More On That CBO "Report"

After two days of complaining by commenters at the Swampland blogs K Tizzle finally decided to weigh in by linking to an expert in federal spending, former staff director of the House Appropriations Committee Scott Lilly, and his view of the partial analysis of President Obama's economic stimulus package by the Congressional Budget Office which has been sold as a "report" by WingNuts and Villagers alike. Guess what he found...

Projecting this “spend out” is a task requiring the weighing of numerous variables as well as the exercise of a considerable amount of subjective judgment. In the end, spending forecasts are subject to most of the uncertainties contained in weather forecasts, economic forecasts, and even Super Bowl predictions. But what is clear from the leaked analysis (and will probably be evident in the official version soon to be available) is that the watch word of this stimulus effort—“shovel ready,” meaning ready to be spent now—does not correspond to any key on the keyboards connected to CBO computers.

Hmmm imagine that.

It is particularly hard to defend the CBO forecast on the flow of “shovel ready” highway funds. The projection for the flow of highway funds from this package is much slower than the projection made by CBO for the flow of funds under the same program only four month ago in the stimulus package Congress attempted to pass last fall. CBO predicted 77 percent of that money would flow out of the Treasury in the first 24 months. Now they are projecting that only 45 percent of highway money will flow over a 24-month period.

Whichever figure is correct—if either prove to be—the disparity between the two estimates seems to demonstrate that CBO highway estimates will have been seriously out of line at least 50 percent of the time.

Ok, but what about worst case scenario and the partial analysis is right.

But what if CBO is right in its current forecast? What if many of the appropriated funds in this package do flow more slowly than federal and local officials anticipate? The first point that needs to be considered is that the $355 billion contained in the Appropriation Committee portion of the package represents only 43 percent of the total package and virtually all of the slower spending programs.

Nearly all of the remaining $470 billion, which will be made up of tax cuts, Medicaid payments to states, and unemployment benefits, is expected to flow from the Treasury over the course of the next 12 months. The $108 billion contained in the appropriation segment of the package that CBO projects to be unspent at the end of 2011 totals only 13 percent of the total package.

And as for the CBO itself? He doesn't mince words.

As for CBO, I find their efforts with respect to this package disconcerting. The Constitution delegated the making of budget policy to Congress. When the Congressional Budget Act was passed 35 years ago, CBO was established not for the purpose of transferring that responsibility from Congress to a team of experts but for informing the congressional deliberations with philosophically neutral, well-informed, and fact-based analysis—analysis based on a continuous and thorough vetting of all relevant information and points of view.

While CBO is certainly “where the action is in federal budgeting,” as it boasts on its website, I am not convinced that they have met the standard for analysis that should be expected of them. The incoming director needs to carefully review these projections and insure that CBO protects its reputation for quality and objectivity

Now K Tizzle doesn't fancy herself a media critic and she is loathe to take her coworkers to task, but at least she took the time out to post on the issue and give the Swamplanders the truth. Thats a lot more than can be said for a lot of other "journalists".