Is the CBO really so infallible?
Almost alone in the public’s appraisal of the government, the Congressional Budget Office emerged from the health care debate as a symbol of nonpartisan truth-telling. Who, asked the media, would doubt the Non-Partisan, Objective CBO? If the CBO claims that the Democrats’ plan will reduce the deficit, who are we citizens to doubt?
Well, contrary to expectations from the infallible CBO, which stated there we had six more years until this problem would arise, we now know according to an article from yesterday’s New York Times that Social Security revenue will not equal payout beginning this year:
This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.
Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.
The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.
One might think that starting a new entitlement program in the midst of such news would be a bad idea — and one would be right. But during the debate over Obamacare, the Democrats would often roll out the CBO’s numbers as evidence of how “fiscally responsible” the plan really was. The incarnation that passed was alleged to actually reduce the deficit by nearly $150 billion over ten years.
Given that a nearly-identical state-level plan in Massachusetts incurred massive overruns — and that the major subsidies don’t even begin until 2014 — this claim should strike a person as dubious. But one simply can’t argue with the unfalsifiable. The future can’t be proven. Today’s news is a timely reminder, though, that the CBO can be very, very wrong.