CBO Developing Conflict-Of-Interest Policy

UPDATE: This story was updated on January 15 with new information from the Congressional Budget Office.

The Congressional Budget Office is developing a formal conflict-of-interest policy for their external advisers, according to an update on the office website. But according to Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa), those disclosures will not be released to the public.

Morning Consult reporting on Monday found that CBO appeared to lack any disclosure process for the more than three dozen external advisers who offer advice and criticism to Congress’ nonpartisan budget scorekeeper. CBO declined to comment on the record for that story.

Grassley told Morning Consult he would follow up with CBO on whether it had a policy, calling the issue a “matter of basic transparency.” After the story was published, Grassley said that CBO staff called his office to explain that a policy was being developed.

“CBO initiated a call with my staff yesterday in response to my interest. CBO said a conflict-of-interest policy for advisory panels is in the works,” Grassley said in a statement to Morning Consult.

Potential disclosures from advisers will not be released to the public or members of Congress, according to Grassley, a point that he criticized.

“At this point, CBO doesn’t plan to allow members of Congress or apparently the public to review the disclosures of potential conflicts of interest from panelists. So-called secret disclosures don’t do much, if anything, because disclosure is key to considering any possible conflict of interest. And disclosure probably prevents some obvious conflicts of interest from happening in the first place. I’ll continue to press CBO for a meaningful disclosure policy. There should be a way to offer transparency that meets the public interest without imposing onerous requirements that discourage people from serving,” Grassley said.

When asked to confirm Grassley’s statement, a CBO spokeswoman declined to comment on the record. But on Wednesday, the office updated the “objectivity” section of their website with details on how the office currently handles potential political conflicts of interest with external advisers. It also says that CBO began formalizing a conflict-of-interest policy in “late 2014” to cover “substantial” political activity, consulting work, and “significant” financial interests. Morning Consult first contacted the CBO with questions about the existence of a conflict-of-interest policy for external advisers on December 17.

The two groups of external consultants—the Panel of Health Advisers and the Panel of Economic Advisers—are mostly staffed with PhD economists who operate as a sounding board for CBO. While their functions and purpose differ, both are influential in their own right.

John Wonderlich, policy director at Sunlight Foundation, said the public release of CBO conflict-of-interest disclosures is vital to ensuring the process works.

“CBO is so central to what Congress does,” Wonderlich said in an interview. “It absolutely makes sense to have conflict-of-interest policy built around public disclosure. And it’s amazing they don’t have that already.”

Wonderlich pointed to the Federal Advisory Committee Act as an example of what principles CBO should follow. That law applies to advisory panels in executive agencies, but calls for public financial and conflict of interest disclosure in order to ensure consensus “reflects expert’s opinions and not someone’s conflict of interest,” Wonderlich said.

Before Morning Consult’s story, it appeared that neither panel was required to let CBO know about other projects they may be working on, either on behalf of private industries that could have a financial interest in how CBO views federal spending, or the executive branch, which CBO was set up to act as a counterweight against.

One example where a formal conflict of interest policy might have been beneficial involves MIT Prof. Jonathan Gruber. Gruber served on the CBO health advisory panel in 2009 and 2010, the same time he had a contract with the executive branch to analyze how much certain health reform proposals might cost the federal government. In 2012, a New York Times profile of Gruber said his position as “an adviser to the influential Congressional Budget Office” also meant he was “perfectly positioned to advise the White House on health reform.” But that connection also raises a conflict of interest between the executive and legislative branches. The CBO was established by the 1974 Budget Act to serve Congress, in large part as a counterbalance to the White House Office of Management and Budget.