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Public Statements

CBO Transparency Act

Floor Speech

Location: Washington, DC

Mr. MURPHY of Pennsylvania. Remember back in school when your math teacher expected you to show your work when solving a problem? It made sense. A number on a page, even if it was the correct answer, didn't suffice because your teacher wanted you to demonstrate you knew how to solve the problem. There, the outcome was a grade on a quiz or a test. But what about when we're talking about hundreds of billions or trillions of dollars? Why is it we take on blind faith the cost estimates produced by one of the most influential accounting firms in the United States, the Congressional Budget Office.

In 1974, the Congressional Budget Office, or CBO, was formed to give Congress independent, nonpartisan, objective analysis of legislation. In addition, the CBO is required by law to produce a cost estimate--or ``score''--for every bill coming out of committee of either Chamber of Congress. It sounds good in theory, but the problem is no one knows how CBO arrives at their numbers--and they won't tell us. They don't have to. CBO is not required to ``show their work,'' like we were required in school, when announcing economic impact results.

Members of Congress rely on the CBO score. A favorable or a budget-neutral score makes a difference for a bill's success or failure. If there are savings, chances are better that the bill will get a vote on the floor. If it's budget-neutral, it may still get a vote. But what happens if the analysis was wrong and turns out to lead to big deficits, or what if Congress failed to call up a bill for a vote because CBO scored it as deficit spending when really it could lead to substantial savings?

The price of an inaccurate estimate right now is extremely high. Our national debt is closing in on $16 trillion. Major safety net programs like Medicare and Medicaid are heading for bankruptcy. Congress has to act to bring our country back from the brink of a fiscal cliff. It is crucial for policymakers to have all available information about the true cost of legislation. And that's why I introduced H.R. 6136, the CBO Transparency Act, so lawmakers and the public have an opportunity to review CBO's work.

Today, you can access information on hospital visits, crop yields, and air quality levels, which are used to produce major regulation by the EPA and others. But you can't find out how the CBO scored things. Like any scientific study, opening up the details of a CBO analysis for greater inspection and peer review will enable us to better understand how decisions are made.

This bill isn't about pointing out inaccuracies in CBO's estimates. What we're doing here is using transparency to enhance the credibility of the Congressional Budget Office. Once the information is out there, it can be reviewed by Congress and all Americans. Is the information correct? Do they consider all the facts? Was something left out? Was their analysis done right?

In 2009, a University of Chicago researcher revealed a CBO office had grossly underestimated potential savings from changes to Medicare and Medicaid. For instance, CBO overestimated the cost of Medicare part D by 40 percent. In the 1980s, CBO predicted spending on hospitals stays under new law would be $19 million more expensive than the actual cost. Congress changed Medicare to pay hospitals a fixed amount per admission. This encouraged shorter stays, led to fewer diagnostic services, and lowered administrative costs. But CBO didn't predict that, and by 1986 actual spending for hospital payments was 18 percent lower than estimated.

The CBO also estimated that if hospitals reported infection rates, it would cost about $30 million over 5 years. It turns out when they report infection rates, they pay attention to it. And the savings has been billions of dollars over 5 years and tens of thousands of lives. When the CBO says the stimulus saved 3.3 million jobs or tax rates don't impact decisions by individuals or businesses or that cutting spending will slow economic growth, we currently have no way of understanding the conclusions CBO has reached because we can't get information on how they got there.

Ultimately, the decisions we make in Congress are only as good as the data upon which they are based. I hope all my colleagues will join me in this effort. Transparency is a cornerstone of sound government. I urge Democrats and Republicans to sign on to this bipartisan good government bill, H.R. 6136, the CBO Transparency Act.

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