Opinion Editorial | |
| Wednesday, February 4, 1998 | |
Congressional Budget Office Has Many Detractors |
The Congressional Budget Office (CBO) is one of the most powerful economic
policymaking organizations in Washington. Established by the Budget Act
of 1974, CBO was set up to give Congress its own budget numbers and economic
projections. Congress wanted these because it did not like being dependent
on the President's Office of Management and Budget (OMB) for such data.
It believed that having its own independent source of budgetary figures
would strengthen Congress's hand in fights with the White House over budget
priorities. Today, CBO has some 200 professional economists and a budget
of $25 million. For many years, Republicans have believed that the CBO tilts its analyses
against them and in favor of Democrats. Indeed, a 1994 article in the radically
leftist Nation magazine referred to the CBO as "a bastion of Democratic
liberalism." Among Republicans' complaints:
Thus, when Republicans took control of Congress in 1994 they hoped to
put an end to CBO's liberal tilt. As it happened, the four-year term of
the previous director, Robert Reischauer, had just run out. But because
the House and Senate could not agree on a replacement, he was allowed to
stay on for some months. Eventually, Republicans chose June O'Neill, a
respected labor economist, to be the new CBO director. Although not a partisan
Republican, she is conservative and free market-oriented. Congressional
Republicans looked forward to a house-cleaning at CBO and more favorable
analysis of their proposals. Unfortunately, Republicans were disappointed. There were no major staff
changes and most of the top positions at CBO continued to be filled by the
same people who produced the analyses Republicans had long criticized.
Yet despite the lack of any significant changes at CBO, Republicans were
still attacked by Democrats, like Senate Minority Leader Tom Daschle (S.D.),
for politicizing the agency. When CBO produced new analyses critical of Republican proposals for medical
savings accounts and missile defense systems, many Republicans felt betrayed.
Others believe that CBO has undermined efforts to implement "dynamic
scoring" for tax cuts, which would take account of the macroeconomic
effects of such proposals and reduce their budgetary cost. Now this simmering frustration has spilled over into an outright revolt
against Miss O'Neill. According to The Hill newspaper, an effort is underway
to fire O'Neill, even though she still has a year remaining in her term.
A major catalyst for this effort was CBO's poor performance in estimating
federal revenues last year. Just since March, CBO has revised its estimate
of federal revenues in fiscal year 1998 by over $100 billion. The dump O'Neill effort is a bad idea. A better approach would be to
let O'Neill serve out her term while the House and Senate Budget Committees
hold oversight hearings on the CBO. Before a new director is appointed,
Republicans need a better idea of what they can expect from CBO. Otherwise,
they will only end up being equally disappointed with her successor. Source: Bruce Bartlett (senior fellow, National Center for Policy Analysis),
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