Doing the math on federal policy

Ralph Alswang

The Budget Lab’s principals, left to right: chief economist Danny Yagan, president Natasha Sarin ’11, and executive director Martha Gimbel. View full image

They had at least two things in common: All three of them worked on economic policy in the Biden administration, and all three owned dogs. They would see each other at the Congressional Cemetery in Washington, DC, on weekends, dogs gamboling, and they would talk through personal frustrations with the policymaking process. 

Gripes turned into plans, and plans turned into real collaboration. In April 2024, the three of them—Natasha Sarin ’11, Danny Yagan, and Martha Gimbel—hailing from different corners of government and possessing distinct expertise, cofounded the Budget Lab at Yale Law School, where Sarin is a professor.

The lab specializes in economic analysis of federal policy proposals, issuing public reports on the projected impact of tax cuts, tariffs, and other changes. Its work is regularly cited in media sources from The Wall Street Journal to Last Week Tonight with John Oliver.

“It has certainly gone further much faster than anybody anticipated,” says Gimbel, the Budget Lab’s executive director. Think tanks, she explained, usually take time to establish their reputation. “We’ve been around for just over a year, and it’s already the case that when you see journalists talking about the economic evaluations of policy they will say ‘these come from the usual suspects,’ and we’re included in that. We’ve become a usual suspect.”

Gimbel attributes the lab’s success foremost to its “incredible staff,” but their work fills an unmet need. Most policy analysis looks at effects over a handful of years: The Congressional Budget Office assesses the cost of new legislation over a decade, determining whether or not a given bill will increase the deficit. The Budget Lab, meanwhile, takes a much longer view of not only economic effects, but also broader concerns of social welfare.

“Investments in children really speak to the reason that we were founded,” Gimbel says. “Those are investments that look very different over 30 years than they do over 10 years, and we also wanted to consider non-monetary outcomes instead of just economic effects.” (The Child Tax Credit was one of the first policies they examined.) What, say, does economic investment in children do for economic mobility? They’re currently studying paid family medical leave, which may not generate much economic activity and likely poses budgetary costs, but the team is investigating the possibility that it could reduce rates of neonatal and maternal mortality.

While expanding the scope of analysis, the Budget Lab is also keen to connect abstract and macro-scale policy proposals with quotidian experience. A June analysis of the One Big Beautiful Bill Act finds that the bill’s projected deficit increase will notch up future interest rates. The lab then translates these higher rates into an annual payment increase of $50 on auto loans, $860 on small business loans, and nearly $1,100 on mortgages by 2030.

They do this work quickly, essentially running real-time analyses as policies are announced. They revise their findings as new versions of bills are released, and, perhaps most important, the lab is deeply committed to transparency, publishing detailed methodologies and code online that describe how they arrive at the conclusions they do.

“We’re not trying to further a specific policy outcome. What we are trying to do is change the framework that’s used to evaluate policies,” Gimbel says. She emphasized that it is not the Budget Lab’s job to sway policymakers or voters toward a particular end. Everybody possesses their own utility function, “if you want to get really nerdy,” she said. Individuals value what they value according to a personal and mysterious math. “We just want people to have all the inputs they need to maximize that function correctly.”