It is 10 00 and good morning, everyone. The hearing will come to order. Welcome to the committee on the budgets hearing on oversight of the Congressional Budget Office. This hearing will focus on Cbos Organizational and operational structure. It is the first of five hearings that the Committee Plans to hold regarding oversight of the congressional budget. The goal of todays hearing is to learn more about cbo, which was created as part of the congressional budget and impoundment act of 1974. For decades, this agencys primary function and duty has been to assist congress in the federal budget making process by providing cost estimates, economic analysis, working papers and other insightful publications. Members of the house and Senate Budget committees rely on cbo as an objective, impartial resource when writing budget resolutions. The agency also plays a key role in advising this committee as it enforces budget rules. Without question, there are dozens of fine men and women employed by cbo, including analysts, management and support staff. But more than 40 years since its founding, congress has not undertaken a comprehensive review of cbos structure and processes. In fact, cbo still operates under its original permanent authorization. I say this not to raise alarm about the future of cbo or question Congress Need for it. Its simply a fact that serious oversight has not been exercised to ensure the agency still has the tools to needs to be successful in fulfilling its mandate. That being said, our intention is the same with todays hearing as it will be with upcoming hearings. We want to better understand how cbo carries out its nonpartisan mission in service and support to congress. During todays hearing, we will take a closer look at the organizational and operational structure of cbo, including its staffing, assumptions, processes and work products. To provide an overview on the interworkings of this congressional support agency and how it has evolved over the years, im pleased to welcome dr. Keith hall. Dr. Hall has served as director of cbo since april of 2015 when he became the ninth director of the agency. Before we hear directly from dr. Hall, i want to stress again that this series of hearings is not designed to be partisan or to invite cheap shots against the agency so vital to congress ability to budget independently. However, there are legitimate questions about cbo how cbo operates. And im hopeful that these hearings will shed light on how we can improve its operations to provide congress what it needs in the 21st century. To ensure cbo can effectively and efficiently carry out its mission, im pleased we are advancing a comprehensive review through these oversight hearings and i look forward to productive conversations today with dr. Hall. Now, before i yield to my colleague, the Budget Committees Ranking Member mr. Yarmuth, ill remind everyone that this committee will strictly enforce the fiveminute rule. Im a military guy. I like to run a tight ship. And i want to ensure that our hearings are as productive as possible. So i will ask that your remarks and your questions are delivered with enough time for our witness to respond. If they are not, answers will be submitted for the record and i will hold my colleagues and myself to this rule. So thanks in advance. I look forward to a productive hearing. And now i would like to yield to the Ranking Member, mr. Yarmuth, from the great commonwealth of kentucky, for his remarks. Thank you very much, mr. Chairman. Congratulations on your new role. I look forward to working with you. Thank you for calling this hearing. All of us on the Budget Committee take our oversight role seriously and i am very glad that we will be discussing these important issues today. I hope that we will be just as diligent in our responsibilities to develop a Budget Proposal and will hear testimony from the federal agencies that we expect to be significantly impacted by the president s budget. Director hall, thank you for your testimony in advance and thank you for your service. Congress created a Congressional Budget Office to give us an independent and reliable source of budgetary information and expertise. For more than 40 years, cbo has fulfilled its mission, providing impartial, highquality analysis to inform our decisionmaking and improve our ability to protect the power of the purse. While everyone here is aware that director hall excuse me was was appointed by congressional republicans, expectations have always been that the cbo director will carry out his or her responsibilities without allegiance or deference to any political ideology or party. Same is true of the staff who are hired based on their ability and qualifications, not political affiliation. As a result, cbo produces its best analysis regardless of any desired outcome for an administration, the majority in congress or the congressional minority. Despite that commitment to objectivity, however, cbo has been the target of criticism. And im sure we will hear some of that today. Youve actually heard some of it from me over the years. Director hall, i do not envy you. You have what i would argue as one of the most thankless jobs in washington, and that is to be our objective referee. And coming from a basketball state, i know how loved the referees are. In an arena where passions run deep, your calls will often be embraced by one side while questioned by the other. One day its the republicans complaining, the next its the democrats. That has been a reality in Congress Since cbos inception, but there has been a dramatic shift recently in the treatment of cbo, as members of the committee, this should be deeply troubling to us all. Questioning and fair criticism of cbo have morphed into more toss tick attacks, many have crossed the line and much of this friction seems to center on analysis of my republican colleagues efforts to repeal the Affordable Care act. Look, i get it, i would not want to defend increasing the number of ininsured americans by 20 million or causing premiums to skyrocket, particularly when there is no viable plan for replacement, but im not sure what you thought cbos analysis would show. The Affordable Care act expanded coverage through three related strategies, requiring Insurance Companies to make meaningful coverage available to all, requiring individuals to get covered and subsidizing premiums to make premiums affordable. If you end the individual mandate, which weve just done, people will go without coverage. If you end subsidies that help families afford insurance, people lose coverage. If you take away Consumer Protections and once again lou insurers to play games, premiums will increase for everyone who are not no perfect health. There is no way around the fact that repealing the Affordable Care act will result in millions of American Families losing Health Coverage and there is no way to defend that to the American People. So with nowhere to turn, many of my republican colleagues unfairly went after the cbo. Inappropriately impugning the integrity of the agency and the staff. I want to be clear, i think congress has every right, even a duty, to review cbos work and ask questions and cbo needs to be forthcoming in providing explanations. Democrats have certainly raised questions about assumptions or interpretations. But what we havent done is called into question the integrity of the institution or individual staff members. Its all too easy these days to take refuge in information that tells us only what we want to hear, but that does not lead to sound policy. Cbo does not exist to give us the information we want to hear. Its job is to give us the information we need to make informed, responsible decisions. Its one of the few institutions in washington that serves that role. Attacks on the cbo arent just attacks on director hall and his staff, they are attacks on our integrity as a deliberative body. They reduce trust in government and undermine the standards on which a functioning democracy depends. Today i hope to hear from you, dr. Hall, about how you ensure your workers objectives and the steps youve taken to increase transparency at cbo. Id like to learn more about your staffs technical capabilities and any additional need for funding or tools. Youll likely hear disagreements with some of your methcies. I think some will challenge you on the process and encourage you to look at alternative methods. I think thats fair game and i look forward to that discussion. Thank you again, dr. Hall, for your leadership at cbo and look forward to your testimony today. I yield back. Thank you, mr. Yarmuth. In the interest of time, if any members have opening statements, i ask that they be submitted for the record. Id like to introduce and recognize the director of the Congressional Budget Office, dr. Keith hall. Thank you no your time today. Let me stay say from a personal standpoint how enjoyable it was to visit the fourth floor of the Ford Building and the great staff work that is taking place over there with the Congressional Budget Office under your leadership. The committee has received your written statement and it will be made part of the formal hearing record. You have ten minutes to deliver your oral remarks and the floor is yours. Thank you, sir. Chairman womack, Ranking Member yarmuth and members of the committee, thank you for inviting me to testify this morning about Cbos Organization and operations. And thank you for your support and guidance. We at cbo have long relied on the Budget Committees to explain our role to others in congress. We also r lie on you to provide productive feedback and guidance on congress priorities. The work on your part has been key to our success over the years. I would like to make ten points in my remarks and then i look forward to talking to you about how we can serve congress better. First, lawmakers created cbo to give the congress a stronger role in budget matters. Cbo was established under the congressional budget act of 1974 to provide objective, nonpartisan information that would support the budget process. Cbos mission is to help the Congress Make effective budget and economic policy. In carrying out that mission, the Agency Offers an alternative to the information provided by the office of management and budget and the executive branch. Second, the Congress Sets cbos priorities. Cbo follows processes specified in statute or developed by the agency in concert with the Budget Committees and congressional leadership. Cbos chief responsibility under the budget act is to help the Budget Committees with matters under their jurisdiction. The agency also supports other committees, particularly the appropriations, ways and means and finance committees and leadership. Among cbos statutory requirements is producing reports, the best known of which is the annual budget and economic outlook. That report includes cbos baseline budgetary and economic projections. Cbos also required by law to produce a formal cost estimate for nearly every bill that is approved by a full committee of either house or senate. Those cost estimates are only advisory. They can but not do not have to be used to enforce budgetary rules or targets. Moreover, cbo does not enforce such budgetary rules, the Budget Committees do. Third, cbo produces a lot of work each year. For example, last year, the agency published 740 formal cost estimates, provided Technical Assistance to Congressional Staff as they developed literally thousands of legislative proposals and amendments. And published many reports about the budget, the economy and related issues. Nevertheless, because of limited resources and the number of estimates and analysis that cbo can produce falls short of congressional requests. Moreover, we must balance our commitment to respond quickly to the congress with our professional responsibility to release estimates and analysis only when their quality is high enough. Fourth, in order to provide congress with the highquality analysis that it needs, cbos staff has expertise in many areas. Among cbos roughly 235 people, the largest concentration of expertise is in the area of health. Other areas of focus include national security, labor, taxes, energy and macro economics. Maintaining a broad array of expertise allows cbo to respond to policy makers needs quickly. Analysts are organized into a number of divisions, but much of cbos work requires work from more than one division. Cbo analysts also pursue high quality and accuracy. They approach issues with a detailed understanding of federal programs and the tax code. They carefully and critically read the Relevant Research literature. They painstakingly analyze Data Collected by the government and private organizations and regularly consult with a disverse range of outside experts, including professors, analysts at think tanks, representatives of industry groups, with private sector experts and Government Employees at the federal, state and local levels. Some of the consultations occur during meeting with cbos panel of economic advisers and panel of Health Advisers. Fifth, cbos analysis is objective, impartial and nonpartisan. We maintain our objectivity in a number of ways. One is that we make no policy recommendations. Another is that we hire people on the basis of their expertise. Nearly 80 of cbos employees have advanced degrees. And without regard to political affiliation. We carefully consider whether potential analysis can perform whether potential analysts can perform objective analysis regardless of their own personal views and we enforce strict rules to prevent employees from having financial conflicts of interest and to limit their political activities. We aim to reflect the full range of expert whos present the likely consequences of proposals being presented by the congress. Our goal is to produce estimates in the middle of distribution of possible outcomes. Sixth, models do not produce cbo estimates, cbo does. Cbos estimates often require projections of how people and institutions would respond to proposed changes in law. A computer tool there are various kinds of models, such as complex simulation models, regression models and calculations in spread sheets. Nonetheless, models often cannot show the full scope of the effects of the legislative proposal. Analysts must routinely go further, combining what can be learned from a model with other information to the estimates correspond as closely as possible to what the best Available Research suggests. Seventh, cbo has a rigorous system of checks and balances. All of cbos cost estimates and reports are reviewed internally for objectivity, analytical soundness and clarity. That process involves many people at various levels in the agency. Analysts consultations with outside experts help them hear all perspectives on an issue. And we ynl revisit our past work and learn from our projections and actual outcomes. We also compare our analysis to others work and incorporate outside feedback into our projects. Eighth, cbo prioritizes transparency. Since its inception, the agency has used many approaches to be transparent. To begin with, cbos cost estimates and publications include documentation of the basis of their findings. We document the revisions through our budget projections and estimates. Rereport on the accuracy of our projections, including projections about the economy, extending, revenues and Health Insurance subsidies. We publish analysis of how sensitive our estimates are and seek external review to our reports before theyre released and the methods in which our products are based. Cbo also promotes transparency by providing broad access. When cbo completes a formal cost estimate, it is made immediately available to all members of congress, their staff and the public on cbos website. Further more, cbos analysis regularly explain their analysis to Congressional Staff. My colleagues gave presentation to 150 Congressional Staff members about how cbo develops estimates of Health Insurance costs and coverage. Unfortunately, the pace of congressional action sometimes limits the Time Available for providing extensive explanation of estimates and because the overall demand for cbos work is high and our resourcer are constrained, we need to balance requests about finished analysis with requests for new analysis and our other responsibilities, such as regularly updating our baseline projections. Ninth, cbo evolves as the needs of congress evolve. Cbo remains true to its original mission, we work with the congress in ways probably not envisioned when the agency was first created. For example, as legislators have grown more complex, we found ourselves spending more time providing preliminarily analysis and Technical Assistance during the drafting stage. Were being asked more often to prepare cost estimates for bills that are heading for votes without being marked up by committees first. To accommodate the Congress Needs and agenda, sbo shifts staffing and develops new analytical tools. For example, we developed significant resources to analyze Health Care Issues so that we would b