On January 24, Rep. Warren Davidson (R-OH) re-introduced the CBO Show Your Work Act (H.R. 724). This legislation aims to enhance transparency and openness at the Congressional Budget Office (CBO), the nation’s official fiscal scorekeeper. The proposed bill would require the CBO to make publicly available its methodology, data preparation, variables, and underlying assumptions used to produce fiscal and social estimates for the nearly 700 pieces of legislation it scores in a given year.
As an independent agency of the legislative branch, CBO plays a critical role in helping Congress exercise its “power of the purse” by providing non-partisan cost analyses. However, like any institution, CBO is not immune to mistakes. A prominent example of this occurred during the legislative effort to repeal and replace the Affordable Care Act (ACA) in 2017.
The ACA imposed individual mandate, enforced as a tax penalty, on those without health insurance to encourage younger, healthier individuals to enroll. Since 2009, CBO’s estimates assumed the mandate would significantly boost enrollment, but real-world data proved otherwise. For instance, CBO projected 21 million enrollees in the exchanges by 2016, but actual enrollment was only 12.7 million. Despite this discrepancy, CBO did not update its assumptions on the mandate’s effectiveness when Republicans sought to repeal and replace the ACA. Even though the mandate failed to drive enrollment as expected, CBO continued to estimate that its repeal would lead to a drastic rise in the uninsured.
That issue has fueled a concerted push for greater transparency of CBO’s methods and assumptions. Under the leadership of CBO Director Philip Swagel, building on the work of his predecessor Keith Hall, the agency has shed more light on its processes and methodologies. Transparency initiatives have included:
Enhanced Methodological Transparency: The CBO has published detailed explanations of its analytical methods, allowing stakeholders to better understand the assumptions and processes behind its budgetary projections.
Data Accessibility: While there are some privacy and proprietary restrictions on what CBO can share, the agency has made its data more accessible by releasing spreadsheets and other supporting materials, enabling external analysts to replicate and scrutinize CBO’s work.
Highlighting Uncertainty: Previously, CBO buried discussions of uncertainty deep in the explanatory text of cost estimates. Now, they are summarized on the front page of its reports, just below the tables showing top-line budgetary impacts. This reform helps lawmakers and the public more easily understand factors that could lead to different budgetary outcomes.
Transparency Reports: CBO provides an annual report to Congress detailing its transparency initiatives from the past year and its plans for the next year. The next report will be published in April.
While Director Swagel has shown a willingness to engage with members of Congress and outside stakeholders to discuss CBO’s work and ways to improve its analysis, the CBO Show Your Work Act would help ensure that this emphasis on transparency continues. Greater access to CBO’s data and models would allow outside experts to evaluate the agency’s assumptions, test its methodologies, and offer independent assessments of its projections. This would not only enhance accountability, but would also strengthen the overall quality of fiscal policymaking by fostering a more open and informed debate.
Rep. Davidson’s CBO Show Your Work Act is common sense and would promote a more open and accountable relationship between CBO and Congress. Greater transparency will improve the quality of fiscal policymaking, not just for today’s lawmakers, but for future generations.