On Thursday, the new leaders of the House, Speaker John Boehner and Majority Leader Eric Cantor, criticized the Congressional Budget Office for a preliminary analysis that repealing ObamaCare would cost $145 billion through the end of the decade, and $230 billion by 2021. Last week, Mr. Cantor even accused the CBO of outright "budget gimmickry" in its calculations last year on the supposed "savings" that would result from ObamaCare.
Speaker Boehner and Majority Leader Cantor are right to doubt CBO's analyses of ObamaCare's budgetary impacts. The Congressional Budget Office has a long, inglorious history of large-scale, massive errors in its scoring of budget proposals. In August 2001, economist Alan Reynolds wrote with details of CBO's many blunders in estimating deficits and surpluses - an excerpt:
In 1993, the CBO predicted that the deficit would soar to $653 billion in 2003. This week, they said that same budget will be in surplus by $172 billion. Little of that $825 billion revision can be explained by legislation or luck. Nearly all of it reflects the magnitude of past forecasting blunders...
Past forecasts often overstated deficits by huge amounts even for the current year -- by $78 billion in 1992 and $102 billion in 1997. In early 1998, the CBO thought the next year's surplus would be $2 billion, but it turned out to be $125 billion. Looking further ahead, CBO errors have been staggering. Next year's budget, now estimated to be in surplus by $176 billion, had once been expected to show deficits of $579 billion (per the CBO's 1993 forecast), $349 billion (1995 forecast), and $188 billion (1997 forecast).
CBO's comedy of errors extended throughout the decade just ended. Liberals complained back in 2001 about CBO's "risky" and "guesswork" projections as the basis for the Bush tax cuts. A more recent analysis of CBO's budget projections and the actual results shows how inaccurate the CBO has been throught the past decade. Last August, the CBO tried to please both sides in the tax cut debate, predicting that extending tax cuts would provide a short-term boost in GDP, then flipped-flopped and predicted extension would "reduce long-term economic growth." These guys are truly unbelievable!
So it's inconceivable that a new House Republican committee chairman would (1) ignore the history of CBO's enormous mistakes, (2) defy his own leadership, and (3) depend on a risky CBO analysis as the basis for abridging our 7th Amendment rights. Yet Judiciary Committee Chairman Rep. Lamar Smith is doing just that, announcing that he'll try to stop Americans from filing lawsuits in state courts over medical malpractice. And he's aiming for achieving a CBO estimate of $54 billion of "savings" in health care costs. How the CBO reached its estimate is another example in a long line of mistaken assumptions and miscalculations that we've seen from CBO over the years. I'll discuss that estimate in another post in the near future.
Meanwhile, there's no question that the House Judiciary Committee Chairman is using CBO's risky guesswork, thoroughly discredited by history and disowned by the Chaiman's own leadership, to enact federal law which would impose limits on our Constitutional right to take our malpractice claims before a local jury of peers. It would also violate any notion he might have of promoting and protecting the sanctity of state courts from federal interference.
Chairman Smith's announcement is in open defiance of House leadership and a repudiation of their criticism of CBO's methodology. Will Speaker Boehner and Majority Leader Cantor let their committee chairmen set policy based on CBO's "budget gimmickry" while selectively condemning it? If so, they will look like hypocrites, lose the ObamaCare debate and also the high ground in battling the deficit.