How Heritage analysis changed the debate
March 28, 2008| By Nathaniel Ward
Ten years ago, the consensus in Washington held that Social Security is a great deal for current and future retirees. But today, many liberals who adamantly refuse even basic Social Security reforms nevertheless admit that the program is a bad financial deal for everyone.
Behind this changed consensus is the work of a small but critical department at The Heritage Foundation, the Center for Data Analysis.
Established ten years ago, the CDA today is a leader in the field of economic analysis and statistics. Its pioneering work allows lawmakers to see the real impact of proposed legislation—at a national or state level or even broken down by Congressional districts and zip codes.
» Find out more about the Center for Data Analysis at Heritage.org/CDA/.
The CDA’s work has guided a number of important debates, from Social Security to the economic impact of tax cuts, the costs of labor regulation, the effects of federal police funding and the facts about poverty and income inequality.
“We are one of the few places you can go in the United States to get a micro- and macro-economic analysis of an energy bill,” explains CDA director Bill Beach.
Time and again, the CDA and its team of researchers have proved indispensable in policy debates.
The CDA began its work unofficially in 1993 when Heritage’s experts used sophisticated economic calculations to help drive the opposition to President Clinton’s big-government health care proposal. Then in 1996, our analysts pointed out that the 1993 Clinton tax hikes had slowed economic growth and later calculated the economic effects of repealing the death tax.
These sorts of dynamic analyses, which demonstrated that government policies really do impact economic activity, were groundbreaking work, Beach explains. Heritage was able to perform calculations on the fly in a matter of hours, while the same results would require weeks of work at official agencies like the Congressional Budget Office or the Joint Committee on Taxation.
“It blew people’s socks off,” Beach remembers. “The state of the art [for statistical analysis] was amazingly low.” And Heritage was ahead of the competition.
Heritage’s leadership understood, Beach continues, that “we needed to bring in-house the statistical capabilities we had heretofore relied on out-of-house.” Heritage economists had been forced to turn to slow outside vendors to run even basic analyses. Any tweaks would cost both money and time—and time is critical in fast-moving policy debates.
So in January 1998, the CDA was formally launched. Since then, it has undertaken thousands of economic projects, including more than 800 for members of Congress.
Their work has been critical even at a basic level. Before the CDA set up shop, Beach explains, many lawmakers failed to understand the real-life impacts of the legislation they proposed. They didn’t see, for example, that tax increases or big-government programs could hamper economic growth.
“Our biggest success has been to establish the essential need for statistics in policy debates,” Beach says.
The CDA’s pioneering efforts continue in such areas as war-games scenarios that simulate the impact of terrorist attacks.
“Ten years from now, CDA is going to be known as a leader in health care economics, taxes and national security,” Beach concludes.
Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.
