research, the agency regularly consults with numerous outside expertsacademics, think tanks, industry groups, private-sector experts, federal agencies, and state 

and local governments-who represent a variety of perspectives. 

Question. Director Hall, your written testimony states that CBO has taken care to give more 

explanations of changes in written esrimates and to document more of the agency's analytic 

methods over the past year. What feedback has CBO received from implementing these 

changes? 

Answer. CBO has informally solicited feedback from Members of Congress, Congressional 

staff, and the broader community-including news organizations, academia, and think 

tanks-and it has been encouraging. In addition, CBO has solicited input, via a short 

website survey, from Congressional staff and others in recent years about the presentation of 

the agency's work. That feedback was constructive and positive. 

~Ibere arc many ways to be transparent. All of them can be useful, but each comes with a 

different cost. Over the coming year, as the agency tests diffCrem approaches to ensuring 

transparency, it hopes ro achieve a better understanding of the trade-offs associated with each 

approach. 

Question. In your judgment, are there ways in which CBO could be more transparent with 

Congress? In what areas can transparency be increased? 

Answer. CBO is working very hard to be more forthcoming and to release more information about its models and analytic methods to the Congress and the public. Nonetheless, 

being transparem has costs. The agency takes seriously its responsibility to produce reliable 

estimates and to be good stewards of public resources. CBO must, in essence, make business 

decisions that weigh the benefits and costs of devoting more resources to transparency. 

As parr of its ongoing efforts to ensure transparency, the agency has released new publications 

this year describing its processes for producing economic forecasts, budget baselines, and cost 

estimates. In addition, key staff members are making presentations ro Congressional staff 

about those processes. Efforts currently under way include the following: 

In updating its simulation model of health insurance coverage, CBO will get systematic 

feedback from the research community by making presentations about different aspects 

of the model as they are developed. The agency will publish conceptual overviews and 

documentation of all parts of the completed mode! as well as more derailed information 

about key aspects of the modeling-including computer code. 

• CBO will develop an interactive version of its model for projecting spending on discretionary programs. That interactive mode! will help researchers understand and replicate 

the methods that underlie roughly 40 percent of CBO's forma! cost estimates. 

• The agency will update elements of its long-term budget model and provide technical 

documentation and computer code explaining the updates. 

• The agency will explore ways to provide publicly more supporting documentation that 

describes the methods used in producing baseline projections and cost estimates. 

• CBO will provide information online that enables users to examine how a large variety of 

changes in baseline economic projections can affect projections of che federal budget. 

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HOCSE COMMITTEE 0~ THE BUDGET 7 ---~ -"" -" 

The agency will publish revised estimates of how certain changes to laws governing medical malpractice would affect medical spending, explaining the reasons behind revisions to 

the methodology used, documenting the model used to project how those changes to laws 

would affect medical costs, and making computer code for that model available. 

• CBO will post on its website a tool for examining the costs of different military force 

structures (with different numbers of fighter squadrons and ships, for instance). 

• The agency has released a working paper about CBO's model of the maximum sustainable output of the economy. 2 And, co help interested researchers replicate the agency's 

analytical results, it will release the computer code that generated the results discussed in 

that paper. 

Question. A few dozen foreign countries have government fiscal agencies with roles similar to 

those of CBO. Have you explored their efforts at transparency and information accessibility? 

Answer. CBO routinely explores how other agencies approach their work and reports the 

results of their analyses. In particular, CBO has shared ideas and experiences-pertaining 

both to transparency and to information accessibility-with staff at domestic and international agencies. For example, CBO sends a senior manager to the annual meeting of 

parliamentary budget officials, sponsored by the Organisarion for Economic Co-operation 

and Devclopmcm, where such topics are often a focus. As a result of those meetings, CBO 

has examined the approaches used by the United Kingdom's Office for Budget Responsibility 

to categorize the degree of uncertainty in their estimates, as well as approaches used by offices 

in New Zealand and Australia. As an example of such collaboration, Robert Chore, the 

Chairman of the U.K.'s Office for Budget Responsibility, visited CBO last year to discuss 

those issues. In addition, last fall, representatives of the Canadian Office of the Parliamentary 

Budget Officer visited CBO. And the agency has an ongoing relationship with Australia's 

Parliamentary Budget Office; for example, CBO has participated in two video conferences on 

issues of mutual interest, including the long-term budget outlook, uncertainty in esdmating, 

and dynamic scoring. Also, the agency has an ongoing relationship with the European 

Parliamentary Research Service. Finally, CBO has been looking into the online interactives used by other agencies to help users assess the budgetary effects of illustrative policy 

proposals. 

Question. CBO's cost estimates typically show only the changes in spending or revenue 

resulting from a reported bill; they do not show the baseline against which these changes are 

measured, or the net effect on total program spending if the legislation is enacted. Why does 

CBO present its cost estimates that way? 

Answer. For authorization bills-those that authorize spending that would be subject to 

subsequent appropriation-CEO's cost estimates compare a bill's estimated costs with what 

would be spent under current law if the bill was nor enacted. For virtually all discretionary 

programs, current law provides no funding after the current year. As a result, cost estimates 

show the effects on the budget relative to zero spending. A bill that would extend the authorization tOr an existing discretionary program would be shown as increasing spending subject 

to appropriation, even if the authorized funding was the same as the current year's appropriation. Similarly, a bill that would create a new program also would be shown as increasing 

2. See Robert ShaLkkton, l::,Stimating and Projecting Potential Output l}jfng CBOS .Forecasting Growth Model, 

Working Paper 2018-03 (Congressional Budget Office, February 2018), www.cbo.gov/publication/53558. 
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spending subject to appropriation. To the maximum extent possible, CBO provides information about the most recent appropriation provided for affected programs. 

For legislation that would affect mandatory (or direct) spending, CBO compares those 

estimated costs to the baseline, which also reflects current law (that is, the amount of 

spending that would occur for affected programs if the bill was not enacted). For mandatory 

programs, CBO provides, whenever possible, information abom baseline levels of spending 

in its description of the basis of the estimate. CBO has used that approach with the goal 

of providing information in the dearest way possible. Nonetheless, feedback about what 

additional information would be useful ro policymakers would influence how CBO describes 

such cost estimates in the future. 

In both cases, estimates show the incremental change to the baseline and the net effect on 

total program spending if the legislation was enacted. 

Question. There often is a trade-off between having the most technically informative products and having products that arc easy to understand. How does CBO strike this balance? 

Answer. CBO strives to be transparent, providing dear, concise explanations and detailing 

the key components of the basis of each analytical product. "Ihe overarching goal is to make 

information accessible by providing context, explaining technical terms, and effectively using 

tables and figures. CBO strives constantly to find more effective ways to be transparent. One 

approach that the agency has adopted is to provide technical appendixes, documentation of 

models, and other supplemental material along with its products. 

Question. How docs CBO decide to produce products that are not requested by Congress 

(e.g., blog posts, options boob, and reports to the Congress on CBO's work)? 

Answer. CBO's chief responsibility under the Congressional Budget Act of 1974 is ro help 

the House and Senate Budget Committees with matters under their jurisdiction. CBO 

also supports other Congressional committees-particularly the Appropriations, Ways and 

Means, and Finance Committees-and Congressional leadership. 

Every product CBO produces is requested by the Congress, is designed to help lawmakers 

understand products they have requested, or is created as part of a process that ensures CBO 

has the skills and expertise to produce such products. CBO produces a number of reports 

specified in statute, of which the best known is the annual Budget and Economic Outlook. 

Other CBO reports that are required by law or that are now produced regularly because of 

sustained interest from the Congress are described on CBO's website at vvww.cbo.gov/about/ 

products. 

In addition, CBO is required by law to produce a formal cost estimate for nearly every bill 

that is approved by a full committee of either the House or the Senate; the only exceptions 

are appropriation bills, which do not receive the same kind of formal written cost estimates 

but whose budgetary effects CBO estimates for the Appropriations Committees. CBO also 

produces formal cost estimates at other stages of the legislative process if requested to do so 

by a relevant committee or by Congressional leadership. Moreover, CBO produces informal 

cost estima(es for a much larger number oflegis!ative proposals~induding some that 

Congressional committees consider during the process of developing legislation and some 

that receive consideration at other stages of the legislative process. 

Beyond its regular reports and cost estimates, CBO prepares analytic reports at the request 

of Congressional leadership or of the Chairmen or Ranking Members of comminees or 
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HOUSE COMMITIEE 0!\ THE BCDGET 9 

subcommittees. CBO's managers and analysts work with requesters and rheir staffs to 

understand the scope and nature of the work that would be most useful to the Congress. 

Question. Which colleges and universities do you recruit from? 

Answer. In addition to many other sources, CBO recruits from colleges and universities 

across the country. The agency specifically reaches out to over 350 colleges and universities 

through irs contact management system. However, to more broadly promote job opportunities, CBO advertises open positions using systems such as USA Jobs, Handshake, and rhe 

American Economic Association Job Openings for Economists, which have access ro an even 

wider range of universities and therefore provide exposure w millions of students. Flhe agency 

currently has staff members on board whose final degrees came from more than 80 different 

universities. 

Question. Are most of your staff recruited directly out of graduate school or do you recruit 

mid-career? 

Answer. Recruitment strategies vary on the basis of the position CBO is seeking to fill and 

the skills and experience needed. TI1erefore, in hiring analysts, CBO seeks a mix of new 

graduates and midcareer professionals. In recent years, the mix has been approximately 

45 percent of analystS straight out of graduate programs and the remaining 55 percent with 

professional experience. Roughly 80 percent of the agency's staff have advanced degrees. As 

expected, the entry-level assistant analysts are mostly recruited straight out of undergraduate 

programs. Because of the agency's small staff size, it routinely seeks midcarcer professionals 

for other professional and administrative positions. 

Question. How long do your analysts typically sray at CBO? 

Answer. The average tenure for CBO analysts is just over 10 years. 

Question. Has your staffing kept pace with the number of estimates you are required to 

produce? 

Answer. CBO is grateful that the Congress has provided the resources and authorities needed 

w attract and retain highly educated and skilled employees. Even so, CBO's staffing levels 

have remained roughly the same over the years even as its workload has steadily increased. 

For example, the agency produced 485 formal cost estimates in 2012 and 740 formal cost 

estimates in 2017. In each of those years, CBO had roughly 235 employees. In addition, as 

legislation has grown more complex, CBO has found itself spending more time providing 

preliminary analyses and technical assistance when committees are drafting legislation. 

Question. As more legislative proposals are being considered on the floor without going 

through the committee process, how does that affect your ability to produce cost estimates? 

Answer. When bills go straight to the floor without going through committee markup, 

CBO usually has time to provide only informal feedback on the bill's potential impacts on 

mandatory spending and revenues (what are known as PAYGO effects). CBO provides that 

information to the Budget Committees, the Rules Committee, the Majority Leader's office, 

and rhe bill's sponsor. 
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CBO is generally notified at the end of each week about bills that will be considered in the 

following week on the floor under suspension of the rules (the procedure generally used on 

the House floor to act expeditiously on legislation) or that will be taken up by the Rules 

Committee. If those bills are ordered reported by an authorizing committee, CBO can often 

finish and provide a formal written estimate for the legislation before the bill is considered 

on the floor. But if the agency is not already working on the bill, it usually does nor have the 

time to complete a formal estimate before floor consideration. Still, CBO endeavors to be 

helpful to the Congress by providing as much infOrmation as possible to assist with budget 

enforcement. 

Question. It seems strange that CBO and JCT have similar responsibilities but are strltctured very differently. Can you summarize the differences between how CBO and the 

Joint Committee on Taxation are organized and governed? 

Answer. Both CBO and the staff of the Joint Committee on Taxation provide the Congress 

with independent, objective information and analyses. And both organizations rely on 

experienced, nonpan:isan professional staff who assist Members of the majoriry and minority 

parties in both Houses of Congress. One critical diffCrence between the two agencies is that 

JCT focuses specifically on tax legislation, whereas CBO focuses on a much broader set of 

topics, ranging from health care to national security. Although both agencies provide support 

and analysis to leadership and Members of Congress developing active legislation, JCT 

was established primarily to be a resource for the House Committee on Ways and Means 

and the Senate Committee on Finance. By contrast, CBO was established to be a resource 

for all committees-primarily the Budget Committees, but orhers as well, including the 

Appropriations, Ways and Means, and Finance Committees. 

Responsibilities 1tnd Products. Although the responsibilities of the rwo agencies are similar in 

that each provides information abour the cosrs-and often other effects-of proposed legislation, there is a dear division of responsibility benveen them. Consistent with JCT's original 

charter, and as reaffirmed in the Congressional Budget Act of 1974, the staff ofJCT is specifically tasked with estimating the budgetary effects of tax legislation. By contrast, under the 

Congressional Budget Act, CBO has the responsibiliry of estimating the budgetary effects of 

all other legislation. In addition to estimating costs and the distribution of tax burdens, and 

providing other economic analysis, the staff ofJCT has the following responsibilities: providing legal analysis of issues in tax law; assisting in che development of legislative language 

for changes to the Internal Revenue Code; providing technical advice at committee hearings 

and markups; assisting the House Committee on Ways and Means, the Senate Committee on 

Finance, and conference committees in the production of the legislative histories (committee 

reports) that accompany the legislation; and providing oversight of the administration of the 

Internal Revenue Code, including, in particular, reviewing all large proposed tax refunds. The 

Joint Committee staff regularly publishes economic and legal analyses related to the topics of 

hearings held by the House Commirree on Ways and Means and the Senate Committee on 

Finance and reviews tax treaties for the Senate Foreign Relations Committee. In addition the 

Joint Committee staff publishes material describing its economic modeling. 

CBO's responsibilities arc broader. As detailed on the agency's website, at www.cbo.gov/ 

about/products, CBO regularly publishes baseline projections of budgetary and economic 

outcomes that are based on the assumption that current laws regarding federal spending 

and revenues will generally remain in place. CBO provides formal, written estimates of the 

cost of virtually every bill approved by Congressional committees. {As discussed above, for 

legislation related to the Internal Revenue Code, CBO uses estimates provided by the staff of 
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BOESE COMMITTEE 0~ THE BCIX;ET 11 

rhe Joint Committee on 1:-u:ation.) In addition to formal, written estimates for bills approved 

by committees, CBO provides technical assistance as committees are considering what 

legislation to advance, as amendments to legislation are being debated, and at other stages in 

the legislative process. CBO issues a monthly analysis of federal spending and revenue totals 

for the previous month and the fiscal year to date. Periodically, CBO produces a reference 

volume examining numerous options for reducing budget deficits. 1he volume includes a 

wide range of options, derived from many sources, for reducing spending or increasing revenues. For each option, CBO presents an estimate of its effects on the budget and a discussion 

of its benefits and drawbacks but makes no recommendations. 

CBO also prepares analytic reports that examine particular federal spending programs, 

aspects of the tax code, and budgetary and economic challenges. The reports cover many 

areas of federal policy, including health care, economic growth, social insurance, income 

security, taxes, energy, the environment, national security, financial issues, education, 

infrastructure, and more. In addition, CBO produces working papers that provide technical 

descriptions of the agency's official analyses and that represent independent research conducted by CBO's analysts. l11rough those papers, CBO aims to enhance the transparency of 

its work and ro encourage external review of that work. Finally, to provide more detail about 

CBO's budget and economic projections and to add to the transparency of CBO's other 

analyses, the agency posts a considerable quantiry of data and od1er redmical information on 

its website. 

Organizational Structure. Differences in the two agencies' structure largely reflect their different histories and the needs of the primary diems for their analyses. The Joint Committee 

on Taxation is a nonpartisan committee of the United States Congress, originally established 

under the Revenue Act of 1926. By custom, the Joint Committee is chaired on a rotating 

basis by the Chairman of the Senate Finance Committee and the Chairman of the House 

Ways and Means Commitrcc. During the first session of each Congress, the House has the 

Chair and the Senate has the vice-chair; during the second session, the roles are reversed. 

Also by custom, the responsibility for nominating a Chief of Staff rotates between the Chairs 

of the House Committee on Ways and Means and the Senate Committee on Finance, and 

consent of the nonnominating chair is obtained. There is not a fixed term of service for JCT's 

Chief of Staff. He or she serves at the pleasure of the Joint Committee members. Like CBO's 

staff, the staff of JCT is professional, highly skilled analytically, and nonpartisan. Because 

JCTwas established to serve Members with issues of federal raxation, most of its work is 

undertaken for Members of the two tax-writing committees. Nevertheless, the staff of JCT 

serves all Members of Congress as an independent resource on issues related to tax policy, 

and the agency undenakes a significant amount of work for Members not on the House 

Ways and Means Committee or the Senate Finance Committee. In addition to work for 

individual Members, the staff of JCT devotes a significant amount of time to requests from 

House and Senate leadership, the House and Senate Budget Committees, and the Senate 

Foreign Relations Committee. 

CBO was established under the Congressional Budget Act of 1974. Although CBO's primary 

duty and function is to help the Budget Committees with matters under their jurisdiction, 

CBO was established as an independent office to be a resource for ali committees-including 

particularly the Appropriations, Ways and Means, and Finance Committees-and the 

leadership. The Speaker of the House of Representatives and the president pro tempore of 

the Senate jointly appoint the Director of the Congressional Budget Office after considering 

recommendations from the two Budget Committees. Directors arc appointed for four-year 

terms, and they may be reappointed to the position; in addition, a Director serving at the 
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expiration of a term may continue to serve umil his or her successor is appointed. The 

Congressional Budget Act of 1974 specifies that CBO's Director is to be chosen without 

regard to political affiliation and that all personnel of the office are to be appointed without 

regard ro political affiliation and soJely on the basis of their fitness to perform their duties. 

CBO has an organizational structure that reflects the diversity of the topics that it needs to 

address. Specifically, CBO consists of eight divisions. The vast majority of personnel at CBO 

hold advanced degrees in economics or public policy and administra(ion. 

• The Budget Analysis Division produces baseline projections of federal spending, formal 

cost estimates for legislation approved by Congressional committees, and technical 

assistance for thousands of proposals that committees are considering. 

• 1l1e Financial Analysis Division produces polic..)' analyses focused on the financial commitments of the federal government and provides support throughout CBO for financial 

valuation and modeling and for projections of financial variables. 

• The Health, Retirement, and Long-Term Analysis Division analyzes a range of federal 

programs and policies that include Medicare, Medicaid, subsidies provided through 

health insurance exchanges, and Social Security. 1he division is also responsible for CBO's 

long-term budget projections and collaborates on analyses of the long-term effects of 

proposed legislation. 

The Macroeconomic Analysis Division generates CBO's economic projections, which 

underlie the agency's budget projections. In addition, the division analyzes the short-term 

and longer-term effects on the overall economy of some proposed changes in federal tax 

and spending policies. 

The Microeconomic Studies Division analyzes federal programs related to education 

and income security; federal investment in physical infrastructure such as highways; and 

federal policy related to energy, natural resources, climate, and the environment. 

• The National Security Division analyzes policy issues related to the defense budget, 

veterans' affairs, and homeland security. 

The Tax Analysis Division produces baseline projections of federal revenues (from individual income raxes, payroll taxes, corporate income raxes, and other sources) and formal 

cost estimates for legislation that changes revenues other than those that modifY rax law. 

The division also analyzes the distribution of federal taxes and spending, and it examines 

how possible changes in tax law would affect the behavior of taxpayers and the overaH 

economy. 

• The Management, Business, and Information Services Division provides administrative 

and support services (ranging from information technology to editing) for CBO. 

The staff of the Joint Comminee on Taxation is smaller than rhar of CBO, approximately 

one-quarter the size, and its simpler organizational structure is a function of both its size 

and its mission. Roughly half of JCT's professional staff is composed of tax attorneys and 

accounrants, and half consists of economists. Each staff member specializes in specific areas 

of the Internal Revenue Code, and lawyers, accountants, and economists work in fluid teams 

when analyzing tax legislation. Because tax legislation is often designed with the intent 

of providing incentives that would affect economic growth, one of the economic areas of 

specialization among JCT's staff is the macroeconomic analysis of tax policy. Since 1995, 

JCT's macroeconomisrs have developed enhanced tax sectors within macroeconomic models 

for the purpose of analyzing such effects. 
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!lOUSE CQ!'\.1MITTEE ON THE BeD(iET 13 

Question. What do you think of proposals to combine the two institutions? 

Answer. The two agencies have separate mandates. One crucial difference between the two 

agencies is that JCT focuses solely on tax legislation, whereas CBO focuses on a much 

broader set of issues, ranging from health care to national security. Although both agencies 

provide support and analysis to leadership and Members of Congress developing active 

legislation, JCT mainly assists the House Committee on Ways and Means and the Senate 

Committee on Finance. CBO, by contrast. was established to be a resource for all committees-primarily the Budget Committees, but others as well, including the Appropriations, 

Ways and Means, and Finance Committees. 

In fulfilling their separate mandates, the two agencies arc able to meet the needs of the 

Congress in ways that mesh very welL For example, CBO relies on estimates provided by 

JCT when preparing cost estimates that reflect the effects of changes ro tax laws, and JCT 

estimates the effects of such changes relative to CBO's baseline projections of tax receipts. 

When there is overlap in the agencies' analysis-for instance, when legislation affects borh 

spending and tax policies in interrelated ways-the agencies generally produce joint cost 

estimates. Although the two agencies have distinct responsibilities, there is some overlap in 

expertise, which allows them to share insights about each other's analyses. That collaboration 

is facilitated by the two agencies' physical proximity: Since 2015, most of the staff ofJCT are 

located just one floor away from CBO in the Ford House Office Building. 

However, creation of a single, larger entity could lead ro the loss of the dexterity with which 

both agencies address Members' questions during the kgislative proce~s. The current separation yields some advantages that would be lost if the agencies were combined. For example, 

staff members at CBO must collectively possess wide-ranging expertise on a variety of 

issues related to fiscal and economic policy. Issues that CBO's staff must analyze range from 

health care to national security, labor, transportation, education, energy, Social Security, and 

macroeconomics. And CBO has to provide cost estimates to all Congressional committees, 

with the Budget Committees being the highest priority. 

Tn contrast, the staff ofJCT has deep expertise on a set of issues specifically related to tax 

policy. Unlike CBO's staff: nearly half of JCT's professional staff is composed of tax attorneys 

and accountants. As ]CT states on its website, "The complexity of the tax laws places a high 

premium on objective technical advice. Because the Joint Committee is devoted solely to 

tax issues, its focus on fulfilling its staturory mandate is undiluted by the need to respond 

to other legislative pressures." 3 The complexity of the Imernal Revenue Code-and the 

incentives it provides to individuals and businesses to discover legal avenues to reduce their 

tax burden-often requires that legal and accounting expertise, as well as economic analysis, 

be applied to the analysis of proposed tax legislation. Lawyers, accountants, and economists 

work with Members' staff and rhe staff of the House Committee on Ways and Means and 

of the Senate Committee on Finance to ensure that, to the greatest extent possible, the 

proposed statutory language accomplishes what is intended. 

Also, the staff of]CT is closely involved in every aspect of the tax legislative process, in ways 

that CBO's staff is not. Among other things, the staff of JCT prepares hearing pamphlets, 

committee reports, and conference reports (statements of managers); assists in the drafting 

of statutory language; assists the Ways and Means and Finance Committees in their preparations for markups and during the markups themselves; assists Members of Congress in 

3. See www.jct.gov/about-us/mandate.html. 
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addressing constituent issues and problems; reviews proposed large income tax refunds; and 

initiates investigations of various aspects of the federal tax system. Indeed, because JCT's 

mission is to assist Members in ways beyond the provision of revenue analysis and economic 

reports, only approximately half ofJCT's professional staffis involved in economic modeling 

and revenue estimating. For chat reason, JCT employs experienced tax attorneys and accountants in addition to economists. 

Question. What criteria would you recommend Congress should use co judge CBO's 

performance? 

Answer. CBO's mission is co serve the Congress. CBO primarily acts as a resource for the 

Budget Committees in order to support the budget process. More broadly, CBO's mission 

is to help the Congress make effective budget and economic policy. As the needs of the 

Congress evolve, the criteria by which CBO is judged evolve as well. Given CBO's current 

responsibilities, the Congress could consider judging the agency on whether its analysis, and 

the presentation of that analysis, is: 

• Objective-representing not the personal opinions of CBO's staff but both the consensus 

and the diversity of views among experts from around the country; 

• Insightful-applying the best new evidence and innovative ideas as well as the lessons of 

experience; 

Timely-responding as quickly as possible to the needs of the Congress; and 

Transparent and clearly explained-so that the underlying analysis is accessible (that is, 

explained in detail but with minimal use of jargon and technical language), enabling 

policymakers to understand the basis for the agency's findings and have the opportunity 

to question the analysis and methods used. 

Precision, accuracy, completeness, and consistency are other important criteria. Because 

of the significant impact that CBO's work can have on the legislative process, precisionensuring that rhe written words mean exactly what the agency intends and cannot easily be 

misinterpreted-is important. CBO's analysts pursue high quality and accuracy, with the 

goal of producing estimates that arc: in the middle of the distribution of pmential outcomes. 

When possible, the agenc-y compares its estimates to other experts' analyses. In addition, 

CBO regularly compares irs estimates with actual outcomes, when available, to improve 

estimating methods. GOrnpleteness is also essentiaL In its reports, CBO cries to cover all of rhc 

important issues related ro any particular topic and to explain and address the uncertainty 

inherent in projections of future outcomes. And ensuring consistency among products and 

over time--both in the underlying analysis and in its presentation-is critical to the credibility of CBO's work. For bodies of work on any number of topics, the agency attempts to 

identify and explain key changes in its findings and approaches that occur over time. 
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HOLISE COMMITIEE Oi\ THE BCOGF.T 15 ---- -~-

Congressman Palmer 

Question. Director Hall, as you know, CMS recently published guidance that provides 

new flexibility for states to create Medicaid work requirements. How would CBO assess the 

budgetary effects that result from this flexibility? I would like to formally request that your 

team produce an analysis that shows who might be subject to the work requirement by state. 

Additionally, I would like to request that CBO produce an analysis of different levels of a 

work requirement for Medicaid~with stricter and more relaxed requirements relative to 

what CBO believes will occur under the CMS guidance-and the budgetary effects of those 

scenarios, as well as who might be subject to the work requirement by state. 

Answer. CBO expects that work requirements would reduce enrollment in Medicaid among 

people who were eligible for the program before implementation of those requirements and 

reduce fi.:deral costs of the program for those people. Earlier this year, four states received 

waivers to federal rules so that they could include such work requirements for some aduhs 

when determining eligibility for Medicaid, and eight other states have such waivers pending. 

The additional flexibility for states to create work requirements for Medicaid also tends to 

encourage the expansion of eligibiliry for the program in the future to people who are not 

currently eligible. However, enrollment in those states among people who became newly 

eligible because of the expansion would be lower than it otherwise would be if those states 

chose to adopt the expansion and not apply work requirements. 

CBO's baseline projections of federal spending for Medicaid incorporate the effects of 

waivers~including work requirements-along with many other factors. The agency is closely 

monitoring the waiver application process to learn more about potential exemption criteria 

and documentation requirements, qualHJing work activities, criteria for suspending eligibility 

when enrollees do not demonstrate that they are meeting the requirements, and other key 

derails. Besides allowing work requirements, the waivers could substantially change Medicaid 

enrollment in other ways, such as allowing disenrollment and lock~out periods if beneficiaries 

failed to pay premiums. CBO is analyzing the potential effects of those other changes and 

their interaction with work requirements. 

CBO is in the process of consulting with the Budget Committees, the committees with 

jurisdiction over Medicaid, and Congressional Jeadership to learn about their priorities to 

determine what work to rum to next. The extent to which the agency is able to provide 

additional analyses of work requirements will depend on how that work would fir with those 

priori des.