The Gatekeeper

How a little bureaucratic office became the biggest impediment to Barack Obama’s health care plans

Peter Suderman from the January 2010 issue

It was January 2009, and Democrats were triumphant. Their party had won major victories in both the House and the Senate, and Barack Obama, arguably the most economically left-wing president in decades, had just won the White House on a promise to finally achieve what had eluded liberals for so long: universal health care.

As the new era unfolded in Washington, plans for overhauling one-sixth of the economy began to take shape. Health care reforms, Democrats vowed, would extend insurance to every American and be fully paid for without requiring middle-class tax hikes, all while cutting costs significantly enough to save the country from financial catastrophe. To sell these claims the party trotted out one of the most respected number-crunchers in town, Office of Management and Budget Director Peter Orszag, a former Brookings Institution health care expert obsessed with cost cutting. With 60 votes in the Senate, nothing seemed to stand in the Democrats’ way.

Nothing, that is, except the Congressional Budget Office (CBO), a nonpartisan federal agency that until this year was run by none other than Peter Orszag. As drafts of various health care bills began to emerge on Capitol Hill, the CBO, responsible for devising Congress’ official legislative cost estimates (known as “scores”), released a series of reports that demolished key Democratic claims. According to the CBO, both the “tri-committee” bill proposed in the House and the bill proposed in the Senate Finance Committee would cost in excess of $1 trillion over 10 years, might leave tens of millions uninsured, and would not curb rising health care costs. Indeed, both would add substantially to the budget deficit in the long term. As the year progressed, the CBO proved a more effective check against key elements of the Democrats’ domestic agenda than anything concocted by Republican strategists or libertarian wonks. In an October article, The Washington Post concluded that the CBO had “essentially condemned two legislative proposals by slapping them with trillion-dollar price tags.”

Created as an afterthought and initially intended as a low-profile congressional calculation service, the CBO has quietly risen to a place of unique prominence and power in Washington policy debates. Widely cited and almost universally respected, it is treated as judge and referee, resolving disputes about what policies will cost and how they will work.

But the agency’s authority is belied by the highly speculative nature of its work, which requires an endless succession of unverifiable assumptions. These assumptions are frequently treated as definitive, as if on faith. In practice, this means the CBO is not merely an impartial legislative scorekeeper but a keeper of the nation’s budgetary myths, a clan of spreadsheet-wielding priests whose declarations become Washington’s holy writ. READ MORE REASON