You are using an outdated browser.
Please upgrade your browser
and improve your visit to our site.
Skip Navigation

Will Republicans Put a Hack in Charge of Washington's Last Impartial Institution?

Alex Wong/Getty Images News

Republicans have a well-deserved reputation for manipulating the budget process. In the next few weeks, they have an important opportunity to help shed that reputation—by making a smart choice to lead the Congressional Budget Office.

The CBO is Washington’s official scorekeeper for fiscal policy. One of its primary jobs is to assess the impact of proposed legislation—how much new spending it will entail, how much new revenue or spending cuts it will require, and in what ways the law will affect the economy. CBO also provides ongoing, regular assessments of the federal budget—how much money the government is taking in, how much it is sending out, how those quantities are likely to change over time. If you have ever paid attention to what the deficit is likely to look like in 50 years—and how those deficits are likely to affect future economic growth—chances are good you were relying on projections from the CBO (or, at least, relying on some other analyst who was relying on CBO).

CBO's current director is Douglas Elmendorf, who first took the job in 2009 after his predecessor, Peter Orszag, left the post to become budget director for President Obama. Like Orszag, Elmendorf is a center- to center-left economist who had worked previously in the Clinton Administration but had a reputation primarily for fiscal conservatism, even when it was politically inconvenient for Democrats. Back in 2009, Elmendorf's resume included tenure on the staff of the Federal Reserve and, in a much more junior role, at the CBO. That previous CBO stint took place during the early part of the Clinton Administration, when it was trying to pass health care reform. During that period, CBO constantly frustrated the White House by projecting that the ill-fated Clinton proposal would cost more than its advocates believed it would.

Since taking over CBO in 2009, the economics of health care have remained a focus of budget policy and Elmendorf has play the director's traditional role of stickler. During the fight over the Affordable Care Act, Obama Administration officials argued that various changes to the delivery of medical care—like greater use of electronic medical records, for example, or penalties for hospitals that had high rates of infection—would lead to more efficient care and ultimately lower costs for government programs like Medicare. Elmendorf made clear that CBO considered evidence of such future savings speculative, and thus refused (mostly) to count such savings in its assessments. This forced the Administration and its allies to include other, blunter instruments for reducing the cost of health care spending, such as imposing a controversial tax (the “Cadillac tax”) that would reduce existing tax breaks for employer sponsored health insurance.

After the law’s passage, some Republicans grumbled that CBO was still too generous in its asssessments of the health care law. As recently as this summer, Elmendorf reiterated during testimony that CBO believes the law will actually reduce the deficit—a judgment Republicans continue to insist is wrong. But, overall, Republicans say they hold Elmendorf in high esteem, and in 2011 they signed off on his reappointment without much fuss, allowing him to serve the full four-year term that ends in January. 

Republican leaders should keep that in mind as they think about who should run CBO next. A number of names are in circulation right now. They include Donald Marron, who was a temporary director of the CBO in 2006 and is now director of economic studies at the Urban Institute, and James Capretta, who served in the Bush Administration and is now at the right-leaning American Enterprise Institute. You can read about these and other candidates in the Wall Street Journal and Roll Call. I haven't performed due diligence on any of these candidates and cannot even confirm that any are actually on the short list—although some of the names, like Capretta, lack the formal economic credentials that CBO directors typically have.

But there’s another candidate Republicans might be considering—and, if they aren’t, whom they should be considering. That would be Elmendorf, who's earned his reputation for both impartiality and transparency. (He's continued the tradition started by Orszag of writing a "director's blog," which has been invalauble for explaining to the rest of the world how CBO operates and makes its judgments.) It’s not clear whether Elmendorf wants to stay on for another term, but over the weekend he got endorsements from two high-profile conservative economists.

One is Greg Mankiw, whose name has also been mentioned as a candidate. Mankiw, a well-known economist at Harvard and writer who worked in the Bush Administration, had this to say about Elmendorf:

Someone recently said to me that the CBO director is not really a player in the political game. He is more like the referee. That analogy sheds light on why Doug is the right person for the job. What do you want in a good referee? Competence and impartiality. Doug has demonstrated both. He is a superb economist and, over the past six years as CBO director, has shown himself to be scrupulously non-partisan.

I understand that GOP leaders may be tempted to put their own stamp on the Congressional Budget Office. But sometimes the benefits of continuity transcend ideology and political affiliation. Ronald Reagan reappointed Paul Volcker, and Barack Obama reappointed Ben Bernanke, despite the fact that both Fed chairs were initially appointed by a president of the other party. In the same spirit, I would encourage the GOP congressional leaders to reappoint Doug Elmendorf as CBO director.

Michael Strain, who is deputy director of economic studies at the AEI and among the most influential economists in conservative circles these days, offered a similarly unambiguous endorsement: 

As Mankiw notes, Republicans might be tempted to “put their own stamp” on the office—which could mean not just installing somebody who has worked for Republicans in the past, but also somebody who believes in ideas like “dynamic scoring” that would make Republican-supported tax cuts seem a lot less costly. But doing so would be seen, rightly, as an attempt to rig the budget game by changing the rules.

In this highly politicized era, impartial sources of relaible policy information are hard to find. CBO is one of the last. Republians would do us all a favor by appointing somebody like Elmendorf—or, better still, reappointing Elmendorf himself.

Update: I originally misidentified Strain as director of economic studies at AEI and called Donald Morran "Douglas." Next time I'll have my second cup of coffee before posting.