TEXT OF COMMENTARY
SCOTT JAGOW: The chit-chat in Washington this week is mostly about President Bush’s $3 trillion budget and the cool reception from the Democrats in Congress. There will be months of back and forth over what’s in there. The non-partisan Congressional Budget Office will provide a lot of information during this process. But commentator Newt Gingrich says the CBO often misses the mark.
NEWT GINGRICH: The Congressional Budget Office’s budget forecasts are routinely way off, sometimes by hundreds of billions of dollars.
And that’s because their analysts seem unable — or unwilling — to take into account things like competition, the building blocks of pro-growth policies.
Take their forecast on the average cost of a prescription drug plan under Medicare Part D. Their estimate? It would cost $38 a month.
In fact, the average cost ended up being $24 a plan in the program’s first year. And in 2007, the average cost of a plan will be $22 thanks to competition.
Finally, the CBO can’t tell the difference between operating cost and investment.
One recent bill would have gone a long way toward laying the foundation for nationwide electronic health records. It failed, thanks to CBO cost estimates.
CBO refused to take into account the money electronic medical records would save Medicare and Medicaid by reducing prescription errors caused by bad handwriting and other problems tied to paper records. Many experts estimated the investment would pay for itself in five years.
The result of all this bad scoring is that politicians end up tailoring bills to get a good CBO score instead of aiming for good public policy.
And to add insult to injury, the CBO keeps its scoring models a secret. So nobody knows what methods they use in their predictions.
Congress should insist CBO open up its practices for public scrutiny. Taxpayers deserve transparency when it comes to how their money will be spent.
And members of Congress committed to more accurate scoring should work together to release alternative scoring to the CBO for every piece of legislation introduced.
They should use modern economic models that are also public. That way, over time, it would be obvious whose methods are most accurate and most cost-effective for all of us.
JAGOW: The thoughts of former House Speaker Newt Gingrich.
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