It is 10 00 and good morning, everyone. The hearing will come to order. Welcome to the committee on the budgets hearing on oversight of the Congressional Budget Office. This hearing will focus on Cbos 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 todays hearing is to learn more about cbo, which was created as part of the congressional budget and impoundment act of 1974. For decades, this agencys primary function and duty 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 cbos 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. Its simply a fact that serious oversight has not been exercised to ensure the agency still has the tools to needs to be successful in fulfilling its mandate. That being said, our intention is the same with todays 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 todays 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 interworkings of this congressional support agency and how it has evolved over the years, im 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 congress ability to budget independently. However, there are legitimate questions about cbo how cbo operates. And im 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, im 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 Committees Ranking Member mr. Yarmuth, ill remind everyone that this committee will strictly enforce the fiveminute rule. Im 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. Thank you very much, mr. Chairman. Congratulations on your new role. I look forward to working with you. Thank you for calling this hearing. All of us on the Budget Committee take our oversight role seriously and i am very glad that 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 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 a 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, highquality analysis to inform our decisionmaking and improve our ability to protect the power of the purse. While everyone here is aware that director hall excuse me was 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 im sure we will hear some of that today. Youve 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 its the republicans complaining, the next its the democrats. That has been a reality in Congress Since cbos inception, but there has been a dramatic shift recently in the treatment of cbo, as members of the committee, this should be deeply troubling to us all. Questioning and fair criticism of cbo have morphed into more toss tick 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 the number of ininsured americans by 20 million or causing premiums to skyrocket, particularly when there is no viable plan for replacement, but im not sure what you thought cbos 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 premiums affordable. If you end the individual mandate, which weve 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 lou insurers to play games, premiums will increase for everyone who are not no perfect health. 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 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 cbos 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 havent done is called into question the integrity of the institution or individual staff members. Its 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. Its one of the few institutions in washington that serves that role. Attacks on the cbo arent 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 workers objectives and the steps youve taken to increase transparency at cbo. Id like to learn more about your staffs technical capabilities and any additional need for funding or tools. Youll likely hear disagreements with some of your methcies. I think some will challenge you on the process and encourage you to look at alternative methods. I think thats fair game and i look forward to that discussion. Thank you again, dr. Hall, for your leadership at cbo and look forward to your testimony today. I yield back. Thank you, mr. Yarmuth. In the interest of time, if any members have opening statements, i ask that they be submitted for the record. Id like to introduce and recognize the director of the Congressional Budget Office, dr. Keith hall. Thank you no your time today. Let me stay say from a personal standpoint how enjoyable it was 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 ten minutes to deliver your oral remarks and the floor is yours. Thank you, sir. Chairman womack, Ranking Member yarmuth and members of the committee, thank you for inviting me to testify this morning about Cbos 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 r lie on you to provide productive 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 ten points in my remarks and then i look forward to talking to 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. Cbos 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 and the executive branch. Second, the Congress Sets cbos priorities. Cbo follows processes specified in statute or developed by the agency in concert with the Budget Committees and congressional leadership. Cbos 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 cbos statutory requirements is producing reports, the best known of which is the annual budget and economic outlook. That report includes cbos baseline budgetary and economic projections. Cbos 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 not do not have to be used to enforce budgetary rules or targets. Moreover, cbo does not enforce such budgetary rules, the Budget Committees do. 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 thousands of legislative proposals and amendments. And published many reports about the budget, the economy and related issues. Nevertheless, because of limited resources and the number of estimates and analysis 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 highquality analysis that it needs, cbos staff has expertise in many areas. Among cbos 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 macro economics. Maintaining a broad array of expertise allows cbo to respond to policy makers needs quickly. Analysts are organized into a number of divisions, but much of cbos work requires work from more than one division. Cbo analysts also 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 and private organizations and regularly consult with a disverse range of outside experts, including professors, analysts at think tanks, representatives of industry groups, with private sector experts and Government Employees at the federal, state and local levels. Some of the consultations occur during meeting with cbos panel of economic advisers and panel of Health Advisers. Fifth, cbos 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 of cbos employees have advanced degrees. And without regard to political affiliation. We carefully consider whether potential analysis can perform 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 expert whos present the likely consequences of proposals being presented by the congress. Our goal is to produce estimates in the middle of distribution of possible outcomes. Sixth, models do not produce cbo estimates, cbo does. Cbos estimates often require projections of how people and institutions would respond to proposed changes in law. A computer tool there are various kinds of models, such as complex simulation models, regression models and calculations in spread sheets. Nonetheless, models often cannot show the full scope of the effects of the legislative proposal. Analysts must routinely go further, combining what can be learned from a model with other information to 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 cbos 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 ynl revisit our past work and learn from 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, cbos cost estimates and publications include documentation of the basis of their findings. We document the revisions through our budget projections and estimates. Rereport on the accuracy of our projections, including projections about the economy, extending, revenues and Health Insurance subsidies. We publish analysis of how sensitive our estimates are and seek external review to our reports before theyre released and the methods in which our products are based. Cbo also 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 cbos website. Further more, cbos analysis regularly explain their analysis to Congressional Staff. My colleagues gave 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 cbos work is high and our resourcer are constrained, we need to balance requests about finished analysis with requests for new analysis and our other responsibilities, such as regularly updating our baseline projections. Ninth, cbo evolves as the needs of congress evolve. Cbo remains true to its original mission, we work with the congress in ways probably not envisioned when the agency was first created. For example, as legislators have grown more complex, we found ourselves spending more time providing preliminarily analysis and Technical Assistance during the drafting stage. Were 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 agenda, sbo shifts staffing and develops new analytical tools. For example, we developed significant resources to analyze Health Care Issues so that we would be prepared for large scale legislative proposals on that front. Capability to study how legislative proposals would affect the economy and thus the budget as the congress desire for dynamic analysis intensifies. Cbo is always looking for ways to do things better. For example, were reviewing and updating every aspect of our simulation model of Health Insurance coverage, which forms the backbone of our federal projections for Health Care Spending for people younger than 65. In addition, we will further improve our compatibility 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 and handling suffrages of analysis for particular issues. Do more to explain how analysts employ models while producing every mates. The extent to which cbo can accomplish these objectives will depend partly whether we receive the funding we have requested for them. As always, we look for ways to serve you better. I welcome your suggestions. 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 time clock today because of the number of things that have been crammed into one day, 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. Thank you, mr. Chairman. I intend to do the same thing. Ill sit until the bitter end with you. Thanks. The first round of questions go to my friend from oklahoma, mr. Coal. Thank you, mr. Chairman. I want to thank you for this hearing. This is something my good friend the former chairman was planning to do as well, but its really important for us to do and i want to begin, dr. Hall, by thanking you and your staff. Ive dealt with a lot of different cbo directors since ive been on this committee and with the staff and its been unfailingly professional and courteous, no matter who was at the head of it. So i think you had a head a very fine agency. I dont always agree, but never had any difficulty getting the explanations and the judgements, and thats fair enough. I do want to ask a couple of things and my good friend from kentucky talked about the Affordable Care analysis. There is one area that i want to ask about. You know, its sort of down in the weeds 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 ive mentioned this to you before when you were kind enough to come by my office, in the model that was used, there was an assumption that nonMedicaid 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 im not basing this on a policy argument either way. Im not arguing for or against the Affordable Health care act. I can just tell you politically in my state, thats just not going to happen. There is no way it was ever going to become a Medicaid Expansion state. The population was heavily opposed. Just politically was not feasible. And, frankly, the state didnt have the money even for a 10 match at the time. So, you know, there are literally in that model of how many people would lose Health Insurance a bunch of people that dont have it now in the state of oklahoma, would not get it because you would not have the Medicaid Expansion and therefore couldnt lose it. Walk me through how you make those kinds of assumptions. And then as youre doing that, if you would, because i think when you make assumptions like that, sometimes it would be helpful and maybe you do this. You know, just talk to the committee itself. Both sides of the aisle. And say, okay, this is what were 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 shouldnt be making the final decision, 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. 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 didnt anticipate that. So were now into an area where we now have to sort of predict how many states will voluntarily expand and wont expand. Now, weve 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 its covering about 50 of the population that could potentially be eligible. We see it going up to about 70 . So its not so extreme where we go from 100 from 50 to all the states will take it. Its much lower than that. And thats a tricky thing because what weve done is looked at states, looked at their past behavior, looked at a number of things, how theyve 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 other that they will expand at some point over the next ten years. So part of what that means then is weve tried although weve put states in the buckets, you know, 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. We tried 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. Im 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 . Literally, i think 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. Its your estimate, after all. First of all, we spend a lot of time deciding what are the Different Things that could influence whether a state expands or not . We have a large sort of dimensions under which we did that. Used that to as i say put them in the buckets. We work that up with consultation of folks. I had a briefing talking about how that was done, that sort of thing. We did not, you know, i dont know exactly who we wound up talking with. We probably talked with some state Insurance Companies. I dont want to be the first guy the chairman chastises for running over time. Thank you, mr. Chairman. Thank you. Well visit about this again. Thank you very much. Mrs. Lee of california. Thank you very much. Thank you, mr. Chairman, and our Ranking Member for this hearing. Thank you, dr. Hall, for being with us today. Todays hearing gives us an opportunity really to discuss how important cbos impartial analysis is to congress and to the American People. Id like to reiterate 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 organizations impartial and nonpartisan analysis just because we dont like cbos scores. Last year, director hall, and our Ranking Member mentioned the aca. Its a fact that republicans spent weeks attacking your organizations score of the, 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 Health Care Coverage by 32 million while increasing premiums for Older Americans by as much as 800 i think it was 850 . 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 that these attacks no longer happen . What is it you think we could do to maybe sure your job can be accomplished without the partisan attacks . Well, ill start with the last question first briefly. Things line the oversight hearings are really helpful to us. Id love the chance to talk about things. One of the things i wish we were able to do more is come to visit individuals offices and make little presentations on things. Ive 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 that were kind of clear, right . There were 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 all things that are going to work to lower the coverage relative to our baseline. I mean, even just saying those things without modelling it, i think youre talking about a decline of probably tens of millions of people from coverage. Without the modelling. And with our modelling, we spent a lot of time doing this very, very carefully, various different aspects of it. Our best estimate 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 Health care simulation model. That was just a piece of it. We had to create several other models. We had to use modelling 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 cant do it justice here, but we did make a presentation that i remember that i mentioned to the at the Congressional Research Service Going through exactly what we did to get to that estimate. I can make that those notes available to you and we can think about doing another presentation if folks want to hear it. So do you think its 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 . Yeah, you know, i cant guess, you know . I think the numbers were were very large for folks they and i personally am not sure they should have expected anything but pretty large numbers. But we certainly can try to do better in explaining what weve done. 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 indicated their budget would kick off 3 growth. And end the deficit within ten years and cbo found that it would do no such thing. Instead of i think it was boosting growth, instead, i think you came up with 1. 8 or 1. 9 . So what is it . Again, is it the process or the outcome of your analysis that the administration also believes was not accurate . Well, i you know, i dont know that much about how they how they did their Economic Forecasting. They havent 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. Were very, very careful about that. 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 were were very transparent about that. Okay. Thank you, mr. Chairman. Thank you, ms. Lee. Gentleman from georgia. Thank you very much, mr. Chairman. Thank you for holing the hearing today. Youve got your work cut out for you, mr. Chairman. Im reading from todays washington post. If youre bored with state of the union coverage, tune in for what were calling republicans versus the Congressional Budget Office. Its hard to see how we get from where we are to where we want to be. I thought my friend from california accurately expressed her frustration about partisan attacks on the Budget Office and then went in to use the budget cbo data to make partisan attacks on bills. And i think thats a i think thats 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 was what actually true was the Budget Committee was created to give congress a stronger role and the cbo was corrected to advise and council 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. It wasnt isnt that the original incarnation of the cbo . Im not sure about what the original intent was, but certainly that characterization is right, that were here only to assist the Budget Committees. And the rest of the congress. I my reading of history tells me the senate found it beneath t tttee so once they insisted on having their own staff, we insisted on having our own staff and you were left to advise us both on the side. My experience, you talk about hiring people irrespective of political outlook, and i think thats very challenging. My experience with cbo directors, i tend to learn more about their politics when theyre gone than while theyre there. We see a lot in hindsight, but i look at im reading from a cbo cost estimate of the American Health care act, and the top line says this, cbo and jct estimate enacting the American Health care act would reduce deficits by 119 billion over the coming decade and reduce the uninsured by 20 million by 2026 relative to current law. What you could have said is that were going to increase Health Care Freedom for 12 Million People between now and 2026, relative to current law. You could have said were 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. Has a you rightly describe your role as score keeper, but because words have meaning, every single line takes on a political connotation. How do we scrub to prevent that . Specifically, for example, did folks talk about describing the Affordable Care act the American Health care act in Health Care Freedom terms instead of people lose insurance because they decide its not right for them and so they leave it on their own volition. I respectfully disagree that our language at all was political. And one of the things we tried very, very hard to do was was to be very factual about this. Let me interrupt you because empl my time is limited. Okay. Thats critically important. You 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 dont recognize that line as being political, then we have a much harder challenge if you recognize that just by the 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. Let me just say, we did 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 those are the winds of change blowing here. Director. [ laughter ] you make a you make a very interesting observation. Cbo was, in fact, created to advise congress, and i would expect that you probably get more attention from outside of congress than you do from inside of congress these days. Though we wont have time to do it in this hearing, i look forward to having that conversation. I think we could congress could benefit more from your work if it was less the object of political conversation, more policy. Can i just say one thing about 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 and not be 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. Again, that to me is very consistent with the idea that were just providing advice. Were actually were not trying to get attention at all. Except by you. Because we want to help you make good decisions. Mr. Molten from massachusetts. Thank you, mr. Chairman. Thank you, director for being here. I appreciate your presence and your work. You know, im 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. Thats how i looked at it. Can you tell me, what are some of the transparency initiates that you have taken to better understand to help the public better understand your work . I mean, youve admitted that this is a place where you can do better to help congress and the public understand your analysis. So what are some of the things youre working on . Sure. Well, weve always relied upon trying to write up our estimates as clearly as we possibly can with as much detail as we possibly can and we always weve always counted on being able to come in and talk to members if they have questions and that sort of thing. Lately, we are trying to were hearing concern over transparency. Were trying very hard to increase transparency and were doing it really in a number of ways. Were theres been a lot of talk about the Health Insurance coverage model where were completely revising that. Were going to be making presentations about different aspects of that publicly so we get feedback on it and were going to provide documentation and some computer code. Thats a big lift. Its actually weve been planning on doing this since i came on board three years ago. Weve been too busy doing health care estimates. We had hoped to be done literally a year ago, but weve been too busy doing health care 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 that would help i presume a bit for people to understand where we get our health care estimates. Although, again, weve also made some presentations. Were trying to document our processes. Were increasing that. Were trying to document our models more. Were doing things like our longterm budget model, were redoing parts of that. Were going to make that publicly available. Director, what kind of formal review does cbos 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 . 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 legislation would work but how it would be implemented. We do that very carefully with training and once we get that done, we try very carefully to rely on all the data we found to make a general have a general opinion on how things are going to work. We have a very careful review process. Almost everything we produce everything we produce is reviewed at several different leve levels. For big things, we have a huge number of people involved. For the health care 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. 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 . Certainly with the analytical tools the answer is yes, always. Because we have so many models, were always trying to update them, we always need to be adapted. To give you some idea of the range of work that weve got, we did a constant of our models, and not just the models that exist but the models that are reoccurring, use over and over and over again. We got up to about 215 different models and were constantly updating those things. It gives you an idea of the challenge we have of keeping these things up to date. We have a lot of people doing that. Its also a challenge for the Transparency Part because it takes time to make these things publicly available. Director, my final question is about a relatively new challenge you face, which is this outside criticism of cbo. As so many 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 . I think our morale has held up pretty well because i think i think we have people who are professionals and they expect that people criticizing the analysis or disagreeing with analysis, thats thats fair game. We do have some trouble when people call us biased or Something Like that. Which is which is going just too far because were were actually trying very, very hard to do our work carefully. I think for the most part people understand and weve had quite a few people come to our defense. People who actually know cbos work and use cbos work carefully. Have really come to our defense on some of these criticisms. Thats been very helpful. Thank you, mr. Chairman. Gentleman from alabama, mr. Gary 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 in 2017, the longterm budget outlook. And you pointed out that this obviously a year ago, debt to gdp was currently 77 . Is that where we are . Yes. And you also pointed out that in 30 years that the debt to gdp will be 150 . Yes. 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 . Thats right. Is that a serious problem . It is a serious problem. Its a serious issue that its not getting better. 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, the year before last . Well, i want to be careful about making recommendations to the committee, but we you put out the report. We certainly support that work. You put out that report and its a serious report and i assume youre planning to release another longterm budget outlook in a month or two, is that would that be fair . Thats fair. Okay. What what are your youre obviously looking at the numbers now. I dont 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 50year average for debt to gdp which i think is about 40 , is that correct . Thats right. We actually have some of those scenarios in our budget outlook that will be coming up. We have scenarios of what it would take if you start now and that sort of thing. I dont know those off the top of my head. Its about 680 to 700 billion, isnt it . Okay. You read the last one. That sounds right. 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 its going to require that we make some tough decisions. In regard to budget, particularly mandatory spending, and that would include health care. Also, i want to ask you, you in your last report that we were looking at, i think you were projecting Economic Growth at 1. 9 , is that correct . Well, yeah, the longterm Economic Growth would settle in at 1. 8 whats longterm . Ten years . Averaging 1. 9 over ten . I think thats right. Before ten years. Seven or eight years and then Going Forward it would remain at about that level. So are you optimistic or pessimistic that that number might improve . Well, i i think part of what id like to do is point out the sort of things that would be needed to that to improve. What would that be . Well, it would be supply side things. It would be the capability of the economy to increase production past its sort of potential. So, you know, the obvious things are the biggest single problem we have is a slowly growing labor supply because of the aging population. I was i was going to try to get to that. I appreciate you preemptively bringing that up because i think thats, again, part of the work that weve got to do on the Budget Committee in regard to making sure that the ablebodied 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. Ive only got a little over a minute left and i want to change directions just a little bit here and ask you i appreciate the work youre doing towards trying to enhance a culture of transparency at the cbo. In addition to those efforts that youve listed, has there been any discussion of including some Sensitivity Analysis so that members can see how small changes in assumptions could drastically impact the estimate . Im a im a fan of that. 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 the socalled unknown unknowns. You know, where there are some statistical uncertainty but also there is some uncertainty we just dont know what it is. Is this because of limited band with or insufficient tools . I mean, limited bandwith for the staff . What do you need . If were going to start to talk about how we resolve the longer term issues 30 years down the road, these minor changes could make big differences and will matter a lot to this committee. To be honest, thats one of the reasons we have a fair number of technical economist whos are there to sort of help us work through some of this methodology and develop ways to work through the uncertainty. Thank you, mr. Chairman. I yield back. Thank you, mr. Palmer. 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 business wonl and i also ran the Washington State department of revenue and i know that organization cant move forward if they only have limited visibility. A business wouldnt stay in business if it only planned 30 or 60 days at a time. Yet here we are four 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 . Well, i appreciate the question, but i want to try to back off on offering advice to the Budget Committee beyond the sort of Technical Work that we do. Its part of its part of how we establish our objectivity. Well, does this uncertainty make it harder for you to provide longterm budget projections . Sure. I mean, it poses challenges. You know, 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 was not trivial. And what about your own ability to plan for this year and hire staff . Thats an issue for us. We had some extra expenses last year and right now our continuing resolution is is not what it needs to be. If we were to continue at this continuing resolution for the rest of the year, wed actually have to cut back on staff and end training and some things like that that would make it very difficult for us. Thank you. Also, my district is a district on the northern border. Distric 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, business community, faithbased 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 Forecasts for major legislation affecting Health Insurance. I wonder, do you plan to do the same for any major legislation affecting immigration . If we have specific proposals, we will well do our thing and estimate the likely impact. So in 2013, cbo released a report on 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 20242033 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 . I think youve got the main takeaway is fine. I dont recall too many specifics at this point. But obviously Immigration Reform really depends upon a lot of the specifics. Thats one of the things were very, very careful about is that sometimes the details matter when you dont think they matter. That makes a big difference. And we rely on research literature, what the most Current Research literature that talks about the effect of immigration on labor force and things like that. Well, clearly, theres 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 would have is an important part of the conversation when were looking at a tax bill that just 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 Congressional Budget Office is nonpartisan office, and it is tasked with objectively looking at the facts. So i want to thank you for your work. And i yield back. Thank you, ms. Delbene. Mr. Renacci from ohio. The witness is yours. I want to congratulate late you on your selection. I look forward to working with you in 2018. I appreciate this hearing. I hope we can look at Budget Committee reform 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, and 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 have 3,000 employees at one point in time. I had to wake up every morning deciding making decisions on how i can make sure their livelihoods were maintained, and i relied on people to help me do that, just like we rely on your organization. And i think thats important. But what you and i talked about in my 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 didnt fail. My concerns has always been with the 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. Its easy to say this is whats going to happen. I realize its difficult for you as you make those decisions, youre moving on to another issue and another issue. 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, and some of your decisions are wrong. Where you made your mistakes, where you made your failures, where you were right so we can learn better. Im hoping at some point in time we can talk about how that transparency can be better informed for us. I still dont know how you do that. Every time we do have mistakes, can you kind of talk about how youre going to change that transparency . One thing weve actually done this past year, we actually produced a report that looked at how weve estimated outlays, how accurate weve been after outlays. So, for example, between 1984 and now, our estimates of outlays were off by about 1. 7 on average within the first budget year. And over six years were off by about 3 percentage points. So that gives you an idea, when we make an estimate, on average, thats how far were off, up or down. You know, its hard to hard to say whether thats good or bod. Wed like it to be zero. But thats a pretty good comprehensive look. It gets hard when you look at individual pieces of legislation. They wind up being thrown into a bigger budget category. You cant always follow them. Were doing that sort of thing. We did a pretty careful report on how we did on the coverage estimates under the aca, not just coverage, excuse me, the budget estimates under the aca, thats something to actually look forward to. Theres been a lot of focus on that. We went back and did a nice objective look on how we did and how others did. 1 or 2 on a trillion dollar budget is big, in many cases. The trustee report and the cbo differs on Social Security trust fund, and the short fall. Can you tell me, you know, why theres differences there and how youre reconciling that out . As a member of the ways and means committee, im very concerned about Social Security, and very concerned about the shortfalls and the outlays. But we also have two reports that differ. We actually we had a hearing little while back that was really helpful for us to understand how Social Security comes up with its numbers. We talk to them about how we come up with our numbers. Im hoping that after we produce our next long run budget outlook we compare ourselves to the Social Security folks. The biggest difference starts with economic assumptions, which are sort of basic. We do have some differences there, some differences in labor force. But then theres some other things like mortality rates and other sorts of things. We did write up a report that has details of where we differ. Id like to update that. You would admit, though, because i talked to you about your predecessor. I have the cares act out there, i had outsiders do preparation of cost differences and cbo scores are different than my my outsider scored it. When i met with cbo i really did get a learning model for myself. And its it was simple math. It was the differences in the cbo was saying, this is what we believe, and my outsiders were saying this is what i believe. You admit we could have those differences on anything, on any issue . Thats right. Thats why the transparency is so important. Sure. I appreciate it. Again, i yield back, and thank you. Thank you, mr. Renacci. Next to florida, ms. Wasserman schultz. Thank you, mr. Chairman. Congratulations on your as fo Historical Context for my colleagues, you may know that i was the chair and Ranking Member of the legislative Branch Appropriations subcommittee for then years. In that role i was responsible, in part, for the oversight of cbos budget. We spent a lot of time working with your predecessors 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. Thats something that congress has endeavored to continue to make sure you have because if you are hamstrung by not having enough staff then theres a concern. Ive had cbo analyses ive agreed with, and some ive disagreed with. You were appointed by speaker ryan, i believe, and you worked in the george w. Bush administration. And you subscribe to the idea of the practice of dynamic scoring, which is an analysis analytic process with which i disagree. Yet i dont malign your you and your staffs analysiss even when i disagree with them. Facts can be annoying. Especially when theyre presented to you and they dont line up with your beliefs. Were in a world of alternative facts. So, to me, its absolutely essential that we have cbos objective analysis in the majority, in 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, 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 are the likely affects of republican policy proposals. I have about 25 years of managing policy analysis, policy research. Ive worked with a lot of very great technical people who are professional, do their work objectively. Cbo is at the top, top of that. Theyre just outstanding, the people. Theyre very, very professional. We do a really good job, always done a good job of hiring capable, professional people. The culture there is very strong to try to do objective work and get all sorts of viewpoints and try very hard to be objective about things. We have value because were credible. And thats why ive 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 people who are really familiar with us, i think we have a very strong reputation for doing nonpartisan work. Thank you. And please send our best wishes and support and thanks to the folks that work for cbo. You work excruciatingly long hours. Ive 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 ill again stress that you are currently using a practice of dynamic scoring with which i and most democrats dont agree. And yet we still have faith in your analysis. Before i run out of time, i just want to ask a question thats more granular. In the 2014 longterm 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 that an improved cbo structure would have resulted in a more which is the subject of todays hearing would have resulted in a more accurate projection . Well, that gap in the Life Expectancy is something weve certainly seen in the literature, and in the data. Were actually we are actively researching that a bit to see that we get it right in our forecast. Thats an important part of our longterm forecast. Yield back the balance of my time. Thank you. Mr. Arrington from texas. Thank you, mr. Chairman, and i look forward to serving under your leadership and congratulations on your appointment. 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. So im going to be a little boring in my series of operational questions. Just because they may be boring doesnt mean theyre not extremely important. So let me start with the Peter Drucker sort of philosophical question. And let me ask you if you subscribe to this. If you cant measure it, you cant manage it . Do you subscribe to that . Yes, actually. Developing metrics about how were doing is very important. How do you measure success in your organization for the work that you do and for the people you manage . Just succinctly, if you could, please. 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 strong review process. We want to be comfortable with it. We now do things that were going to do more of to assess how weve done. I mentioned the report looking about how weve done in projecting outlays, weve done on revenues, one on economic would you say quality pardon me for interrupting. Just to be more specific. When youre talking about quality, are you do you mean accuracy . Impartiality . Would those two be at the 207 top of the list . Yes. How do you measure accuracy . Do you go back and look at what your projected and estimates, and within a margin of error thats reasonable, how far you hit the target, or how far away from the target you were . We do. One of the things we do, weve done privately for years, which i think theres been an increased interest in, we may start to make public, once a year we do an analysis of actuals, where we get down into all the small budget categories and see, how do we predict those numbers this past year, and what was the actual number . We have an analyst go through that, and weve always done this, and talk about where they were off, where they werent off, and that is part of how we judge their performance. I commend you for that exercise. I think thats im 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 . Whatever the metrics are, do you have that, and could i look at that . To see how often youre hitting the target. And so we can Work Together to make improvements. If you cant measure it, you cant improve it. Yeah. I can see what we have. One of the things were 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 we try to do is try to do more of that individual analysis. But a lot of it is we just cant do it. You mentioned thank you for all that. Let me jump to culture. Im 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 do you have where is your weakness . Where culturally can you improve . And be very transparent about that. It would be helpful to us. I think one of the most complicated things we do is this sort of tradeoff, when were under really severe time pressure. We have to decide whats a good high quality analysis, and try to hold to that. And so sometimes its this real tradeoff between between feeling like weve got a high enough quality were comfortable enough with an estimate, and frankly being leaned on sometimes pretty hard by Committee Staff, hurry, hurry, and now were throwing in this Transparency Part. Thats another third area. And thats a tough trio of things to manage. Let me run through the list. Thank you for answering the questions. 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 werent doing in your stated mission in 1974 . That is, what are you doing additionally to what youve been authorized to do in terms of products . 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 in our formal cost estimates. And i think thats a difficult thing. Because theres no output for that except, i hope, that committees find it valuable. They spend a lot of time asking us technical questions. Thats a real difference from the old days. A lot of it is because legislation gets to be so complicated and complex. Thank you, dr. Hall. My time is expired. Ill follow up with the rest of my questions. And mr. Chairman, i yield back. Thank you, lets go now to ms. Jayapal from washington. 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 with my colleagues that we are operating in an increasingly partisan environment where actual institutions are being undermined. You mentioned some of the accusations of bias. And i think, you know, i found several statements omb director Nick Mulvaney who questioned the analysis of a bill last june, and assayi person is doing scorf obamacare, theres some sort of bias in favor of a government mandate. Last year the white house tweeted that the cbo continues to prove its model simply cant be trusted to accurately predict the outcomes of Important Health care legislation. I want to give you a chance to respond to those charges once again. But also just say i think its important to recognize, with all due respect to my friend from georgia, who was commenting on ms. Lees questioning, that there is a difference between the what the office does, what the Congressional Budget Office does, and how members choose to use it, use the results of that. And we all understand that we have different perspectives, different political flot philosophies. We may use the numbers you come up in different ways. We may believe different conclusions can be drawn from those numbers. 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. So that the public, and explain to the public that might be watching what that means to be career staff. First of all. We hire people at cbo purely on the technical abilities. We dont ask anybody about their politics or their views in anything. We try very hard to avoid that. And part of our process is, you know, ive 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 its part of the culture. Well actually go back and look at some of the places where some of our employees worked. If theyve been in political jobs, relatively lately, we dont hire them. If they 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. That parts really important to us. And then, you know, we dont just throw analysts out there by themselves. We have a review process that involves lots of people. And, you know, ultimately, the directors responsible for all the work at cbo. And i think i think the cbo has processes in place, and we try very hard to make sure that were objective, and it works like that. Frankly, if there were signs of someone being objective in their work, and not being objective in their work, that would be a problem. That would be against cbo policy. And were were like congressional offices. People work at the pleasure of the director. 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 a cbo score before it goes to the floor. Tell us what members of Congress Miss when we dont have a cbo score in front of us as were evaluating a major piece of legislation like health care, or taxes. 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 youve ever looked at the actual text, and then read a cbo, you can tell theres a lot of work there just describing exactly what it does and what it involves and whats impacted. Thats a real help right off the bat in addition to, of course, then us going further and trying to look at the effects in the budget. Thank you. Let me just end by asking, if theres anything you want to say on the recent tax bill, and how you built that all the wideranging impacts into your baseline. You have 30 seconds left. Sure. Well, the estimate of the tax bill itself was done by the joint committee in taxation. Were required to take their estimate. Were going to work it into our own economic and budget forecast. Weve been doing that. We normally would close our Economic Forecast in early december. Its still open. I think were 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 were now going to overlay the budgetary impacts. It will be fully scored, in a sense, in our baseline. Thank you so much, director, and i yield back. Thank you. Next we go to the former distinguished chair of this wonderful committee, gentle lady from tennessee. My congratulate my friend and classmate in your new role. I wish you the best of luck. I also wang to thank yt to than hall, and your members of your staff for the hard work they do. I know the many, many hours you all spend. You have a very dedicated staff. However, i think it is good and healthy for us to have these hearings. And i dont 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 its healthy for us to have a discussion. And were not talking about whether we agree or disagree, were talking about getting it right. Thats 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 dont necessarily think is an accurate score is difficult for us. When we look at some of those scores, you know, they are off a little bit. I know the Economic Forecast 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 over of 3 or over. 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 dont really know that i understand exactly how you get these assumptions. The economic models are numbers. So theyre a little easier to do. 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 dont agree with the assumptions that theyre making on the behavioral side. For instance, on that was one of the bills i had about making sure our dollars under title 10 would first of all go to those organizations that dont provide abortions. And that 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 pregnantsies. And those pregnancies would result in more children being on medicaid. I have a real problem with the assumption that if one provider closes, that women arent 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. The numbers were so high, the policy is difficult because we have to pay for it. Thats where i have a problem. Is how we get to these assumptions that are behavioral assumptions. If you can talk briefly about that, i would really appreciate it. Sure. We try very hard to see what sho sort of economical literature is, how these things are working, whats likely to happen, what sort of data is available. On things what youre describing, it can be really hard to make an estimate. But we do as thorough a job as we can. You know, we when were looking at the health care providers, you know, how many are in regions where theyre the only provider . How many are in regions where theyre not . One of the things i think that would be always helpful, especially if its something you dont agree with, is we love the opportunity to come in and tell you how we got our numbers and how it happened. To be honest, if you feel like were missing something, if theres some research, literature that we didnt see, well take a look at it. 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. 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 youre 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 ive 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 even got to have an environment here where when were 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 we need to have more conversation on, mr. Chairman, and i know that as you move forward on additional hearings, that that may be also something thats talked about a little bit more. Many times you can accept what it is that someones saying or have that argument if we at least have the transparency. With that, i am right on time. I yield back, mr. Chairman. Thank you. To california, mr. Cabarjal. Thank you, mr. Chairman, and 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 wideranging impacts on the budget and the economy. Can you walk us through how you build that into your baseline . Well, sure. It starts, of course, with the Economic Forecast. And its a lot of walk through all the details of the bill, you know, of course, jct did the estimate on the legislation. But were 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 its 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. Theres so many steps on it. But we have a bunch of really dedicated people, a really good tax group in there. And were going to try to produce something thats understandable and is as accurate as possible. Do you ever have third Party Outside people that look over your analysises . Absolutely. We have a very good panel of economic advisers, they meet twice a year. They approve our Economic Forecast for us. We make a presentation to them. Theyll make comments. Theyre a diverse group. 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 well have discussions with them on aspects of the analysis or the forecast that were unsure of. And how do you go about sl d selecting those advisers . If you look at our panel, its up on our website, a panel of very, very impressive people, of from different schools. And we actually make an effort of people who have sort of a diverse background with respect, possibly, to politics. I dont want to we try to avoid that part of it. But we try to get people who have different points of views certainly on some of the things that we have to deal with. Have you ever gotten any criticism or objection from anybody on this committee about any of those advisers . Im not sure about this committee. I think not during my time, no. Weve been pretty transparent about who they are and that sort of thing. I havent heard anything. Thank you. What is the cbos best estimate of the impact on the recent tax bill on the deficit. I understand its 1. 5 trillion. That was jcts 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. So you dont have an estimate today . No, i dont. Okay. Do you know if the estimate that jct has put out there includes the compound interest over the next ten years . I think we did a version of that that included the interest. And what is that version number that you came out with . Id have to get back with you. It add add little bit more to it from the deficit. But i dont remember right offhand. I should know. I believe the number was 2. 3 trillion. But i appreciate i appreciate you getting me that information later. Okay, ill be happy to follow up. Thank you very much. I yield back my time. Thank you, lets go to minnesota, mr. Lewis. Thank you, mr. Chairman, congratulations, looking forward to working with you. Director hall, thank you so much for being here. Im perplexed at the other side of the aisles hammering of dynamic scoring. Its an model about a century old, and Alfred Marshall came up with supply and demand curves. No one doubts the elas tisty of if you were to ask anyone on this panel, if they were to wanted to reduce smoking, which we all want to do for our young people, whats the first thing theyd do . They raise the cigarette tax. Well, but prices dont have any effect on peoples behavior. Well, of course they do. And so this i understand youve got a very tough job. If i could predict Interest Rates or the super bowl winner, id 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 you have no control over, and would have to be a problem for some of your models. But lets get back to the baseline you issued last year of 1. 9 growth if we may. The atlanta fed came out with our First Quarter estimate 4. 2 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 principle parts. Productivity and people. Either one goes up, youll get more Economic Growth. Did you take into account from an Historical Perspective the increases of productivity when there is more capital invested, more incentive to invest capital, and why youre staking with 1. 9 , or at least a year ago, well see this year, but 1. 9 growth when were clearing seeing faster growth, at least right now . The productivity has been really slow. But we do actually have in our longterm forecast productivity getting back to its historical levels. Something like 1. 3 or 1. 4 . That is part of whats baked into that longterm growth. Its why it really is that labor supply part. How did you account for the gdp growth . Part of it is in anticipation of the tax bill, part of it is probably demand side because were getting stimulus. And we still think theres been slack in the economy. So theres room for sort of demand stimulus. Thats clearly a bit of whats going on. Thats an interesting point you make. Im glad you did. Thats really why some of us have concerns about this. We can go through the debate over kansian analysis or supply all day long. We had that experience. Stimulus package with the Previous Administration and we didnt get growth. Some of us would like to see more supply side analysis in there and restoring productivity and growth to quote a famous economist, john baptist, that supply will create its own demand. Isnt that a value judgment that the cbo makes that were going to use demand side analysis . Not really. Because i think certain aspects of any legislation is demand stimulus, and other aspects affect the supply side. So we dont assume at all that that supply side, that labor supply and productivity is just fixed. That, in fact, there can be policy things that affect that. Do you think you have a demand side bias . No. I think 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 parts just tricky. It is two different models, really, two different approaches. It certainly is. Its 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 around 23 million would be covered under the exchanges. Center for medicare and Medicaid Center said 10. 4 was the actual number. What happened there . Well, the first thing that happened was the Supreme Court decision that took away the requirement of the country that states expand medicaid. That threw a big kink into things. Once we corrected that, weve still been off a little bit. A little bit of talk about the exchange stuff, just really quickly, is a little bit of cherry picking. The most important thing was getting the budget effect correct. Ill cut you off. Ive got to go. Thank you for being here. Looking forward to a healthy debate. I would hope you understand that you were created by Political Branch of government, you serve the Political Branch of government, this is a political exercise, and so weve got to get the referee to make the most accurate call as possible. Thank you so much. I yield back. Thanks to the gentleman, and reference to his remark about the super bowl. There is one thing you can take to the bank, and that is the Minnesota Vikings will not be winning. Thats low. The super bowl. I miss chairman black already. Im going to hear from all the minnesota people now. Mr. Higgins from new york. 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, in 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, its not an exact science. And i guess thats why its subject to a lot of interpretation. But a couple 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 . The tax cuts generally pay for themselves. Do you believe that . I want to be really careful. Because different tax changes have different effects. Some can have an effect on supply, and some on the demand side. Okay. I think the literature, we need to look at the literature, and how things have been affected going for. And were going to have our own estimate of its not a its not an effect of just the bill, but were going to work the tax cuts into our Economic Forecast. So youll see how we view that particular bill. I appreciate your cautiousness. But i would remind you that theres 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 advisers came out with a report saying that the Corporate Tax cut would result in increasing annual Household Income. Im not talking about a onetime bonus. But annual Household Income of between 4,000 and 9,000. Do you believe that . I havent read that report. But i can tell you we will have our own analysis, independent analysis of the effects of that. But youre familiar with that report . Im not really, to be honest. Youre 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 sure. 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 six months. Im shocked that youve never heard of that. I can toell you in a few months time we will have our own analysis and our own view of that and well be very careful to explain why weve come up with whatever estimate we come up with. 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 a sum of a trillion dollars in infrastructure through the contribution of state and local contributions and the private sector. All of us agree that Infrastructure Investment is desperately needed. I would remind people that the 200 billion is woefully inadequate. 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. Theyre 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 . Give the witness about 20 seconds to answer. Okay. Really quickly, we are prepared to analyze any proposal that comes forward. Well do it carefully and in detail. I do not want to make recommendations. We dont do that. Thank you, sir. I yield back. Next we go to the keystone state, which could produce a super bowl winner. Mr. Smucker. Thank you, mr. Chairman, yes, thats one other given. One thing we know that philadelphia will be there. Thank you and congratulations. Dr. Hall, id like to thank you for the work that you do and the work that your staff does. I have some comments, some have already been addressed. But id 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 its 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 know 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 decisionmaking. And it changed the dynamic of dramatically 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 health care, but we cant 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 your 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 youve come to congressional offices if they request at any time. But i think an Important Role of 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 . Yes. The only time that i think i shy away from that is i dont want to talk about legislation as being debated. I dont want to get involved in the political process. But otherwise, yes, absolutely. Have you ever brought members to your facility . Yes. To show us the operations . Yes. And youre thats something id like to do at some point. Youre welcome to come over. Weve talked about the theres been a lot of discussion about the importance of being nonpartisan. I think its equally important that we can believe that we have the best thinking out there in regards to policies that or in regards to your analyses. And we know that predicting is tough. And it reminds me of a quote thats 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 were looking at . Absolutely, i do. I think we get people who are very smart, 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. One of the things 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 how do you choose those experts . Well, part of it starts with our panel of economic advisers. We have a really good panel. Theyre all very well smart, connected people. And we do a lot of calling and say, well, heres our topic were concerned about. Who should we talk to . We make an effort to get literally we get opposing views. If you look at some of our Analytical Research reports we put out, youll see us list the names of the people who reviewed it. We treat it like its a journal article. We try to multiply ourselves. Im running out of time. Im sorry to interrupt you. I have a number of other questions. Uni wanted to get to, the cbo was first put into place 43 years ago. What can we 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 and more efficient in its operations . You cant answer that now, i think. But id love to hear from you at some point if you have specific ideas or recommendations for updating the act and improving your operations. Sure. Thank you. Schakowsky from illinois. Thank you, mr. Chairman. I also want to associate myself with the comments and the questions of mr. Smucker. Were 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 childrens Health Insurance program. In fact, the new estimate showed that reauthorizing chip for ten years would save the government about 6 billion. So why did passage of the gop tax bill change the chip score so dramatically . The elimination of the mandate had an effect. One of the short versions is, the elimination of the mandate, we think, will raise the average premiums and exchanges. And since if children arent covered under chip, theyre likely to be covered under exchanges through medicaid, then it will cost the government more by having children covered that way as opposed to chip directly. 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 . I wouldnt word it that way, but it is an effect of the mandate. 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 . We estimate that after ten years the number of people covered with insurance will be reduced by about will be down by about 13 Million People, relative to the baseline. And that premiums would be about and exchanges would be about 10 higher at the end of that time period. And what about the administrations decision to end costsharing reduction payments, the aca outreach budget by 90 , allow work requirements for medicaid, were those part of that calculation as well . No, no. Weve treated the costsharing reductions actually as an entitlement. So at least so far, until we get other direction from the Budget Committee. So since it was an entitlement. It wasnt affected. Beyond the tax bill, how does the cbo account for the administrative action that changed the implementation of the aca . Thats difficult to estimate. It was with the aca because there was a great deal that has 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 didnt happen so well. And so weve update we update every year, we update our estimate of the operations of the exchanges and that sort of thing to take that into account. Was there krrconsideration o the fact that there was reduction in the amount of publicity, of telling people about it, a shortening of the Enrollment Period was that part of the calculation . It will be. Its been a while since we updated it. Well do that this spring, well talk about that and see if we think thats something some really solid impact that we can measure. Thank you. Is the cbo updating scores of other Health Legislation following the passage of the tax bill and the chip reauthorization . Yeah, there are some proposals out there. We would if were working anything, it might be Technical Assistance in which case i cant talk about it. But if were asked to update any of those by the committee of jurisdiction, well do an update on those. So you initiate, or are you always responsive to inquiries from the congress . We dont initiate very much at all. We respond. And that goes for the administration as well . Or is it no, im talking about looking into acts of the administration, executive orders, et cetera. Okay, sure. No, we actually every year we go down and look to see if theres been changes in implementation, whether its 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. Well try to detail it in our budget outlook report. I appreciate your work, and i yield back. Thank you, ms. Schakowsky. Go now to georgia, mr. Ferguson. The witness is yours. 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 time with you and your staff in their offices, or in your office, really talking about the process. 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 fiveyear window in the budget process. It doesnt matter to me where it is. 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 ten years later. And do that to the second year, and go out another ten years, and third year, and all the way out year five. Whats the accuracy at the tenyear mark . When were making a decision on budget, were making it on this tenyear budget window. So if you go back historically, whats the accuracy at ten years from the date that this Budget Committee acted on those recommendations . Or those assumptions. This past year we looked at our record for estimates outlays. Its in kind of broadish categories. It gives you an idea of the average error. We looked at it at the budget year and then we looked at it six years down the road rather than ten years down the road. After six years, our average error was about 3 . 3 . 3 . That means for individual smaller parts, some could be higher or some lower, but they averaged out to be about 3 error. Were making decisions on a tenyear window. Right. Which is where it becomes harder and harder the further you go out to predict. Correct . Maybe when we update this report well consider trying to do it for a little bit longer. Let me say, i would encourage you to do that. Because i think its important, if were going to make decisions based on a tenyear assumption it does us little good to have six years worth of historical data. Thats kind of were missing 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 get to close that gap so that you can become because 3 may not sound like a big number. But, you know, when youve got a 4 trillion budget hanging around, thats a pretty big number. Right. What do you need to be more accurate in that . Thats a good question. We have a lot of challenges. One of which is that we have so much more work than we can handle. But thats not really an issue of being able to just throw resources at it. We suffer from a real peak load problem. When Health Care Gets popular, our Poor Health Care theyre not poor, because they energized by this. Theyre working fulltime. Can you talk very briefly about maybe developing, or should we consider developing a new model for scoring that maybe you know, were in this debate right now, demand side versus supply side. You know, youve heard it here today. But, you know, do we need to look more at what the private sector does using predictive algorithms to anticipate changing Consumer Behavior . I think the private sector does that in a very, very effective way . Should we look at doing that more here or your office to give us a better outlook . We could. 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. 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 tenyear accuracy. Okay, if were going to operate in a tenyear budget window, we need that tenyear data. Thats important. We need to see what those outlying years are actually like. And then to look at look at different modeling programs that use predictive algorithms to look at Consumer Behavior, and how that may change these budget outlooks. The final we i want to ask you, its something when the gentleman from pennsylvania spoke, mr. Smucker, and it was asking about your hiring process, and you said you said we try to get people with opposing views. Define the view and the opposing view. Sure. By that i dont mean in our hiring, but in our consultations with folks. If its a topic where we know in the literature theres some debate in the literature. This has a big effect, this has a small effect, they focus on Different Things, thats the sort of thing well look at. Our real goal is to represent the state of research on a topic. And, you know, sometimes theres not full consensus on a research topic. So thats where we look for that sort of diversity. So the view would be process by you would have a demand side view and a supply side view . I know thats a broad yeah, it would be Something Like that, thats right, thats right. Okay, thank you. Mr. Chairman, i yield back. I thank the gentleman. Lets go to ohio, mr. Johnson. 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. Mr. The floor is yours. Thank you very much. Again, congratulations on your chairmanship. This is your first hearing. And i think its 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 really dont know how to frame this question that i have. But ive 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 theres an element of science and an element of art in the work that you guys are doing. That there is an element of subjectivity and objectivity. Some fact, some assumption and speculation. Im 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 here about the need for budget reforms. Because weve got a budgeting process that doesnt work. Weve 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 were potentially getting ourselves into . Were certainly willing to talk about ideas that you have. One of the things that we actually have coming out, ive talked about documenting models. Well, were trying to also document our processes. We actually have a document coming out that says, heres the process that we go through in creating a cost estimate. And you see here are all the steps, heres what we do. Thats a transparency thing. So you can at least see exactly what we do and the process that we undergo. And to a degree it gives you ideas how we could do that differently or articulate the results differently a followon question. You just said developing a cost estimate. A cost estimates not the only thing that we need. I mean, we need to understand the longterm implications on the cost side certainly, but on all of the other unintended or unplanned consequences of legislation. So how do we get to that part of it . So that we have a clear picture of what legislations going to do, not just the cost, but the longterm. I think when we do cost estimates, in fact, we were just talking about this hate bit. We have, you know we have accuracy, how much time do we spend with it to where were 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, provide transparency. Those are three things that conflict with each other quite a lot. I always thought i always think that the more time we have on an estimate, be able to do the work and do it carefully, we can the better our estimate is, the more precise we can make it. You know, and 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 cant get all three of them at the same time. Higher qualitys going to cost you more, take more time. If you want to cut time, youre going to sacrifice quality or youre going to spend more money. Youve 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 to get these things scored. And its a critical part of what we do. And as my colleague from georgia mentioned earlier, the politics of it is crazy in todays 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 . Ten seconds to answer. Id 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 think about in this piece of legislation . That Technical Assistance takes up a ton of our time. But it seems to be really valuable. Theres a reason why they come to us to help with that. Mr. Chairman, i do yield back and i apologize for running over. Thats an issue that weve got to address, i believe, as we talk about budget reforms and oversight of cbo. Theres got to be a clear understanding of the process and what theyre doing, how much time they take to do it, whether they have the resources to do it or not. Because it has such serious implications to the work that we do here. Thats what the oversight hearings are about. Were going to have three or four of these. So more to come. Gentleman from indiana. I thank the chair and congratulations, 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 theres a lot of things going on. I particularly remember the Health Care 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 staffs work on Technical Assistance is given to Committee Staff or committees, versus personal offices . Most of it is committees. Right, okay. Thats actually true when we do help personal staff, it tenths to be technical help. Because individual staff, they dont have im sorry, individual members, they dont have legislation thats out of committee. So its not typically a formal estimate. So again, what percentage of your staffs time is used with id have to look into it. We probably do 350, 400 informal estimates for individual i appreciate that in writing, as we go through this debate, understand where you guys are spending your time. You talked with mrs. Black about behavioral assumptions. And how you looked at available literature. And you offered the member of greps 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 . I appreciate that question because thats one of the things that we do when we get some legislation. We ask the Committee Staff, whoever gave it to us, is there some data you want us to look at . Okay. Some research youd like us to see . You were not made to wait, members of congress are not made to wait absolutely not, we want to be sure were looking at what youre thinking of. I appreciate that. When you talk about the economic advisers and the Health Advisers that you have, i want to focus on that process a little bit. You say you use these economic advisers to multiply, quoteunquote, your ability to understand whats going on in the world. What is there objective methodology you use in selecting these people . No, to be honest, its literally a directors choice to sort of look at the makeup of the committee and think about whether we want some little strength in one area or another area, to think about whether we have the right kind of balance. How do you ensure, absent any criteria or objective methodology, how youre not creating a little echo chamber for yourself or your organization . Best i can say is we put the names of everybody up on our website, you can take a look through the panel. Yeah, ive been give you an idea. Ive been looking. Honestly, while i can determine perhaps some of their natural bias or professional bias based on the organization they represent or work for, i dont 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 . Absolutely. We do look through their work, we do thats what im asking. When i ask you objective methodology, you responded and said, its kind of directors pick, we look to make sure that in your mind it looks great. Is there any objective methodology or criteria or process that your Organization Goes through . 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. Right, but you understand, sir, if you dont have an objective methodology, if you dont have a set of published criteria for how youre picking these people, you risk at least the attack, if not the reality, that youre creating an echo chamber unto yourself. That if youre using these advisers 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 see on a given bill. My suggestion to you would be, lets make this process more transpare transparent. Its a great start to have at least the names of the people on a website. Lets publish, lets create and agree on in a bipartisan way a published set of criteria or methodology you might use to select those people. If in fact theyre informing your work to such a degree. Let me be clear. I mention those folks because they help sort of keep us balanced. We make our own decisions. We make our own just a minutes. We try to help inform our own judgments. But i dont want to suggest that theyre making decisions for us. Im 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 your work. Which i think is healthy. Assuming that the panel is healthy. I yield back. All right, thank you. Mr. Bratt, virginia. Thank you, mr. Chairman. Thank you, dr. Hall, for being with us. I have four questions i want to get to real quick. I used to be a liberal arts professor and sometimes whats missing in this city is a systematic connection between pieces of knowledge. And so my friends over there, johns a nice democrat friend, i like all of them, theyre very smart, intelligent the way they ask questions. We have the chicago economist up here, they were asked bus the tax bill pay for itself . And the economist correctly said, no, probably doesnt, probably pays for maybe a third, right . Then you get into current law versus current policy, also may give a third. Then the key question is, no one really cares about does the tax bill pay for itself. I care. Does the economy pair 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 thats what i find missing. And even when you score, the scores always at the federal level only. It doesnt include state and local impacts. Which also has a huge impact. I think state and local revenues are about 40 of federal. And so if you abstract away from this, it becomes politically misleading, even though you dont intend youve been asked a narrow question, does the bill pay for itself . How do we get at truth in its totality to avoid the politics . I do want a truthful outcome, when im making decisions on that question, how do you think about that quickly . Sure. No, i think its one of my points was we adapt to what Congress Wants. If theres Something Different that you want that we can do, were happy to talk with you and try to work it out. Okay. Then its on us. I mean, im interested in that. Because if you look at the fed, the fed forecasting was just horrendous after the 08 recession, part of it they were cheerleading, i dont blame them. Left side rosy scenario and it instead of got there. Youve got a problem when you can guess the direction of the error, year after year after year. Second big issue thats coming our way in terms of just had the budget debate, the csr bailouts, subsidies, et cetera, what is the assumption of cbo on the score there . Are those President Trump ended the csr payments. How is that going to be scored . As if hes ending them . Or as if hes continuing them . Weve been treating it as an entitlement. Okay. So its remained there. Unless we get direction to do Something Different. Okay. So rear assuming essentially the money will be found somewhere because its an entitlement. Right. That brings us back to the whole Health Care Debate and the score there, again i just dont feel like we got a systematic account, right in charlottesville. 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. Thats not sustainable. So we would love your economist to say, hey, the way youre going, the economics are not sustainable for health care, in addition to showing us the merits of technical bills. And the big programs too. Medicare, Social Security. Ill just add one other piece thats interesting to me lately. Immigration is a huge issue coming our way. Were all debating that. And so have you guys done any scoring on the total cost of illegal immigration yet . No, we havent. So thats how do we get these folks to preempt, right, these studies take long period of times to do. And so its a major issue. So thats just our can i request that . Or at what level will the request be acted on if we ask for a score . I tell you what a good starting point might be is, id be happy to talk with folks and we can come in and talk to you about how we our take on the literature, what literature is out there, what it says about immigration and the effects, give you an idea where we see things at the moment. Then whether or not you want us to do some work. Right. And i dont want to get political and whatever. But it is pretty well known in academia i came from a small lib rat arts college. You can go around the country and look at the makeup of faculty, who they donate to, the politics if you go to harvard, yale, princeton, the overwhelming political its not bad, its a free country, you can be any party you want. If you dont 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. So were trying to get at and that includes even kind of a bernie kind of thing, a populist thing over on the left that ran through the country. Im just curious your response. How do we track that . Let me give an example of a challenge for us a little bit. I think we handle it pretty well. When we looked at the effects of minimum wage. Ton of literature on minimum wage. A lot of it has an agenda, a lot of its not very good. We do a lot of sorting through, not who the people are, but sorting through the research. What was good research, solid research, what wasnt. Culled that down. And focused on things. So it was the actual work that we try to focus on. Right. And that was really what got us down to where we had somewhere to go. And i think thats sort of how i think about the people we talked to. Which i let the research speak for them. Right. Whats somewhat missing is the normative aspects of economics. Right . We try to abstract from that. Act like were doing objective social science. When its very hard to come by that. Am i already over . Yes. Sorry, i thought i had 28 left. Mr. Chairman, thank you very much for running the hearing. Thank, mr. Bratt, for your commentary. We have two that have joined the dais. Miss jackson lee, you can be next, are you prepared . Miss jackson lee from texas. Thank you, mr. Chairman. And congratulations to your position. And mr. Yore muarmouth, ranging member. 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, inasmuch 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 . Absolutely. I recall being here 1997, in actuality it was the budget resolution 1997 that created the childrens Health Insurance program. Im not sure if you were on staff or you might be aware of that. But good things can come out of a budget resolution. Weve offered to save lives. Allow me for a moment just to create the atmosphere very quickly. Unlike in a dictatodictatorship autocracy, or monarchy when the king is law, in a constitutional democracy such as the United States, the law is king. You can judge the soundness and health of a constitutional democracy not by the physical health, the Mental Health of a chief magistrate, but the vitality, robustness, strength of its critical institutions. Disparaging and distrusting the intelligence committee, he learned that the finn was investigating this russian interference, with 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. Special counsel mueller was appointed to take and oversee the russia trump investigation, the president and his republican acolytes in congress began a campaign that continues to this day of obstructing, disparaging, and trying to discredit. Here we are now looking at an institution that since 1974 has in a nonpartisan manner done the work that it should do and we are being disparaged and litmus tests of who voted for whom. I would just ask the simple question, as youre looking at talented analysts, others with ph. D. S and masters, do you ask them to show you, first of all, the Voter Registration card . Absolutely not. Then since we dont really have registration parties or at least not in my state in texas, do you ask them what Political Party theyre in . I do not. As you continue discussion to oversee the ballots, excuse me, the work that you do, i assume teams are called together of expertise and theyre analyzing. In that discussion do you ask who you voted for for president of the United States . No. Would that be the appropriate guide in which you make your determinations for the very important work that youre doing . Absolutely not. So let me proceed on this. Is this a document that you have produced . Yes. Ten things to know about the cbo. Thats right. Number one, lawmakers created cbo to give the congress a stronger role in budget matters. Is this a political statement . I hope not. Well, i mean, did you intend it to be a political statement . I did not. Number two, the Congress Sets the cbo priorities. Did you intend that to be a political statement . I did not. I ask unanimous consent to put this statement of the cbo into the record. Without objection. Thank you. Let me ask specifically points, the recent tax bill made substantial changes to the tax code that would have wideranging 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. What is cbos best estimate of the impact of the recent tax bill on the deficit, and do you do this in a nonpartisan way . If you can remember the third question. Why would you explain why the scoring of a simple c. H. I. P. Extension changed after enactment of the tax bill . Sure, okay. The process, the actual tax bill itself was scored by the joint committee on taxation. Were required to take their estimate and put it into the estimate. But when we do our baseline, which were working on right now, we will fold in the effects of the tax bill. May i pause you because of my time. Can i get that in writing . Sure. Would your staff remember that . Let me just to this question. Is this tax deficit going to have an impact on the budgeting process of the United States . Do you mean the the tax bill being passed, creating a 1. 4 trillion tax deficit, is that going to create an impact . Sure, it will likely change our forecast for the next ten years or 30 years. 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 aging population. Full employment or the opportunity for people to work increases the engine of the economy. Suppose, just speculate, dreamers were able to work or younger populations, does that drive the economy . The effect of any of those thing on this the labor supply is part of our analysis. All of that plays into it. Yes. And you make the analysis fairly without any attention to political yeas or nays . Thats correct. I thank you. With that, mr. Chairman, i happily yield back. Thank you very much. Thank you, miss jackson lee. Growthen, wisconsin. Thank you, sir. I decided to save the best for last. Understood. Ill give you a couple questions kind of off the top. I dont know if this has been asked already. What time every year do you come out with your estimates as far as future revenues or future revenue estimates . We do our first baseline analysis typically around this time of the year. Were going to be delayed because were working in the tax bill. Okay. Id like to ask you, because theres a feeling that the Business Optimism may have changed or added to towards government may have changed when President Trump was leaked. 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 . No, i dont think we do. But i certainly dont have them in front of me, im afraid. Okay. Are they available yet . If they are, we can get them to you. Well go back. They probably are. Well look at the Third Quarter. Okay. Do you have the receipts for the Third Quarter of 2017 . Im sure we do. Do you know whether those were higher or lower than your estimates were for the prior year . At the time we originally came out with an estimate. I dont know offhand. Every quarter we produce a little document that tells you how we are doing with receipts. You dont know whether it was above or below projections . I dont offhand, no, im sorry. I want to like you a lot. Thats usually a big deal. Okay. Well switch gears. That just kind of amazes me. Well switch gears a little bit. You have said that you want about a 9 to 10 increase in spending next year over last year, is that true . Oh, yes, thats right. Thats right. Right. And youre not alone in that. Right. I mean, everybody thinks the problem we have in this government is were not spending enough money, so im not going to single you out for that. Youre apparently right now spending substantially more than in president bushs last year, correct, than eight years ago . Im sure thats true. Right. So given that substantial increase, i 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 eight years ago . Thats right. Were trying to respond to congressional interest in speeding up some of our estimates and in providing more transparency. And if were going to do that, we need more staff. You think congress is asking a lot more questions than they were eight years ago . You really feel the demand maybe it is. The demand for your services is much greater now than it was eight years ago . I wasnt around eight years ago, im sure its true, actually. A lot of the transparency stuff is just not free. We have to take time to do that, we have to something has to give. Okay. You right you have 233 fulltime employees . Is that true . 233 . How many employees do you think you need to adequately do your job . I think were fine adequately doing our job now, but if Congress Wants more from us, we have a plan to increase staff by only about 20 people over the next three years that we think will enhance right now you feel you have enough people to deal with inquisitive congressmen . Youre worried more about the future . Well, let me put it this way. Since ive been in the job, we have way more work than we can do. And so we just have to prioritize things. 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, were working very hard allout on similar work for a committee. And its just a matter of resources. Okay. You think sometimes congressmen ask dumb questions . No, no, actually. No, i dont. 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 youd do with it . Thats right. Also some of it is increasing cost of doing business for us. Which includes cost of living raises for people. Okay. When you dont get money for cost of living, you may have to go down a couple of people. Okay. Okay, those are all the questions. Ill yield the remainder of my time, thank you. 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. Yarmouth. Thank you, mr. Chairman. And its been an interesting session. Ive enjoyed the conversation. So thank you. Dr. Hall, thank you for your testimony and your responses. Theyve been very cogent and appreciate them. And i also want to add that ive been the beneficiary of it from you and your team, very, very valuable, ive 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. Witall who talked about not knowing not having a sense of the bias of the leadership of the cbo. And i will say that in the i think six 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, 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 naekted, the cbo cost . We havent in large part because it varies so much. It can be a piece of legislation changing the name of a building, or it could be something weve worked on for 18 months. Right. Just because mr. Gotman asked the question, in this document you provided it says that in 2017, you did 740 reports. Do you have any sense of how that has grown maybe just in your 10 youre . Tenure . Yeah, were probably 100 or so above. In some respects its 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, were up to Something Like 10,000 of those. A lot of work. Give you an idea. A lot of work. I think it was mr. Menacy asked you a question, you were responding about going back to the aca. The situation with the exchanges. And you were cut off. Would you want to continue to make that it was an explanation of what was happening in the explamplgs, how that might relate to coverage and cost. Sure. One of the points i certainly want to make is, while we wanted to to get get an estimate of the exchanges correct, more than that, we wanted to get the budget impact correct. And so weve 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, included the exchanges. Its a bit more of a complete look at things. And then one of the real challenges, of course, especially with the aca, implementation was such an important thing. And we wind up we do what we can. But we really kind of wind up assuming that implementations going to be about average. About the same as other pieces of legislation. And that doesnt always happen. I dont want to spend too much on health care. 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. And 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 health care costs. Have you ever has the cbo, to your knowledge, ever done a score on the benefits of Preventive Care . 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 revenues, increased revenues from better health. That had a real impact. You had an odd, in terms of spending, it had sort of an odd counter, right . Because the cigarette tax, we reduced 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 theyre living longer. So that was an odd thing there that sort of balanced out the spending, which is an odd part of what we do sometimes. Right. But inside the budget window, thats probably not going to be as great an impact i wouldnt think. In terms of pure printive care, the ability to go have checkups annually without copays or so forth, has there ever been a score done on those types of initiatives . Yeah, i can look, see if weve got more examples. The tax model was just really obvious. Sometimes the Preventive Medicine stuff is hard because theres not as much evidence as wed like. To sort of base the base the analysis on. Moving to another question. I was struck, and ive talked about this. The idea when cbo puts out a number, like 23 million, automatically that gets used for political purposes, but it gets kind of in concrete in the publics mind. Has the cbo contemplated, and maybe this is a restriction we 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 is that people actually rely on for arguments, when in fact nobodys ever going to be accurate, exactly, and the range might be more useful . Well, my starting point is, its a Budget Committee thing. The point estimate is used in enforcement. The Budget Committee needs a point estimate. So we try to characterize uncertainty as best we can. And sometimes we can put in ranges. But thats hard to do. To me, so much uncertainty is unknown unknowns. Are there any other could you walk us through maybe some of the other requirements that are ider in statute or otherwise that affect how you develop the baseline and score legislation relative to that baseline . Theres quite a lot. You know, for example, how we treat Social Security trust fund, et cetera. Were directed to assume that pays out, rather than the trust fund cuts off benefits. You know, when we forecast discretionary spending, we arent 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. So that kind of goes to mr. Bratts comment about, its on us to actually deal with some of these. Just want to talk a little bit about something that im obsessed with, and thats the pace of change in society and how that complicates a lot of policy making, not to speaking of your role. I remember when secretary geithner used to come before the committee, one time i asked him, we were talking about 30, 40year projections. I asked him how reliable he thought 30, 40year projections were. He said, i dont think any projection outside five years is reliable. The pace of change in the world has only quickened since then. I was reading the other day an interview that was done with the managing director of mercedesbenz. He had unbelievably disruptive predictions about what was going to happen in various fields, transportation, energy, education, the legal profession, within the next ten years. And they are things that, for instance, basically the cost of electricity, because of reduction in the cost of solar power, going to virtually zero. That obviously has huge implications. Reduction actually, 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 selfdriving vehicles. A lot of these things are happening. My question is, is that the kind of futuristic thinking, is any of that done in the cbo . You dont have any futurists on staff. Might that be helpful . We need them in congress, i know that. Actually, i rather like what we do. Unknown unknowns. But we can look at things like productivity. Historically, productivity is ranged about 2 percentage points. You go back and look at labor supply. How is that ranged . Historically. We can then put those into our longterm forecast. We have a point estimate, then we can vary those important variables by how they varied in the past. And give you some idea of the direction were heading. And of course that doesnt tell you about the real outliers. It does give you some idea historically how much variation weve had, what does that mean for your forecast . I thank you again for your work, your service, your appearance here today. I yield back. Thank you, mr. Yarmouth. 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 assess the org structure, if you will, of the organization . We certainly think about it. We certainly we had a little turnover in the heads of those divisions. I think more than half of them have have been replaced over the last three years because of retirements and et cetera. And when that happens, we do think about do we have the right sort of organization . We do think about that. We havent 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 product area. Our production. Our program analysts, 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. Theres a tendency for them to be apart. Thats a function of our organization. But youre not afraid to get outside the box . No, no, not at all. Okay. Just a couple of words about joint committee on taxation. Do you guys have a i realize theyre on the floor i guess right above you. Theyre probably watching. So youve got to be careful with your answer. Do you have a really Good Relationship with them . Is it a good collaborative relationship with them . I think so. I think, you know, we have pretty distinct, clear roles. And theyve been very patient about helping review some of our stuff. We certainly worked well together, i thought, through the health care. All those health care estimates involve the joint committee from time to time, because of the makeup of your organization, are there discussions that go on between this goes back to my collaborative question. Are there times when your folks in cbo might think differently about something coming out of joint committee on taxation . And are they free to exchange those ideas in hopes of getting a little closer to the truth as we all want to know . I think so. I think the biggest room for improvement is that if we were a little bit more transparent with each other. You know, i dont think we know a ton about their model, i dont think they know a ton about our model. We do manage to Work Together. But i cant think of instances where we did any sort of secondguessing on what theyve done. I dont want you to speak for joint committee on tax. But since the passage of the tax cut and jobs act, there have been number of companies and businesses, large and small, that have made significant decisions about how theyre going to take this windfall, real or perceived, and how its going to impact downstream the people that work for them. Bonuses, raising minimum wages, inputting more resources into retirement plans, those kinds of things. I know theres 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 . I know weve had some discussions about it, you know, from our look at the forecasts with the tax cut in it. Weve done some going back and looking to see how consistent is this with what weve seen . With the initial reaction to the tax bill. I dont think we have anything thats been dramatically different than we expected. And hopefully well try to talk about some of that when we release our budget outlook. And to be respectful of your time, my last question is, the uk 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 modeling 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 youve 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 dont, have you considered using Something Like that and sharing that with the congress . Yeah, you know our confidence and our uncertainty is sort of mixed into our work. But thats an interesting idea. We have had some interactions with the british equivalent. I think it would be worth our sounds like it would be worth our time to take a look at what they do and see if we can get good ideas from them. If its something you all think is valuable, wed love to figure out how to do it. Very good. Dr. Hall, thank you for appearing before this committee today. I want to advise members, 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 seven days. With that, this hearing stands adjourned. The Justice Department will hold a conference on Human Trafficking with attorney general Jeff Sessions and Homeland Security secretary kirsten nielsen. Live coverage starts at 9 00 a. M. Eastern on cspan2. In the evening Actress Rose Mcgowan discusses her new book brave on her experiences working in the entertainment industry. Live coverage begins at 7 00 p. M. Eastern on cspan2. This weekend on American History tv on cspan3, saturday at 8 00 p. M. Eastern, lectures in history. University of North Carolina at chapel hill professor Molly Worthen on 20th century fundamentalism and the origins and growth of pentecostalism. Fundamentalists are conservative protestants who militantly opposed, militantly opposed, mill danmill dance is important, new ideas about the bible, science, and society. At 10 00 p. M. Eastern on real america, the 1989 documentary island of hope, island of tears. Over 12 million men, women and children passed this way. Passed through rooms and corridors haunted with a special stillness which remains only in places once noisy with human life. They bought tickets for a thousand places in america. They traded their drachmas and lires for dollars. They sang their First American songs. Experienced their First American christmas and ana cau. Here they waited to be given permission to pass over to the new land. Sunday at 10 00 a. M. Eastern, an interview from the west point center for oral history with katherine westmoreland, wife of u. S. Army general william westmoreland, who commanded u. S. Forces in vietnam. My main work was red cross. And i did really worked almost every day, i worked in the vietnamese hospital. And the our hospital. Then i went to netrong once a week to do red cross work. Watch American History tv every weekend on cspan3. For nearly 20 years, in depth on book tv has featured the nations bestnope nonfiction writers for live conversations about their books. 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