Editorial in the Star

Today in Canada's largest circulation daily paper there is a big editorial in support of the PBO. Read it in the Star here.

One interesting nugget--the Committee is meeting today, apparently. (At 1pm-3pm EDT--so it is happening right now! They are 'in camera' though, so no webcast.)

I wonder whether the committee unanimity will continue? As the Star notes, the opposition members are actually a majority on the committee. If Mr. Ignatieff really wants to 'unshackle the watchdog', he should simply chat with the Liberal committee members, for it is this committee that is doing the shackling, not the Prime Minister directly.

I like the Star's line of reasoning here:

Unfortunately, however, funding of the PBO could be derailed by an arcane dispute. Page has been lobbying to make all his reports public – not only those he undertakes on his own but also those done at the request of individual legislators. Senators and MPs believe they are entitled to ask that research be done on a confidential basis. While that's true, they shouldn't hold the PBO hostage over it. Surely protocols can be negotiated to let Page do his sums and release the findings with minimal delay, if not instantly. It's all public money.

Even better is the point that--no matter who is right about what the current legislation allows the PBO to do--we ought to stay focused on what the legislation should say:

At root, PBO independence and transparency is in the public interest. Prime Minister Stephen Harper should have given the PBO more authority from the start. Unless this mess is resolved, Parliament should revisit the law establishing the office.

The goal here is to have a transparent, adequately funded, and free-to-have-its-own-unmolested-website PBO. Let's get that done.

Hey Nik Nanos

A thought about what would help bring more public interest and pressure to bear on our Parliamentarians about the PBO. We already know that lots of economists support the PBO. That's nice, but not enough.

Wouldn't it be nice to see a poll about public support/trust in the PBO? Maybe not enough of the public is aware of the PBO. I'm no pollster, but I have a sneaky suspicion that the hot/not hot numbers for the PBO would be pretty good. Moreover, while many politicians might be happy to disregard a bunch of economists, they might be less happy to hurt an institution with demonstrated broad public support.

Budget Officer in BC?

An opposition MLA in BC introduced a Private Member's bill (M 201) in the BC legislature on August 31st. Here is what Bruce Ralston said:

This bill amends the Budget Transparency and Accountability Act to create the independent budget officer, an officer of the Legislative Assembly. The independent officer's mandate is to provide objective, timely analysis and updates to the Legislative Assembly about the estimates of government, the state of the province's finances and trends in the B.C. economy, to undertake research regarding the province's finances when requested to do so by certain standing committees and members of the assembly and to provide estimates of the cost of proposals contained in legislation.

The independent budget officer is entitled to a right of access to data necessary for the performance of his or her mandate.

I move that this bill be placed on the orders of the day for second reading at the next sitting after today.

I can't find the text for bill M101 online, but that sounds good to me. Do any other provinces have anything like a PBO?

(Hat tip again to Vaughn Palmer / Vancouver Sun)

The Economist likes Independent Budget Officers

In September, the Economist magazine published an editorial arguing in favour of independent budget officers. They draw a parallel to central banking, which has benefited over the past 20 years from a move toward greater independence.

Here is the core of their argument:

Hence the importance of the other approach: appointing independent budget monitors. Politicians will not (and should not) outsource tax and spending decisions to unelected technocrats, but all countries should have independent bean-counters to pass judgment on their fiscal plans. Even without statutory power, such bodies have an impact. New cost estimates from the CBO, for instance, recently changed the terms of America’s health-care debate. These bodies should not just assess politicians’ plans, but offer simulations of different fiscal paths. Britain’s Tories want to copy the CBO model.

They are right. No politician likes being second guessed, but the greater fiscal credibility that such rules and institutions provide actually increases a finance minister’s room for manoeuvre. It also helps central bankers, by assuaging investors’ fear that bankrupt governments will resort to printing money. Credibility will not magically remove the difficult budget choices that lie ahead. But it is an important place to start.

Hat tip to Vaughn Palmer/Vancouver Sun.

More support of the PBO from the OLO

Another big piece in the Globe today by John Ibbotson that features the PBO. Ibbotson interviews Michael Ignatieff on recent goings-on in Ottawa. Ibbotson mentions that an emerging focus of the Official Opposition is the PBO.

“All I can hold on to is: What is my job?” he said Tuesday in an interview with The Globe and Mail. “And my job is to stand up on behalf of Canadians and say: ‘What the heck are the facts, here? What are you doing with the public finances?' That's why the Parliamentary Budget Officer matters.”

Ibbotson is again (like on Saturday) a little skeptical of this strategy, because of what he perceives as the complexity of the issue. It is true, the details are complex, but so are they with every public policy story.

The details of the 'tainted tuna' affair of 24 years ago were also complicated. But that story dominated the media for weeks. (I have an American acquaintance who told me she arrived in Canada during the 'tunagate' media firestorm. Seeing that the biggest problem in our society was what to do about the tuna--that hadn't actually made anyone sick--she decided she had found a fairly safe and nice place to live!) The story was driven not by the details, but by the principles of transparency and accountability; concepts which are easy to grasp.

In any case, if you're going to do a public policy story then this one about the PBO doesn't strike me as hard to get: "The budget watchdog is being muzzled. That oughtta stop."

I'm encouraged by the issue arising in Parliament. Some economists have asked me 'what should we do next?' We have already raised awareness that a large number of economists across the country support the institution of the PBO. However, we are economists, not elected representatives. We can recommend, advise, and cajole; it is up to our elected MPs to act.

While it is great that the Official Opposition has taken up the cause with some vigour, I encourage MPs from other parties to add their voices of support--in public; in the House. I have heard from some of you privately, but hearing your support in the open would be more helpful.

If I have missed recent statements from MPs of other parties, please do pass them along and I'll be happy to post about them as well.

I'll close this post by repeating the call to action in the original Open Letter that was signed by more than 130 prominent economists from coast to coast:

We call on Parliamentarians of every party to pursue the following actions in support of the Office of the Parliamentary Budget Officer:

• Ensure adequate funding to carry out its mandate
• Independence by making the PBO a full Officer of Parliament
• Public reporting of all analysis.

Ignatieff takes up the cause

On Monday in Question Period, Liberal leader Michael Ignatieff took up the cause of the PBO. In today's Star, he is quoted as asking the Prime Minister:

"Will they unshackle the parliamentary budget officer? Will they provide him with the resources he needs and open the country's books so that Canadians can finally get the truth about the nation's finances?" Ignatieff said in the Commons on Monday.

I am happy that some Parliamentarians are taking up the cause. I know there are MPs from other parties who feel strongly about this issue as well. Let's hear from them, too!

I should note, however, that there seems to be a difference of opinion within the Liberal Party. John Ibbotson noted on Saturday that Liberal Senator Sharon Carstairs (who co-chairs the Committee responsible for the PBO) is one of those pushing a restrictive interpretation of the PBO's mandate:

“I think Mr. Page went down to Washington and saw the Congressional Budget Office and thought, ‘This is what we should be doing,' ” Senator Sharon Carstairs of Manitoba said. “And maybe it is what he should be doing. But as parliamentarians, we are sworn to uphold the laws of Parliament. And this is not his legislative mandate.”

In that way, it is the Liberals as much as the Prime Minister who are doing the 'shackling' of the PBO. As I have said before, my layman's reading of section 119 of the Act does not uncover anything that requires the PBO to refrain from putting his reports out to the public. If anyone wishes to show me how it is legislated that the reports not be made public, I'd be happy to hear that. In the absence of such evidence, I remain with the position that the muzzling of the PBO is just one interpretation of the legislation; a choice that has been made by the Committee.

I'm glad that the Leader of the Official Opposition is on the case. However, I hope Mr. Ignatieff will ask the same question of Senator Carstairs that he asked of the Prime Minister.

UPDATE: An article on the G&M website suggests Mr. Ignatieff is meeting with Mr. Page today.

Liberal Leader Michael Ignatieff raised concerns of a structural deficit in the House of Commons Monday and is meeting with Mr. Page this afternoon to discuss the future of the budget office, which is facing its own financial issues.

PBO piece in the Globe and the 'contrary to our system' argument

There was a long think-piece on the PBO in the Globe and Mail on Saturday. In case you missed it, here is John Ibbotson's article. A fairly fatalistic tone.

Ibbotson did one of those interactive interviews 'live' on the Globe website today here. He laments that the Canadian political atmosphere is much more "closed" than the American one, which thrives on open debate.

Let me pick up on one thing at the end of the Saturday article.

One point of view holds that the office should never have been created in the first place, that in our system of government it is Parliament itself that holds the executive to account and that independent agencies should be discouraged.

This is an argument that I have heard from a couple of prominent people whom I respect. I don't think it stands much scrutiny, however.

Is the point that our system is currently in a state of perfection? Really? Or that our system is so fragile that a small itsy-bitsy movement toward transparency would cause it to wither? Which is it--we're perfect as is, or fragile as glass?

In my view, our system is not static; its DNA frozen in the BNA. It has evolved in many different ways since 1867--you don't need to be a male landowner to vote these days, for example. And we get a secret ballot, to boot. (Although this latter change was thought contrary to the "manly spirit of the British people" at the time.)

So, given that our system has evolved and is evolving, a better argument must be made than simply that it doesn't fit our system, since that is a moving target. A better argument should be based on the merits: does the PBO improve or make worse our system? Why exactly?

As argued in the open letter, I believe that the PBO has much better incentives to produce neutral, credible fiscal forecasts than do other institutions in our society. If this comes at some cost to the purity of our existing system, then a) I'd like to understand better exactly what those costs are and b) I would have to be convinced that those costs are greater than the benefit provided by the PBO.