The Budget Lab at Yale Will Provide In-Depth Analysis for Federal Policy Proposals

Co-founders Natasha Sarin, Danny Yagan, and Martha Gimbel and team bring a new approach to evaluating long term budget impact.

New Haven, CT - April 12, 2024 - The Budget Lab at Yale, a non-partisan policy research center, launched today to provide in-depth analysis for federal policy proposals impacting the American economy. Recognizing the need for comprehensive assessment beyond financial and macroeconomic impacts, the Budget Lab aims to fill a critical gap in policy evaluation, particularly focusing on the long-term effects of proposed policies on the economy, the income distribution, and recipients. The Budget Lab’s initial analysis, released today, examines both the Tax Cut and Jobs Act (TCJA) and the Child Tax Credit (CTC).  Most individual income tax provisions of the TCJA expire at the end of 2025. See here for a summary with key findings from each analysis. 

The Budget Lab is co-founded by leading economic advisors and academics whose goal is to bring fresh ideas and new methods to policy making.

• Natasha Sarin, Co-founder and President, is a Professor of Law at Yale Law School with a secondary appointment at the Yale School of Management in the Finance Department. She served as Deputy Assistant Secretary for Economic Policy and later as a Counselor to the U.S. Treasury Secretary Janet Yellen.
• Danny Yagan, Co-founder and Chief Economist, is an Associate Professor of Economics at UC Berkeley and a Research Associate of the National Bureau of Economic Research. He was the Chief Economist of the White House Office of Management and Budget.
• Martha Gimbel, Co-founder and Executive Director, is a former Senior Advisor at the White House Council of Economic Advisers, Senior Policy Advisor to the U.S Secretary of Labor, and Senior Economist and Research Director at Congress’s Joint Economic Committee.

"Our focus extends beyond estimating the financial and macroeconomic impacts of proposed policies, further exploring their impacts and effects on the income distribution," said Natasha Sarin. "We are excited to share the tools we have built to analyze the fiscal and social impacts of government policies so policymakers can make better choices."

The Budget Lab’s work will look at issues not included in current budget policy assessment methods, particularly in evaluating the full scope of costs and returns related to policies including the child tax credit, tax cuts, paid family leave, deficit reduction, and universal pre-K. The Lab’s innovative approach bridges this gap by offering a combination of existing open-source models and our microsimulation tax model to provide fast, transparent, and innovative estimates that unlock deeper insights.

Additionally, The Budget Lab will provide estimates on how reforms could affect tax compliance costs. The Budget Lab will also be unveiling an interactive tax simulator that will allow users to input parameters and look at impacts.

"Our approach implements a new lens to improve existing conventions for distributional impacts by showing how policies affect families over time," added Danny Yagan.

One key aspect of the Budget Lab’s commitment to transparency is its open-access model code. The code used to produce analysis is publicly available, fostering trust and allowing policymakers to understand how the Budget Lab arrives at its results.

“Our aim is to provide rapid responses to important policy questions with the ability to think not only about the costs of policies but also about benefits and the return on investments,” said Martha Gimbel. “Our tax microsimulation model, budget estimates, and interactives will paint a broader and more realistic picture of how Americans will be impacted by proposed government initiatives.” 

The Budget Lab is hosting a launch event at the National Press Club on April 12th where the leadership team will share new research on budget scoring for TCJA and CTC.  The event will include remarks by Shalanda Young, Director of the Office of Management and Budget and a panel discussion with Joshua Bolten, former Director of the Office of Management and Budget and White House Chief of Staff for President George W. Bush, Doug Holtz-Eakin, former Director of Congressional Budget Office and economic policy advisor to Senator John McCain, moderated by Greg Ip, Wall Street Journal.  

In addition to the Budget Lab co-founders, the team includes leading economists who have extensive experience in the public sector. Ernie Tedeschi, Director of Economics, was most recently the chief economist at the White House Council of Economic Advisors. Rich Prisinzano, Director of Policy Analysis, previously served at the Penn Wharton Budget Model and for over a decade as an economist in the Office of Tax Analysis in the U.S. Department of Treasury. John Ricco, Associate Director of Policy Analysis, is an economic researcher with a decade of experience building microsimulation models to inform public policy debates and was formerly with the Penn Wharton Budget Model and also a research analyst at the International Monetary Fund. Harris Eppsteiner, Associate Director of Policy Analysis, was a Special Assistant to the Chairman and research economist at the White House Council on Economic Advisors.