BROOKE GLADSTONE:  This week also brought the return of an increasingly familiar Washington ritual, the bickering over the probity of the Congressional Budget Office.

 [CLIPS]:

FEMALE CORRESPONDENT:  The Congressional Budget Office releases projected cost of the GOP's health care bill, while the White House and Republicans question the agency’s analysis.

MALE CORRESPONDENT:  If you’re looking at the CBO for accuracy, you’re looking in the wrong place.

MALE CORRESPONDENT:  Well, whatever one's opinion about the CBO, there is no doubt that this scoring of yesterday will change the debate. More than one senator has already said that the bill is dead upon arrival in the Senate.

 [END CLIP]

BROOKE GLADSTONE:  The CBO score, which assesses a bill’s fiscal impact, is so central that House Speaker Paul Ryan, the driver behind the new Obamacare replacement bill, sought to preempt it last weekend on CBS's Face the Nation.

  [CLIP]:

HOUSE SPEAKER RYAN:  The one thing I'm certain will happen is CBO will say, well, gosh, not as many people will get coverage. You know why? ‘Cause this isn’t a government mandate.

 [END CLIP]

BROOKE GLADSTONE:  So true. The CBO estimates that 24 million people will lose coverage over the next 10 years under Ryan's plan. But all this CBO bashing follows a script that often is flipped. Sometimes it's Republicans who extol the agency as a paragon of nonpartisan virtue and Democrats who challenge its worth, as in 2009.

 [CLIP]:

MAN:  The shocker of the week in the health care debate, the independent Congressional Budget Office saying the Democrats’ bill will cut Medicare benefits. Democratic leaders deny it, of course.

 [END CLIP]

BROOKE GLADSTONE:  But it wasn’t always like this, says Zachary Karabell. He’s the author of The Leading Indicators: A Short History of the Numbers That Rule Our World. He says that though CBO was created in 1974, it wasn’t until the deficit panics a decade later that it took on its current role.

ZACHARY KARABELL:  The Congressional Budget Office would assess all future legislation for its effects on future government deficits, the idea that left to its own devices Congress will spend a lot of money because look, nobody gets elected because they promise to take stuff. They get elected because they promise to bring government money in.

BROOKE GLADSTONE:  It forces legislators to be accountable because they've been warned by the CBO.

ZACHARY KARABELL:  Correct.

BROOKE GLADSTONE:  So every bill is looked at as a potential deficit builder or deficit reducer.

ZACHARY KARABELL:  Correct.

BROOKE GLADSTONE:  And this bill, health care, you suggest seems to have been designed less as an insurance bill and more as a deficit reducer.

ZACHARY KARABELL:  Correct. More consequential for the CBO was this potential law will reduce deficits by 300 plus billion dollars over the next 10 years.

BROOKE GLADSTONE:  Mm-hmm.

ZACHARY KARABELL:  It also said, look, we’re going to reduce the number of people insured by 20 to 24 million people. Those formulas are only applied to the number of uninsured, insofar as they affect how much the government may or may not be on the hook for, how much Medicaid or how much Medicare spending there will have to be, which is a government outlay.

BROOKE GLADSTONE:  Now let's talk about the two big problems that you identify with this reliance on the CBO, one of which, it's often wrong. The other, the role it plays in Congress to shape policy, you say it limits the imagination.

ZACHARY KARABELL:  Right. So let’s do the first one first, which is it's often wrong. It could not be anything other than often wrong, given the constraints under which it operates. Things like the Federal Reserve are constantly in the business of revising and revising and revising and reflecting, based on a constantly changing world. The Congressional Budget Office is set up to assess, at the point of potential passage, what's the effect. You can factor in what the costs are at the time it's passed. You cannot or at least they do not factor in potential savings from the spending.

So if I spend $100 million to build a bridge, all that you can factor in, for sure, is that you spent $100 million. You can argue that it will save commuting time, that will lead to less gas the trucks will use, all these virtuous effects, but it would require the CBO to do much more complicated multifactor probabilities, and that doesn't work so well in Capitol Hill if you get people going, I like that probability and someone else going, well, I like that one.

BROOKE GLADSTONE:  Scenarios, the very thing that might broaden the imagination and the possibilities, would just become partisan brickbats.

ZACHARY KARABELL:  People would pick their probability. We existed for 200 years without a Congressional Budget Office and bills were passed, money was spent and the arguments were usually, does this serve the public good? Sometimes the arguments were, does it serve my constituents? It wasn't always noble. It was sometimes venal. But it was almost always in the context of, is there a goal here that this bill leads to?

BROOKE GLADSTONE:  So give me some examples of bills that you think would not have gotten a good CBO score.

ZACHARY KARABELL:  The passage of the Interstate Highway Act under the Eisenhower administration, which people look at as one of the great 20th century federal acts of national infrastructure spending.

 [CLIP/MUSIC UP & UNDER]:

ANNOUNCER:  These new highways will have a far-reaching economic impact on the entire nation. They provide a heavy duty link between all parts of productive America.

 [END CLIP]

ZACHARY KARABELL:  To be fair, if there had been a Congressional Budget Office, they never would have factored in the environmental effects of it because of all the things that I said. Even though a more probabilistic lens would have said what would the environmental impact of this be? So you could argue that that kind of law would have had a tough go of it.

BROOKE GLADSTONE:  Do you think that the G.I. Bill would have gotten a bad score?

ZACHARY KARABELL:  Oh, unquestionably, you know, because what's the return?

BROOKE GLADSTONE:  I mean, you could certainly calculate people with better educations being more productive.

ZACHARY KARABELL:  That will lead to people having better-paying jobs, which will lead to more tax collection, which will lead to more revenue for the government, which will more than pay for itself.

BROOKE GLADSTONE:  You really think it would have scored badly?

ZACHARY KARABELL:  Because you wouldn't have been able to score those things. Look, my essential critique of this, as you've indicated, is that by trying to squeeze everything into simple binary formulas we saw a lot of babies out with the bathwater. There may be a lot of really negative pork, unnecessary spending that we avoid, but it is clear that we probably also avoid a lot of necessary spending, particularly in the short term.

BROOKE GLADSTONE:  So last week, the White House hailed the Department of Labor's latest jobs report. It's the same figures that President Trump used to call phony.

 [CLIP]:

WHITE HOUSE PRESS SECRETARY SEAN SPICER:  Yeah, I, I talked to the president prior to this and he said to quote him very clearly. “They may Have been phony in the past but it’s very real now.

 [LAUGHTER][END CLIP]

BROOKE GLADSTONE:  You’ve written that these indicators were never meant to be part of a national conversation, to begin with.

ZACHARY KARABELL:  So look, these numbers basically got invented during the Great Depression, so we've had these numbers for a little less than 90 years.

BROOKE GLADSTONE:  One of FDR's economists, Simon Kuznets, he was pretty concerned that these numbers would be misused.

ZACHARY KARABELL:  Absolutely, I mean, Kuznets is often credited legitimately as the father of GDP and he really created what we now know as measuring a nation's economic activity. He thought this was incredibly important just to understand these systems, but he was very concerned that numbers and statistics are always stories. They tell you what they tell you but they don't tell you what they don't tell you; they’re limited. And so, Kuznets, later in life, he became the classic, you know, a little like Oppenheimer with the bomb, right? Be careful what you've created.

BROOKE GLADSTONE:  The destroyer of worlds?

ZACHARY KARABELL:  He was a destroyer of statistical worlds. But he was very concerned, particularly as the 1930s evolved and things like national income became part of the discussion and part of the way that the Roosevelt administration was trying to say to the public, look, the New Deal is working and I can prove that it's working because our national income is going up.

 [CLIP]:  

PRESIDENT ROOSEVELT:  Farmers are no longer in deep distress and have greater purchasing power; dangers of security speculation have been minimized; national income is almost 50% higher than it was in 1932; and government has an established and accepted responsibility for relief.

 [END CLIP]

ZACHARY KARABELL:  In spite of Kuznets’ reservations about these numbers being misused for political gain, those numbers were, indeed, misused for political gain and have been ever since.

BROOKE GLADSTONE:  Now, there is an implied argument in your writing against having an organization like the CBO issuing scores, and so on. But you need some data and I know there are plenty of places that produce it. Are you saying we don't particularly need this data?

ZACHARY KARABELL:  I'm a little bit like Kuznets in this, the danger of good but limited information.

BROOKE GLADSTONE:  But that’s all we have. We never have the possibility of getting unlimited information.

ZACHARY KARABELL:  No, but you can aspire to a political dialogue about crucial public issues that recognizes that there is some combination of certainty and uncertainty. What are the public outcomes we’re trying to achieve and yes, what are the economic consequences of that, but that is not the sole basis on which to justify these things. We don’t justify national defense based on its budget contribution. We justify national defense based on do we believe this will make us safer and is the world that we’re shaping by virtue of spending that the world we want to live in?

So I am in no way saying we shouldn't think about these things. I am saying we have all the tools at our disposal to do this much more sophisticated analysis of what’s a probable set of outcomes. We could create our statistical agencies and demand of them those varieties of outcomes, but that would demand our politicians act like adults. And when I say “like adults” I mean are willing to sit with certainty and uncertainty in the service of good public outcomes.

BROOKE GLADSTONE:  And to share that uncertainty with their constituents.

ZACHARY KARABELL:  Correct.

BROOKE GLADSTONE:  Clearly, deficit reduction has been much more an obsession for the Republicans in recent years than Democrats. So when you question the CBO, is that partly because its focus on deficit reduction is such a conservative enterprise?

ZACHARY KARABELL:  I think it’s small “c” conservative. I don't think you need to be like a big government proponent to question the straitjacket that the CBO can create. Having really good analysis of possible outcomes, that is vital, right?

BROOKE GLADSTONE:  But no score.

ZACHARY KARABELL:  Not a scores end-all and be-all of it because, again, there are times when you can spend money to save money. Spending money can serve the public good. That has become a liberal, I suppose, perspective but it is not inherently a liberal. And doing that with discipline, you know, may be a conservative perspective. And there's huge virtue in both. I don't the CBO as it is currently constituted allows for that mixture of art and science.

BROOKE GLADSTONE:  Zachary, thank you very much.

ZACHARY KARABELL:  Thank you for the discussion.

BROOKE GLADSTONE:  Zachary Karabell is author of The Leading Indicators: A Short History of the Numbers That Rule Our World and is head of global strategy at Envestnet.

 [MUSIC UP & UNDER]

BOB GARFIELD:  Coming up, the truth behind the latest WikiLeaks document dump. Hint? Your TV hasn't been taken over by the CIA.

BROOKE GLADSTONE:  This is On the Media.