Josh O’Harra, John Sabelhaus, and Michael Simpson
The Congressional Budget Office Long-Term (CBOLT) policy simulation model was developed to answer budgetary and distributional questions about Social Security, Medicare, and other long-term policy issues. CBOLT has three distinct solution modes for making projections: static simulations with a fixed macro environment and actuarial projection modules like those used by the Social Security Administration (SSA) and Center for Medicare and Medicaid Studies (CMS); a macro growth model environment with SSA/CMS-style actuarial projection modules; and an integrated micro/macro model with economic and policy outcomes based on a representative population sample. The first mode gives answers that approximate those of SSA and CMS actuaries, the second indicates the first-order effects of considering macroeconomic feedbacks, and the third provides the opportunity to consider behavioral responses and conduct detailed distributional analysis. CBOLT can be solved using either fixed or stochastic values for the key exogenous input variables, so the model is capable of generating confidence intervals for budgetary and distributional outputs.