OMB Watch: Disturbing Pattern Emerging on Government Budget Analyses

August 12, 2003 11:35am by

I do not have a whole lot of familiarity with OMB Watch (described as a “non-partisan nonprofit”), but they raise some rather disturbing issues of data manipulation at the OMB.

(If any one has some insight into OMB watch, I’d appreciate hearing about it).

Disturbing Pattern Emerging on Government Budget Analyses
Published On: 08/11/2003 06:07 PM » OMB Watch » The Watcher » Federal Budget

When it comes to federal tax and budget policy, it is essential that good forecasts and good estimates exist on the effects of policy options. Unfortunately, the current administration is showing a propensity to conceal and selectively release budget information when it suits their narrow political agenda.

Several examples illustrate this point.

The Office of Management and Budget (OMB) releases estimates of federal revenue, expenditures, and the deficit at least twice a year. The Fiscal Year 2002 Budget and Mid-Session Review contained budget deficit estimates (which were actually surpluses) for the following 10 years. The same publications for fiscal year 2003 and 2004, however, only contain a five-year projection. The likely reason is that the numbers would show a ballooning deficit if the projections extended beyond the five-year horizon. This budget deterioration is largely due to tax cuts that were scheduled to phase-in over several years. The administration apparently wishes to mask the true costs of their legislation.

The Department of Treasury, which employs a large number of economists and “number crunchers,” routinely released so-called distribution tables – that is, tables illustrating which income groups benefit or lose under various policy proposals. Under the current administration, the Treasury Department only selectively releases this kind of analysis and the results are often misleading. In early 2001, the Center on Budget and Policy Priorities noted that a released table “departs markedly from the Treasury Department’s established methodology for analyzing and providing information on the effects of tax proposals on different income groups . . .”

There’s more examples at their site with links to the related studies.

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  1. K Harris commented on Aug 12

    OMB Watch has recently picked up John Irons, who also runs ArgMax.com, an economics web log. Irons has written about the budget at his own site, along with other issues, so you can get a feel for who he is. Irons has taken out after the Bush administration quite a lot. So has OMB Watch. That probably isn’t too great a condemnation of either, since there is no sense going on about the budgeting practices of the guys out of office. As far as I can tell, most of the budget work available on line is critical of the Bush administration, but that may be inevitable, for the same reason. There doesn’t seem to be any serious analysis of the budget being done by Bush supporters. That may be because, as OMB Watch suggests, the budget is a train wreck and Bush supporters can’t very well say so.

  2. Barry Ritholtz commented on Aug 12

    My concern is not the criticism of the administration — there’s plenty of that around;

    Rather, its the tendency to ignore or even stop reporting data which goes against the theories of the current group of policy planners.

    For example, the U.S. Labor Department survey of mass layoffs is no longer released; Why? Because we were going through a period of layoffs? That’s a natural part of the cycle (call it the cruel side of capitalism if you like, but its reality); There’s little that can be done, except to measure and compare it to prior cycles.

    I cannot find a decent, apolitical reason this data point was killed. This form of economic “ostrich-ism” is begining to look like a trend . . .

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