Is it possible that congressional Republicans, who so vehemently and consistently have complained about the accuracy of the Congressional Budget Office's projections, could become CBO's biggest supporters during this year's budget debate?
The word on the street is that CBO is about to make a dramatic change in its long-range surplus forecast. Instead of the $9 billion on-budget surplus (that is, without counting Social Security's surplus) between fiscal 1999 and 2008 projected last November, CBO supposedly is about to release a new forecast showing the on-budget surplus will be between $500 billion and $600 billion.
This significantly larger number is what congressional Republicans have been insisting was a much more accurate reflection of the true budget outlook. CBO's failure to project anything close to it, they said, was the organization's way of thwarting the GOP's agenda and promoting its own policies, the result of inadequate forecasting techniques, out-of-date economic theories and senior staff that had been in their jobs too long.
If this new and much larger surplus estimate materializes, however, it will have been done by the same organization with the allegedly same agenda that was so heavily criticized the past few years. It will be the result of the same estimating techniques, and be done by the same staff that was constantly second-guessed and called inept and out of touch.
There is little doubt that congressional Republicans will embrace this new forecast. It will be said to be an affirmation of what they have been saying all along about the budget outlook. But it will not be an affirmation about what the Republicans have been saying about CBO. If Republicans celebrate the latest forecast as being correct, then they also should admit that their earlier criticism of CBO was unjustified.
On the other hand, if they stick to their previous critical remarks about the methods used to come up with the number and the people doing the estimating, then they should admit that the new surplus estimate could be just as wrong as the one they were complaining about earlier.
While the irony of the situation congressional Republicans may find themselves in is amusing, the more important issue is whether a new and dramatically larger surplus estimate over the next decade will make much difference in this year's budget debate. Surprisingly, other than the rhetoric, the answer probably is "no."
There is little doubt that a greatly increased on-budget surplus will heighten the calls for a tax cut. Some will say this non-Social Security surplus will not be needed to fix the long-term problem with the program, so President Clinton's "save Social Security first" insistence is no longer applicable. There will also be some who feel better about moving ahead with a tax cut because there will be little chance of charges that a proposed revenue reduction is being paid for by reducing the Social Security surplus.
This new sense of security will be misplaced for several reasons.
First, Clinton's often-stated position from last year was that the whole surplus should be saved until a Social Security fix could be found. Any attempt to divide that into its component parts will be difficult to get across convincingly in sound bites. Touching any surplus before Social Security is dealt with will be as politically foolhardy this year as it was last year, regardless of whether it is an on-budget or total surplus.
Second, it is not at all clear that the Social Security surplus by itself will fix the Social Security problem. To the contrary, with the program's annual income expected to start exceeding benefits paid around 2013, additional funds will have to be found from somewhere or benefits will have to be reduced in some way. It is highly doubtful that Republicans will feel any safer politically if they propose using the on-budget surplus for a tax cut-it would still expose them them to the charge that the cut will be paid for with revenues needed to prevent a cut in Social Security benefits.
One final point. The overwhelming probability is that the biggest increases in the on-budget surplus will be towards the end of the 10-year period. This means that the amount that would be available to be used for a tax cut this year and next would be minimal, or possibly even nonexistent. This is so likely to be unacceptable to tax cut supporters in the House and Senate that the new CBO forecast may be of little or no consequence.
Question Of The Week
Last Week's Question. With the Clinton fiscal 2000 budget not due until Feb. 1, we won't know for several weeks whether anyone guessed right about the color of the cover and, therefore, whether anyone won the all new "I Won A 1999 Budget Battle" T-shirt. For the record, the most common answers were black and green.
This Week's Question. The word is that Dan Crippen is about to become the fifth director (following in the footsteps of Alice Rivlin, Rudolph Penner, Robert Reischauer, and June O'Neill) of the Congressional Budget Office. The question: According to the Congressional Budget Act, who actually must make the decision? Send your response to scollender@njdc.com and you could have your own "I Won A 1999 Budget Battle" T-shirt in time to impress your friends while watching the Super Bowl. If there is more than one correct answer the winner will be determined by a random drawing.
As The Budget Turns
Here's your chance to easily and enjoyably find out more about what this year's budget debate will mean for you.
Click here for details about "As The Budget Turns," a half-day executive briefing on Feb. 10 in Washington, D.C., conducted by "Budget Battles" author Stan Collender and sponsored jointly by the National Journal Group and Fleishman-Hillard. The latest in computer presentation techniques, including sound and visual effects, will make this the most fun briefing you attend all year.
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