employee compensation, and labor force participation. Simply knowing, on a timely basis, when money comes into the Treasury—and whether it is income tax or payroll tax—would allow for better understanding of wage and salary movements.
Holtz-Eakin noted the importance of providing access to data used by CBO in order to improve the transparency of the processes, since the ability to explain how forecasting is done is just as important as doing it. For example, allowing outside analysts to produce a parallel set of estimates facilitates two important kinds of comparisons: comparisons that are “prickly and uncomfortable” but that provide information from the mistakes, and ones that provide transparency to the policy process. More important than the numbers themselves is the need to inspire confidence that they are constructed fairly, distributed in a timely fashion, and used in a manner that allows the policy process to evolve smoothly.
In Holtz-Eakin’s view, it is not enough to give the people making economic and budget estimates carte blanche access. No one would know how to assess the relative merit of competing estimates unless the process of constructing those estimates is transparent. He suggested the need to push hard for the private sector to have access to data, not only for their own use, but also as a way to support work of the government.
In response to a comment that extending data sharing is not politically popular, a participant asked if members of Congress had an interest in this topic. Holtz-Eakin responded that a number of members of Congress do have an understanding of the sources of difficulty in making budget projections, and that they, in fact, were sympathetic. He added that there was political interest in improving data but conceded that confidentiality is a major concern. He suggested that the argument for access should be framed so that the benefits (such as improving the ability to accurately decompose sources of economic activity) are clear and expressed in a practical way.