One More Republican Needs to Go—the Head of CBO

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As the Prospect has reported, the Congressional Budget Office, supposedly a “neutral” source of technical assessment, has completely misstated the net impact of a $15 minimum wage. The details are wonky—check out EPI’s evisceration here—but basically CBO overstates costs, miscalculates the interaction between wages and prices, and understates benefits.

The benefits include reduced reliance on public assistance, increased tax revenues, and wage increases for a total of 27 million American workers. All of that would produce macroeconomic stimulus and generate jobs. Also, the $15 minimum wage is part of a $1.9 trillion stimulus package that itself will boost jobs, and the package needs to be understood as a whole.

Yesterday, CBO admitted that it had made a doozy of a miscalculation in its September projection of increased national debt. Thanks to an improved economic outlook for late this year and next as the recovery kicks in, CBO now projects the debt to be just 107 percent of GDP by 2031. This is far less than previously estimated, and well below the World War II peak.

But CBO’s earlier projections added to the anti-stimulus hysteria. These estimates, which change with the winds, are treated as Scripture. CBO is allegedly nonpartisan, but its brand of economic analysis is deeply conservative.

Its director is a Republican, Phil Swagel. He was formerly assistant Treasury secretary for policy under Hank Paulson in the George W. Bush administration.

Swagel was appointed for a four-year term in 2019, at a time when Republicans controlled the Senate and Democrats had the House. He was pushed for the job by Republican Sen. Mike Enzi of Wyoming, then the chair of the Senate Budget Committee, and OK’d by House Budget chair John Yarmuth of Kentucky, a progressive. Today, the Senate Budget chair is Bernie Sanders.

At the very least, Sanders and Yarmuth need hearings challenging CBO on the way they do economics. Swagel can only be removed during his term for gross misfeasance. Well, CBO has just demonstrated it.

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