Reports on various topics. We just had one on student loans, for example. Then we do i host of scorekeeping functions. In support of the appropriations process. Tracking spending and helping Congress Figure out how much they are spending and how much bills will cost. Mr. Mcardle talk about who you answer to. Mr. Swagel we are a nonpartisan agency. We answer to the congress. We work through the two budget committees, the House Budget Committee and the Senate Budget committee, but we work for the entire congress. Generally our work is for the chairs and ranking members of the various committees of jurisdictions. If there is something on health care that would be in the senate for the finance committee or the health committee. And similarly in the house. And so in a sense we answer to all the members and support all the numbers equally on a nonpartisan basis. Mr. Mcardle all of the members are interested in your budget and economics outlook. What is the takeaway from that . Mr. Swagel the takeaway in a sense is twofold. On the economics side we have gdp growth in our forecast but large budget deficit that persist. Over 1 trillion a year over the next 10 years and the debt to gdp ratio reaching unprecedented levels over the next 10 years, and really over the next 30 years. Going up to about 180 of gdp, level never seen before. And that is what is striking, that conjunction of an economy and a labor market that is in pretty good shape, especially in the labor market, and a budget deficit that is wide and getting wider. Mr. Mcardle what is the Tipping Point . What is too much . Mr. Swagel we dont know. We know that as the debt to gdp ratio rises, that will have some negative effects on the economy. Eventually it will lead to a drag on on consumer spending. And Business Investment through the effect on Interest Rates. Even though we dont see that now, we know at some point it well. And rising debt makes the u. S. Economy more vulnerable. If our debt level is higher and Interest Rates rise, that would make our fiscal challenge all the more difficult. So we dont know exactly when that Tipping Point will come, but we know there is a rising vulnerability from the fiscal trajectory. To jump off of that, a lot of people would have said if we were at the point we are at now, debt to gdp where they are, we would be feeling those effects. What was your view on those issues 10 years ago, and have you changed your view about when and how deficits and debt affect the economy as a whole . Mr. Swagel there is a sense in which we can look at the economy now and understand why Interest Rates are low. A variety of reasons, growth in the rest of the world, it has has some problems and recent challenges with the virus situation in china and the rest of asia that has certainly led to lower Interest Rates in the u. S. We see that situation. When the rest of the world has a problem, the u. S. Economy is a safe haven. Our Treasury Bonds are. Inflation has remained low in the u. S. The risktaking appetite of markets and Market Participants has been lower than people expected. All of that leads to lower Interest Rates. In a sense we understand it, but you asked, how has it changed my view . Sure, 10 years ago if you told me where we were in the economic cycle, 10 or 11 years into an upswing, with the Unemployment Rate at 3. 6 , no, i would not have expected Interest Rates to be as low as they are. That has led to a rethinking in the profession and certainly at cbo over the last year since i have been director, we have marked down our projection of Interest Rates substantially. Mr. Mcardle what were you doing 10 years ago . And what did you do before you took this job . Mr. Swagel i am a professor at the university of Maryland School of public policy, on leave from the university of maryland while serving as cbo director. 10 years ago i had left the treasury department, where i was the chief economist of the treasury for the last two years of the bush administration. And i was in academia then. Speaking of administration, the president s budget for fiscal year 2021 just came out this week. Has very different forecasts on growth and deficit than the cbo forecasts. It sees growth of 3 per year, which we have not seen for a long time. What do you make of the divergence between your forecast and the white houses on growth and on deficits . Mr. Swagel we are analyzing the president s budget now. It is something that the cbo does every year. We will have a full report. As you said, their gdp numbers are pretty different than ours and the trajectory is different. In a sense, they have a different way of doing a forecast. Their forecast assumes that everything the president is proposing is enacted. Our forecast assumes just current law. That probably accounts for some of the difference. They have stronger productivity growth than we do as well. We have productivity growth rebounding from the pretty low productivity growth after the financial crisis. We see better than that, but not a strong productivity growth over the previous decade or two. So that is kind of the main differences. Are there a set of policies that cbo has modeled you think could produce that type of productivity growth . As it is now, you see potential maximum run of the economy being lower than the white house does also, it seems. Mr. Swagel we do. We think longerterm gdp growth around 1. 7 , which is lower than the administrations projection. We know there are some policies that would boost growth, improve productivity growth over time. On the growth side, the Labor Force Growth is decelerating. So, we are an aging society, that affects the labor force. We know immigration is one lever that would increase the labor force, that would increase our output over time and increase gdp, and probably productivity growth as well. Immigrants bring a diversity and a sort of energy to our economy, an innovation, entrepreneurship as well. There are tax policies that would support stronger growth, and that is debated in the congress. There is a variety of levers. It is difficult to know though what is the right way to boost productivity growth. In the economics profession, productivity growth is one of those mysteries that is hard to say what lever will boost productivity growth. What will be your role in the budget debate over the coming months . Mr. Swagel ours is an analytic one. So right now, as you said, we just put out our baseline. Now we are analyzing the president s budget. And then in march, we will put out a new baseline that accounts for the actual dollars of spendings over the last year,. When the president puts out his budget, we get more information on the actual spending over the last year. We will crank through all of that and put out a new baseline in march. As always, cbo will estimate whatever Legislation Congress is considering and evaluate the effects of that. As you think about what legislation you are evaluating, you obviously hear a lot from members on both sides with big ideas. So i am curious how you are looking 10 to 12, 15 months ahead at things like climate legislation, medicare for all, things that would take a fair amount of analytic work to do. How far along is cbo in its analytic capacity at work on some of those things that a new administration, a new congress might, but not necessarily, bring in the future . Mr. Swagel it is one of the challenges of the job to figure out what we need to work on now. Because cbo is at its best when we have done the work before the legislation comes to us. One example of that is surprise billing, which is a topic subject to legislation. Both the house and senate in various committees, we have several analysts at cbo, who 11, 12 months ago figured out this was an important issue and got the data in shape, did the work, so we have been able to support the congress with surprise billing basically because we had these star analysts who figured it out before i arrived. So that is our challenge now. We are working on these issues, as you mentioned, climate. We know that is an issue that is important to members. Both chambers, both parties. So we are doing the things you would expect cbo to do. We are looking at, how does climate fit into the baseline . In some micro ways with Flood Insurance, with military installations, things like that. That spending is discretionary spending, so it is annual appropriations. On the longerterm, the bigger dollars are probably the macro effect on the economy. We are looking at the research that relates Climate Change to overall gdp and then try to say, how does that feed through to the budget . It is not attenuated, but the steps are climate, gdp, spending revenue and so on. Is that reflected it all in the budget, the baseline now, any economic up or down from Climate Change . Where do you expect a baseline adjustment to deal with that . Mr. Swagel i can talk about health also. We are preparing some health care as well. Climate change is implicit in the budget now. We have a projection for the Flood Insurance program. But it is not broken out separately. We dont have a line that says the effects of climate does this to Flood Insurance and things like that. But that is what we are working to understand. So, it is implicit and we are working to make it more explicit. Once we have those connections, we will be in a better position to analyze policies in the future. Could that then lead you to a position where hypothetically cbo could score a bill to reduce Carbon Emissions as being proeconomic growth because it would theoretically reduce the effects of Climate Change on the economy . Mr. Swagel that is a good question. Cbo under my predecessor, doug, two directors ago, did a lot of work on cap and trade legislation. We are looking to update it. First we are looking at the effect of climate on the baseline and then developed to update the analytic tools to evaluate the policies. But the policies he said are the sort of thing we would do. We work jointly with the joint committee on taxation which does the revenue estimates. To say, what is the effect of some policy on the economy, carbon and other emissions, and then ultimately what are the costs. One caution is that the sort of thing of avoiding future disasters doesnt score. Right . So, we would talk about it, and we would certainly provide as much information as we can, but instances avoiding future disasters is a good thing and it has a cost to it. Now, i cant believe it took us this long with two tax reporters to get to taxes, here we are. The cbo did do a lot of work on the tax act that passed in 2017. President trumps signature tax cuts. You forecast its effects on revenues and along with the modeling on growth. So i am curious, two years of data now have been collected on the effects of the tax cuts. How do you think cbos predictions fared, and what have you learned and updated about them in that time . Mr. Swagel as you said, cbo has looked a lot at this. In april of 2018 this is before i started cbo did a comprehensive evaluation of the december, 2017 tax act. And overall, it looks like the effects have been in line with our analysis. So, the impact, the positive impact on gdp growth. It looks about what we expected. It is difficult because of course subsequent events and policies can interfere with the clear signal. So, notably, tariff policies in place starting in 2018 look to have an effect on holding down Business Investment. And we expected to see the positive impact of the tax act coming through Business Investment. We saw that in the first half of 2018, and then Business Investment looks to have been dampened since then. It is hard to disentangle the positives of the tax policy and the dampening of the tariff policy. So we are still tracking. One caveat is that of course many of the tax returns, especially for businesses, were just filed last october. And we dont actually have access to those yet. The gct gets first access. By the end of the year, later in the year, generally october, we will have access to the full file of tax returns working through the jct. What we do see is the incoming revenue, the payments by companies. And on the whole, those are in line with our analysis, but with a couple of important changes we detailed in a blog post last week. Now, i can go into those. If you could maybe just tell the viewers, you did estimate reduced revenues over a decade. Could you talk a little bit about that . To build on that, we had the treasury secretary this week reassert the Administration View which is that the tax cuts will not just generate growth, but generate enough growth to pay for themselves. If you can elaborate on what effect it is having on revenue and whether it is paying for itself. Mr. Swagel i will start there and then go back to the corporate side. We are looking carefully at the incoming data and learning more. Overall, the cbo in april, 2018, in this comprehensive analysis, we indicated that the tax act would increase growth in an amount that would essentially would pay for 20 of the revenue loss of the tax act. This includes all of the dynamic effects. There would be stronger growth, that would mean higher revenue. But the stronger growth would also have an effect on Interest Rates and that would lead to some increasing interest outlays. So the overall of all of that is about 20 . We think roughly it paid for 20 of itself. Again, the administration has a stronger growth outlook, and i havent done the math, but maybe they have in mind with a stronger outlook, there will be more revenue. That is the sort of thing they might have in mind. But that is our take, is 20 . On the corporate side, weve learned a lot in the two years. We dont have the returns. The joint Task Committee just put out a really nice report looking at some of the Largest Corporation returns. Which again, that is their role. We are looking at essentially changes in the data which revise essentially the share of business profits against wages. In the economy, over the previous several years, corporate profits were lower and wages were higher. In a sense, that resolved a bit of a mystery on the Corporate Tax side. The incoming revenues were weaker than we had expected. We knew how much money was coming in the door from tax payments. The data indicated that corporate profits were high relative to the tax payments and now the data revision helped resolve that mystery. So that is one thing. The other thing we have is these two years of both the regulations pertaining to the tax law have been put forward by the treasury and the Internal RevenueService Within the treasury, and taxpayers have reacted to that. And so we are seeing some of the incoming revenue as a result. And that has led us to markdown our expectations of revenues. With less than 10 minutes left, i want to focus on that for a second. When your projections differ with, whether it is the white house or members of congress, can you talk about what happens then . Do you sit down with those groups and say this is why we should be looking at this data and this is why we came to this conclusion . How much back and forth is there to try to show them why you projected what you projected . Mr. Swagel ok, sure. We have a different role than the omb or the council of economic advisers. They do similar things for the president , for the white house. We look at what they are doing and we estimate the president s budget using our economic assumptions, but we dont try to coordinate that. We do different things. We respect them and we Pay Attention to them. Do they ever try to convince you . Mr. Swagel not on the macroeconomic side. In a sense, parallel play would be the agree to disagree. Mr. Swagel it isnt agree to disagree. In a sense we are all talking about what is the economy going to do over the next 10 years . We go out 30 years. Anyones level of confidence of what gdp is going to be in eight years, i think everyone should have some humility about that. We see a wide range of opinions. You know, look, we think we are in the middle of a distributional possible outcomes. We think we have a reasonable forecast, pretty much in the middle of the distribution of say, the bluechip forecasters, so that makes us comfortable. We are not out on a limb here. But we recognize the diversity of opinions. I should add, at the staff level we work well with the executive branch agencies. So if there is legislation that affects something in a cabinet department, a new program at the veterans administration, our analyst would talk at the analyst at the appropriate place and say, how much would that cost you . What would you do . We use that in our cost estimates. There is good cooperation at the technical level. You have been on the job eight months now . Mr. Swagel eight months. Do you like it . Mr. Swagel it is interesting. And it is a lot of fun. Only economists could say that. The people at cbo are fantastic. The economic knowledge, the Institutional Knowledge is incredible, and the issues are just endlessly interesting. And you asked me before, i didnt answer this directly but i meant to, is members of congress can disagree with us. And sometimes the challenge and my responsibility is to explain it. If a member says, this is wrong, or a staffer says this is wrong, can you explain it, i have to be able to explain it in a way that is sensible. If i cant explain it, im not doing my job. In that eight months, how many members opinions have you changed . Mr. Swagel it is not that i am trying to change opinions. Im trying to explain, here is how we how money of them have said how many of them have said, oh i understand why you say it that way now. Mr. Swagel it happens. I will not name members, but you are welcome to. Mr. Swagel there are some issues it is not that it is complex but thinking through all of the ways the economy interacts with the budget. So we do a lot of work on health care, for example. And so there are provisions that would affect drug prices. And that has a budgetary impact. Essentially the federal government subsidizes insurance premiums through the tax code. Everything comes back to the tax code. So, the employersponsored insurance is taxdeductible, and then theres tax premiums through the Affordable Care act. Anything that changes drug prices can therefore change insurance premiums and affects the fiscal situation. So just setting that out. Im not trying to change anyones opinion or view, im just giving the analysis of, here are the steps, here is how it works. I was going to get back to a point rich raised earlier, which is that several democrats running for president in this cycle are campaigning on a medicare for all plan. And if one of those candidates were to win, i am curious if cbo is equipped to and if it is harder to analyze plans that were not talking about billion or billiondollar hundred changes to the economy, but tens of trillions of dollars over 10 years. How does that change the way you approach analyzing a plan that that is just that large and potentially consequential . Mr. Swagel it is exactly the right question with these large policies. In a sense we have to start with humility that the range of it changes the whole economy. It will be large. Before i arrived, the cbo put out a report on singlepayer health care and my colleagues testified at the House Budget Committee. So, we started building the analytic capacity to analyze those sorts of programs. We are looking very broadly. Various ways to expand insurance coverage, because we realize there is substantial congressional interest in expanding coverage. Whether all the way to universal coverage such as with a singlepayer system, or incrementally building on the Affordable Care act, having a public option. The administration has put forward an hra rule, looking at how that will affect the health care system. So we are building capacity in all of these ways, as you said, to be ready if in 2021, whatever direction policy goes, we are hoping to be ready. I want to go back to budget deficits. I hear from readers, i am sure you hear a balanced budget should be a goal. Is that a worthy goal, and what are the levers one could pull to get there, if that is something worth doing . Mr. Swagel in some sense, the cbo, we dont say what the goals are because intrinsically that involves value judgment. Our role would be to provide the analysis. A balanced budget would be one we could say, here are the economic effects of moves towards a balanced budget. And i certainly do that. And so for example, one of the points i make is that, people talk about pay go. And so, a move towards pay go would be in some sense a move toward fiscal adjustment, but pay go by itself actually, it makes the problem worse. It makes it harder, because the things being used to pay for our are of course no longer available to address the existing imbalance. Which is quite large. If you think of pay go as taking away the low hanging fruit, the subsequent decisions are more difficult. Let me phrase it a different way. How do you help members think about the tradeoff between the benefit they could provide to the public now, whether it is paid leave, health care, versus whatever the future cost might be if we run into the sort of deficit problem we talked about at the top . How do you help members thinking about that . And just to add onto that, the potential benefits of a fiscal stimulus, taxcut or whatnot . And if you can do all that in less than two minutes. Mr. Swagel i will hit the high points. It is difficult because these tradeoffs between today, the potential immediate benefits of the source of things you talked about, whether the tax side or the spending side, we do our best. Our first focus is on the fiscal side, the cost. We know members dont want to know what it costs, but what are the benefits. We try to set that out as much as we can. How many people will be insured, how many people will take advantage of paid family leave, and so on. Those are the sorts of benefits that we try to set out, and not make a judgment. That is for members. We will tell them they cost as much as we can, they have to decide the tradeoff. The longer term is harder. So, at what point will this fiscal imbalance pose a threat . We know it is out there. It is not in our tenyear horizon. We dont see it there, but it is out there somewhere and we can tell policymakers to be cognizant of it, but we dont know exactly when that will come. Before you go, we started by talking about your big report on debt and deficit. It came in at the end of january. Were you surprised that debt merited no mention in the state of the Union Address . Mr. Swagel you know, no. I just there is a sense in which we support the congress and we are so focused on the policy of the congress that we just dont do the analysis of what the president is doing, the campaign is doing and all that, we focus on what the congress would you have liked him to have mentioned it . Mr. Swagel it is not for me to have an opinion on that. We will end it there. Cbo director, phillip swagel. Thank you for being our newsmaker this week. Now we continue with the roundtable portion of rich rubin, Jim Tankersley of the new york times. We started and ended that discussion with director swagel on debt and deficit. You two have covered a lot of handwringing on capitol hill over your careers when it comes to debt and deficit issues. How much handwringing did that latest report by cbo cause on capitol hill . It was a rehandwringing of all of the handwringing that has been done. Nothing has changed. We have deficits. In the longterm fixture is, their debt curve goes like this. So, in some ways it is reaffirming on capitol hill what everybody has already known, and what members have sort of deprioritized. Members have made the decision in recent years to emphasize tax cuts now, spending now, and either make the implicit or explicit decision that those future issues would be just dealt with in the future. During the tail end of president obamas two terms, there was sort of an agreement between democrats and republicans that no one really liked that held down spending growth on areas republicans to like defense, and areas democrats wanted to grow. Now we have the opposite consensus, where they have just agreed to spend what everybody wants basically on those programs, and also republicans passed their tax cuts. And so those two combined with this underlying demographic driver of larger debts over time are really sort of yielding this explosion of both handwringing on the one hand and inaction on the other. There has never been a greater divide i think in washington between the amount of time people spend talking about the deficit and the amount of time they spend actually working to reduce it. That is interesting compared to a few years ago. In some ways it is a reflection of the economic reality that we have. If you asked would there be a bad Economic Situation and the consensus would have been yes. The reality has been different. The reality has been in part what changed the policy. You see now people talk about, even the democrats on the campaign trail are very much trying to align spending proposals with tax proposals so they would not make projected deficits worse. But there has not been a emphasis beyond that on deficit reduction. Mr. Mcardle you mentioned the campaign trail. What did you think about his answer to the cbos role in the policy proposals that have come up on the campaign trail . It is like playing basketball. You have to get to the spot on the floor where the ball is going to be. That is essentially what they are trying to do for 2021. To see what is out there on the campaign trail and know they have that analytic capacity in place. Because as we have seen in 2009 and 2017, new president s and new majorities come in and they are ready to go and push through policies within a matter of weeks or months. The nonpartisan plumbing of congress, cbo, has to be ready for that. If the president is reelected, he has indicated he will push for a second tax cut measure. There will be obviously modeling on that. There will presumably be second term initiatives, although we not have seen as many of those from the president as from his potential rivals on the democratic side. I think it was important what the director got at with the scope of the possible changes if a democrat is elected, it will be unlike anything they have had to estimate before. And his words about needing to have humility in those models is and and those predictions i think is very important, particularly since cbo is seen host anything he brought up surprise you in what you have heard from in the past . Of itont know what surprised me, but it strike me will we talked about measures to boost of the u. S. Economy over time and single about immigration policy as a way to bring more workers in and be more productive. In response to the treasury saying this, the director says, we think they will pay for 20 . That is the divide between the forecast in the administration and cbos small conservative view of the world. Host thank you for being on newsmakers this week. We are live in las vegas president ialtic candidates joe biden, pete buttigieg, senator Amy Klobuchar and tom steyer are getting ready to speak at a forum about infrastructure. Live campaign 2020 coverage now on cspan. We are live in las vegas waiting for democratic president ial candidates joe biden, pete luda judge, senator Amy Klobuchar and tom steyer. The caucus is often called the first in the west caucus that is next saturday, february 22. Sends 36 delegates to the national convention. We will bring you the results on cspan and cspan. Org. Live campaign 2020 coverage here on cspan. We are waiting for this event on infrastructure to get underway live from lost vegas. Lets show you some of this mornings washington journal talking about the 2020 campaign. , hee is heard on sirius xm is a contributor to the daily beast and cnn. Thank you for being with us. Thank you for having me. As you look at this emma craddick race in its current state, what do you see democratic race in its current state, what do you see . I am seeing democrats more animated and unified. The person who will be the trump, that will defeat that is whats happening now. Hampshire from saturday through wednesday going onevents, speaking of people the streets, so i was not surprised about the turnout and the votes in the primary. It was a record number. I wont say its panic, i am seeing skittishness. The democrats are asking who can be from . That is the number one factor. That is building anxiety, but i cant tell you enough people call my show and talk about every candidate they might like. At the end they always say, vote blue, no matter who. That is what i think donald trump is facing in november. A unified democratic party. You set down with senator Bernie Sanders this past week. Here is part of that interview. Right now you have mayor bloomberg running, some people look at him as the solution. Is he the solution or problem when you talk about big money . Sanders a think he is a problem. In a democracy you do not have the right to buy a presidency. It really is absurd that we have a guy who is prepared to spend many hundreds of millions of dollars on tv ads. Meanwhile, he did not do with the other candidates did. He was not Holding Town Halls in iowa, New Hampshire or south carolina. Those were not important enough for him. He could simply a iv election with hundreds of millions of dollars worth of ads. That is the basic fundamental problem in american society. Billionaires have extraordinary wealth and power over the economic and political life of this country. That is what we are fighting to end. Billionaires are in the race, not only michael bloomberg, but tom steyer. Guest and i had senator Sanders Campaign manager on the show who said, they have 2 billion or standing in their way. They meant Mike Bloomberg and donald trump. Afternoon, i am zachary schaefer, president of united infrastructure, and it is my honor to welcome you to moving america forward. The first ever president ial Candidate Forum on infrastructure. [applause] zachary united for infrastructure is a nonpartisan, advocacy organization. It has been our honor for many years to convene and collaborate with leaders in business and government on this important