CBO Is Biased—And So Are Their Coverage Loss Estimates
Key Findings
- The Congressional Budget Office (CBO) is overwhelmingly affiliated with the Democratic Party.
- CBO has a disastrous track record when scoring Medicaid reforms and coverage loss implications.
- CBO’s coverage loss estimates on the One Big Beautiful Bill Act are not to be trusted.
Overview
Since its founding in 1974, the Congressional Budget Office (CBO) has purported to be a non-partisan, analytical resource for members of Congress and their staff when evaluating public policy.1 Every year, CBO estimates the fiscal implications of various pieces of legislation, produces options for reducing the deficit, and makes projections about key economic indicators. Coupled with the Joint Committee on Taxation, which focuses squarely on revenue-raising legislation, countless members of Congress have relied on CBO for more than half a century.
Unfortunately, CBO is far from immune to making mistakes, and its scoring blunders exceed what is acceptable. Despite CBO’s claims that its average error for estimating outlays and deficits hovers around the low single digits, CBO is responsible for a whole host of other scores that undermine its accuracy.2-3 In fact, CBO has a tendency to underestimate the costs associated with measures that would increase the size of government and overestimate the cost of tax relief on Americans.
Major pieces of legislation—from the 2010 passage of ObamaCare to the 2021 Inflation Reduction Act, and many more—have been scored inaccurately by CBO.4 In many cases, the actual cost of government programs has been double CBO’s estimates—as was the case with changes to the food stamp program in the 2009 stimulus package and COVID relief legislation.5
Recently, CBO’s scores of various provisions of the One Big Beautiful Bill Act have attracted substantial attention from the media and far-left activists alike, especially as it relates to projections of health coverage loss.6-8 However, these estimates are extremely problematic and rooted in CBO’s liberal viewpoints.
The reality is that CBO is fundamentally biased to the political left, and this bias has manifested itself in fiscal and coverage estimates that are wildly inaccurate.
CBO bureaucrats are overwhelmingly affiliated with the Democrat Party
The entire federal bureaucracy has a problem with political balance. Across all agencies, Democrats outnumber Republicans by about a two-to-one margin.9 Among higher-ranking bureaucrats in the senior executive service (SES), Democrats maintain a consistent 30-percentage-point advantage over Republicans—a trend which is even more skewed among those living in the D.C.
metropolitan area.10
But the political views of CBO’s analysts are even more biased. A whopping 78.9 percent of CBO employees with matched voter registration records are Democrats, compared to just 12.5 percent who are Republicans, and 8.6 percent who are independent or unaffiliated—a shocking tilt of the scales to the left.11-12 This Democrat advantage of approximately D+66 is higher than the advantage among career bureaucrats in any federal agency.13 Many of those labeled as independent or unaffiliated also appear to lean left, with donation records showing political contributions to Democrat candidates and causes, suggesting the true share of liberal employees may be even higher.14
The Joint Committee on Taxation (JCT), which advises Congress on all tax legislation and often works closely with CBO, shows a similarly skewed makeup. Roughly 70 percent of JCT employees with matched voter registration records are Democrats, compared to just 13.3 percent who are Republicans and 16.7 percent who are independent or unaffiliated.15-16
Among certain divisions of CBO’s analytical team, the imbalance is even more stark. For example, among CBO’s Health Division—which analyzes the fiscal and coverage loss effects for changes to programs like Medicaid—more than 93 percent are Democrats and not a single employee is Republican.17-18 Nearly seven percent of employees in this division have unaffiliated voter registrations, but at least half of those unaffiliated voters have donated exclusively to Democrats in political campaigns.19
This ideological skew is not a coincidence. CBO employees also have a revolving-door-like relationship with both liberal members of Congress and left-leaning think tanks, where CBO’s analysts often gain their political experience before scoring the most important pieces of legislation in the nation. In fact, more than three dozen CBO staff were previously employed by Democrat elected officials and entities, including those who served under the Biden administration and Democrat members of Congress, as well as liberal think tanks.20
Considering the individuals scoring key bills in Congress have such an overwhelming political bent, significant doubt should be cast on the reliability of their estimates, which are already self-evidently inaccurate in many instances.
CBO has a disastrous track record when scoring Medicaid reforms and coverage loss implications
If CBO is liberal and its estimates are flawed, then its Health Division’s work is perhaps among the most biased and inaccurate that the office produces. CBO’s past experiences predicting the fiscal implications of changes to programs like Medicaid—as well as coverage loss figures—are highly concerning.
In 2010, for example, CBO attempted to estimate the coverage effects of ObamaCare’s Medicaid expansion, where states were enabled to expand the program to a new class of able-bodied adults. Critically, CBO’s 2010 estimates were made at the time this coverage extension was mandatory, before it was ultimately deemed to be optional for states in the 2012 NFIB vs. Sebelius case.21
In 2010, CBO predicted that mandatory Medicaid expansion in all 50 states would add 13 million able-bodied adults to the Medicaid rolls once the program was fully implemented.22
By 2019, just before the onset of the COVID-19 pandemic, only about two-thirds of states had expanded Medicaid.23 But Medicaid expansion enrollment had reached 19.5 million individuals—well above CBO’s estimate of 13 million in all 50 states.24
In fact, when accounting for CBO’s original estimate applying to all 50 states, CBO’s adjusted error rate of Medicaid expansion enrollment was an astonishing 130 percent.25 CBO acknowledged this problem in 2017, noting that CBO “underpredicted the number of people who would enroll in Medicaid. Fewer states expanded eligibility for Medicaid under the ACA than CBO anticipated, but many more people enrolled in Medicaid in expansion states than CBO expected.”26
Unfortunately, this acknowledgement was too little too late, and CBO’s original inaccurate coverage estimates likely contributed to states adopting one of the largest expansions of welfare in American history.
But CBO’s flawed estimates are not just limited to Medicaid expansion. In every single baseline estimate produced by CBO from February 2014 to July 2021, CBO underestimated total federal Medicaid costs in 2023 by a median of nearly 19 percent.27-48
And, in 2017, CBO infamously predicted that repealing ObamaCare’s individual mandate as part of the Tax Cuts and Jobs Act (TCJA) would eventually cause 13 million Americans to lose their health insurance coverage.49 These coverage losses never happened.
Even their early estimates, not influenced by the COVID-19 pandemic or subsequent policy changes, were wildly off. In 2017, CBO estimated that the repeal of the individual mandate would reduce private insurance enrollment by three million and reduce Medicaid enrollment by one million relative to CBO’s baseline estimates by 2019.50
But two years later, private insurance levels were three million above CBO’s estimates, and Medicaid enrollment was an astonishing 10 million above CBO’s projections.51-54
This embarrassing blunder exposed the office’s weakness in forecasting coverage loss figures—but it certainly has not stopped them from doing so, or halted activists from clinging onto fear-enabling CBO estimates.
Nor are these the only mistakes CBO has made by inaccurately predicting the impact of policy reforms on major health and welfare programs. From pandemic-era Medicaid continuous coverage restrictions to enrollment in subsidized ObamaCare Exchange plans and more, CBO’s list of blunders goes on.55
Simply put, time after time, CBO has demonstrated its inability or unwillingness to accurately estimate the costs and coverage figures associated with Medicaid and health-related reforms. The office’s latest attempts to project the impact of the One Big Beautiful Bill Act are no exception.
CBO’s coverage loss estimates in the One Big Beautiful Bill Act are not to be trusted
In its preliminary analysis of the One Big Beautiful Bill Act’s Energy and Commerce Medicaid subtitle, CBO estimated that, by 2034, approximately 10.3 million Americans would lose Medicaid coverage, and 7.6 million Americans would become newly uninsured.56
Not only are these numbers highly suspect given CBO’s staff biases and previous miscalculations, but they also understate the significance of the fine print in CBO’s own scores. Specifically, of those impacted by the Medicaid provisions:
CBO chooses to include the 1.6 million individuals enrolled in multiple states in their total of those losing Medicaid coverage, even though these individuals would actually retain Medicaid coverage through their state of residence. They also bury the 1.3 million dually eligible beneficiaries in their total and include the 1.4 million illegal aliens as newly uninsured. Meanwhile, even by CBO’s own admission, marketplace and employer-sponsored coverage would both increase.62
Furthermore, CBO’s estimates of Medicaid coverage losses include hundreds of thousands of individuals who are not enrolled in Medicaid—and may have never enrolled in the future—because they are part of CBO’s Medicaid baseline of potential future enrollees.63
Finally, CBO fails to even consider similar scenarios in the past where related provisions were implemented at the state level and coverage increased. For example, in 2005, Tennessee discontinued its expansion of its Medicaid program, resulting in 170,000 adults losing Medicaid coverage.64 Yet, as a result, researchers found “a similarly large increase in private health insurance following the disenrollment, suggesting that public health insurance had been ‘crowding out’ private health insurance.”65 Tennessee saw an increase in labor force participation, job searches, and employment, all while private health insurance coverage gains offset Medicaid disenrollments.66
Not only does CBO fail to examine this vital historical context, but its figures also become blatantly misleading when they include individuals who are not even on Medicaid in the first place, or who are on the program in more than one state and would retain coverage in their state of residence.
Indeed, their estimates become even more clouded by the political bias that underpins CBO’s analyses, effectively discrediting their coverage loss projections. After all, CBO’s Health Insurance Modeling Unit Chief is the same individual largely responsible for the inaccurate coverage loss estimates from the TCJA rollback of the individual mandate eight years ago.67
The Bottom Line: Congress should not trust CBO.
CBO’s reputation for non-partisan budget expertise should be a relic of the past. In reality, CBO analysts are highly partisan individuals whose political views have become intrinsically linked to their work.
Unfortunately, this has manifested itself in incorrect estimates of Medicaid spending, enrollment, and coverage implications time after time, with no reason to believe their estimates of the One Big Beautiful Bill Act will be any different from their past failures.
Congress can and should take CBO’s scores for what they are: inadequate and inaccurate projections from liberal economists whose track record speaks for itself.
