Nov.  21,  2014    The  Honorable  John  Boehner           The  Honorable  Mitch  McConnell  Speaker  of  the  House             Republican  Leader  U.S.  House  of  Representatives           United  States  Senate  Washington,  D.C.  20515           Washington,  D.C.  20510                      Dear  Speaker  Boehner  and  Leader  McConnell:    I  urge  you  to  not  reappoint  Doug  Elmendorf  as  Director  of  the  Congressional  Budget  Office  for  the  following  reasons:      Elmendorf’s  CBO  Got  Grubered.    It  was  Doug  Elmendorf  who  adopted  the  scoring  models  for  Obamacare  given  to  him  by  Obamacare  architect  Jonathan  Gruber.    These  inaccurate  models  were  key  to  CBO’s  assertion  that  Obamacare  would  be  good  for  health  insurance  markets  and  reduce  the  deficit.    That  would  be  the  same  Jonathan  Gruber  who  said  that  lying  to  the  American  people  was  necessary  to  pass  Obamacare  because  Americans  are  stupid.    Elmendorf’s  CBO  Pushes  Failed  Keynesian  Economic  Analysis.    As  Dan  Mitchell  of  the  Cato  Institute  has  pointed  out,  “the  CBO  –  over  and  over  again  –  produced  reports  based  on  Keynesian  methodology  to  claim  that  Obama’s  so-­‐called  stimulus  was  creating  millions  of  jobs  even  as  the  unemployment  rate  was  climbing….CBO  also  radically  underestimated  the  job  losses  that  would  be  caused  by  Obamacare…CBO  has  produced  analysis  asserting  that  higher  taxes  are  good  for  the  economy,  even  to  the  point  of  implying  that  growth  is  maximized  when  tax  rates  are  100  percent…When  purporting  to  measure  loopholes  in  the  tax  code,  the  CBO  chose  to  use  a  left-­‐wing  benchmark  that  assumes  there  should  be  double  taxation  of  income  that  is  saved  and  invested…[and]  on  rare  occasions  when  CBO  has  supportive  analysis  of  tax  cuts,  the  bureaucrats  rely  on  bad  methodology.”    Elmendorf’s  CBO  “Can’t”  Score  Obamacare.    On  June  17,  2014,  CBO  Director  Doug  Elmendorf  issued  a  blog  post  on  CBO’s  website  where  he  explains  that  CBO  cannot  any  longer  estimate  the  budgetary  impact  of  Obamacare:  “Attempting  to  construct  a  counterfactual  benchmark  for  the  budget  that  excluded  [Obamacare]  would  raise  significant  challenges  and  would  go  beyond  CBO’s  traditional  role  in  the  budget  process.”    This  was  another  way  of  saying  that  CBO  had  given  up  the  Gruber-­‐led  façade  that  Obamacare  would  reduce  the  deficit,  but  was  not  willing  to  show  their  math  in  getting  there.    Elmendorf  Chooses  to  not  Make  CBO's  Analysis  Fully  Transparent.    CBO  does  not  disclose—in  detail,  and  for  peer  review—their  scoring  methodologies.    If  they  did,  there  would  be  a  lot  more  pressure  on  them  to  incorporate  macroeconomic  analysis  into  their  scores.    This  was  a  conscious  choice  of  Doug  Elmendorf’s.    

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Elmendorf’s  CBO  Used  Dynamic  Scoring  Only  Once—to  Help  the  Obama  Administration.  The  whole  history  of  the  CBO  is  one  of  opposition  to  so-­‐called  “dynamic  scoring,”  which  is  nothing  more  than  incorporating  common  sense  assumptions  about  changes  to  the  economy  resulting  from  large  fiscal  policy  shifts.    There  is  one  notable  exception—the  2013  Senate  immigration  bill.    There  and  only  there,  Elmendorf’s  CBO  used  both  halves  of  its  brain  and  produced  a  dynamic  score.    It  just  so  happens  that  this  immigration  bill  was  a  priority  of  the  Obama  administration,  and  producing  a  score  here  (as  opposed  to  killing  the  death  tax,  or  repealing  Obamacare,  or  cutting  the  capital  gains  tax  rate)  would  advance  to  the  administration’s  agenda.    Elmendorf  is  a  Liberal  Democrat  Appointed  by  Former  Senator  Kent  Conrad  (D-­‐N.D.)  Under  a  Democrat  Senate  Majority.  It’s  a  longtime  rule  of  the  U.S.  Congress  that  the  majority  party  gets  to  pick  their  own  staff.    That’s  what  Senate  Democrats  did  when  they  appointed  one  of  their  own,  Doug  Elmendorf.  It’s  absurd  to  say  that  Democrats  have  that  right,  but  that  Republicans  are  not  free  to  pick  their  own  CBO  Director  when  they  are  in  the  majority.      Elmendorf  served  on  President  Bill  Clinton’s  Council  of  Economic  Advisors  and  in  the  Clinton  Treasury  Department.    He  was  a  senior  fellow  at  the  liberal  establishment  Brookings  Institution.    He  even  got  a  Ph.D.  from  Harvard  under  the  dissertation  guidance  of  former  Clinton  Treasury  Secretary  Larry  Summers.    There  is  no  doubt  that  he  is  a  career  Man  of  the  Left.      The  Bottom  Line:  Reappointing  Doug  Elmendorf  is  an  Endorsement  of  CBO’s  Practices.  The  CBO  under  Doug  Elmendorf  adopted  all  the  bad  practices  of  his  predecessors,  acquired  some  new  ones  (for  example,  a  disturbing  discontinuity  between  Obamacare’s  baseline  score  and  CBO’s  long  term  fiscal  outlook),  and  has  not  implemented  needed  reforms  to  CBO.    Reappointing  Elmendorf  would  be  validating  the  status  quo.    Sincerely,    

   Grover  G.  Norquist