Wall Street Journal columnist Caril Bialik notes that estimates by the Congressional Budget Office of the effects of proposed legislation are likely to be highly inaccurate. He notes several reasons for this, including rules that require CBO to rely on assumptions that everyone knows are false:
The agency is in a tough spot. Its purpose is to give Congress a quick take on how a law would affect the nation’s finances, and occasionally to assess broader economic impact. But, unlike private forecasters, it is constrained by rules on what can and can’t be taken into account. For instance, the CBO assumes existing laws will prevail, or expire as scheduled, even if the political reality likely is different.
Another reason why CBO estimates are unreliable is the CBO refuses to discount future effects, something that is taught to every student enrolled in a course on benefit-cost analysis. In the case of the immigration bill recently passed by the Senate, CBO has company from at least one Washington-based think tank: the Heritage Foundation. Unlike the CBO, however, Heritage economists are not compelled by legislators to rely on substandard and misleading methods.