What does the Congressional Budget Office do? (with Philip Joyce)
What does the Congressional Budget Office do? (with Philip Joyce)  
Podcast: Understanding Congress
Published On: Mon Apr 04 2022
Description: The topic of this episode is, “What does the Congressional Budget Office do?”My guest is Professor Philip Joyce. He is the senior associate dean at the University of Maryland School of Public Policy, where he also is a professor of public policy. There, Philip Joyce teaches and researches public budgeting, performance measurement, and intergovernmental relations. He's the author of many publications — far too many to recite, but I will mention one that is germane to today's podcast. Phil is the author of the book The Congressional Budget Office: Honest Numbers, Power, and Policymaking (2011), which makes him an ideal guest to answer the question, “What does the Congressional Budget Office do?”Kevin Kosar:Welcome to Understanding Congress, a podcast about the first branch of government. Congress is a notoriously complex institution, and few Americans think well of it, but Congress is essential to our republic. It’s a place where our pluralistic society is supposed to work out its differences and come to agreement about what our laws should be. And that is why we are here: to discuss our national legislature and to think about ways to upgrade it so it can better serve our nation.I’m your host, Kevin Kosar, and I’m a resident scholar at the American Enterprise Institute, a think tank in Washington, DC.Professor Joyce, welcome to the podcast.Philip Joyce:It's great to be with you.Kevin Kosar:Let's start simply. The Congressional Budget Office, AKA, “CBO.” When did Congress create it and why?Philip Joyce:CBO was created in 1974. You have to sort of go back in time if you can. Well, probably a lot of people can't go back that far in time that are listening to this podcast, but I can. As you recall, in 1974, at least early 1974, Richard Nixon was president. There was something that became referred to as the imperial presidency, and it essentially involved President Nixon being viewed at least by many people in the Congress as overstepping his bounds, doing things like withholding funds that the Congress had appropriated. So the Congress was trying to reassert its role in the budget process. And it did this by passing something called the Congressional Budget and Empowerment Control Act of 1974, which did basically three things. It created the budget committees; it created the budget resolution, which is the blueprint that the Congress establishes for the budget; and it created CBO. Why did it create CBO? It created CBO in particular to provide the Congress with its own source of information on the budget and the economy. And why did it need to do that? Because the alternative was to rely on the Office of Management and Budget, which was attached to the president — and not just any president, but Richard Nixon. So the idea that the Congress was going to reassert its role in budgeting, but have to rely on Richard Nixon's OMB for information, just didn't make a lot of sense to a lot of people in the Congress. The other thing I think it's important to note up front is that according to the law, this was all to be done on a nonpartisan basis, which means that CBO doesn't work for the party in control of the Congress. It works for the Congress as a whole, and tries very hard to make sure that it is responsive to both political parties.Kevin Kosar:Yes, I should elaborate a touch further for listeners who are not familiar with this period of time, the early ’70s. After being pushed around and eclipsed by a burgeoning executive branch, one that often didn't play straight and sometimes transcended the law in its activities, Congress decided to reassert itself. It took the Legislative Reference Service and beefed it up into the Congressional Research Service. They created the Office of Technology Assessment. It wrote a new law on budgeting, and of course it created Congressional Budget Office, all as part of a means for it to reassert itself as the first branch.Now, you started to mention the nature of the agency as nonpartisan, which leads to the next question: The people who work at CBO, are they civil servants or political appointees, or do you have some of both?Philip Joyce:Well, this is really an interesting question, because they are not technically civil servants. In fact, this makes them different from many of the employees of the Government Accountability Office, who are actually federal civil servants. The way I describe CBO staff is that CBO staff are to the CBO director as congressional staff are to a member of Congress or a congressional committee. That is, the director of CBO is actually appointed by the Congress. The director of CBO has the power to hire and fire all CBO staff. So, theoretically, a new director of CBO could come in and wipe out the whole place and start over. Now, nobody has ever done that, because it's not in their interest to do that, because you'd be losing a lot of institutional knowledge. But the fact is, they are not technically civil servants. They have their own personnel system. But they very much behave as nonpartisan civil servants would behave. So I would say in that sense, you can think of them as being the equivalent of civil servants, but they're not technically civil servants. Now, in terms of where they come from, it depends on where you look in CBO. I think there is an impression that CBO must be chock-full of economists, and that there's nobody else but economists in CBO. But that's not really true. It depends on where you look in CBO. The directors of CBO — there have been 10 of them — have almost exclusively been economists. Many of the people in CBO's policy divisions — these are divisions that are organized around long-term economic and budget issues — are PhD economists. But on the other hand, the Budget Analysis Division (and we'll talk more I think in a little while about what they do), which is the largest in CBO and the main division supporting the annual budget process — that's mostly made up of staff who have master's degrees in fields like public policy or public administration, or sometimes are people that have significant experience in the executive branch and then move to CBO.Kevin Kosar:Just to paint a contrast for our listeners, when you think about the individuals who staff, say, an individual member of the House of Representatives' personal office, those are folks who frequently get their jobs because they are members of the political party, and they are individuals who've worked on that member's campaign or perhaps worked in other congressional offices — frequently for a member of the same party. So their skillsets are much more in the political realm. CBO, that's not the basis for hiring people there, whether you are good at politics, right?Philip Joyce:Yeah, that's right. Well, not only that, it's probably a detriment if you're really good at politics. Or, I would say, to put it differently, if you have a sort of strong political bent — CBO is not the place to go if you're a policy advocate, because you're not really there to advocate policy. You're really there to think objectively about what the effects of policy are. As you know, I wrote a book on CBO, and one of the interesting things that I found was that early on, when Alice Rivlin, who was the first director, who is a giant of public service, was setting the place up — and I think the way the place behaves today is very much still in her image — they had to make a decision early on: Were they going to accept references from members of Congress for CBO staff? Were they going to accept members of Congress basically saying, There's this great guy in my district or this great woman in my district, I think you should hire them? They decided that they were not going to refuse to accept those, but they also were not going to be driven by them. They wanted to communicate very clearly to the Congress that they got to decide who worked at CBO based on merit and qualifications, not based on whether they happen to be attached to some important member of Congress or not.Kevin Kosar:Yeah. I think that was a really prescient, smart insight by Alice Rivlin, because ultimately CBO is funded by Congress. And if the impression spreads in Congress that it's basically a tool of the majority, well, that pretty much throws into doubt anything that CBO publishes, and invites retribution. And I should add as little footnote, in the early 1990s, there was an accusation leveled at the Government Accountability Office, the General Accounting Office, that it was too close to the majority. The majority had long been Democrats. And when Republicans took the majority in 1994, GAO suffered a 25% budget cut. So, again, that was a very smart, foresighted move by Alice Rivlin.Now, let’s get down to the nitty gritty. How does CBO interface with Congress and the budget process? What is its role or roles?Philip Joyce:Well, there are three main things I would point to. The first is that twice a year, CBO does a baseline economic and budget forecast. And what is that? It's a projection of what would...