NCPA - National Center for Policy Analysis

Republicans Missing Second Chance On Budget Director

December 16, 1998

In a few weeks, Congressional Budget Office Director June O'Neill will wind up a four-year term. She has been widely criticized for not cleaning out the Democrats at CBO despite Republican control of both houses of Congress since 1994; for not being more supportive of Republican initiatives, such as a cut in the capital gains tax; and for poor economic forecasting.

The indecision of Republican leaders determined CBO's course to a very large extent. Had they gotten a new director into the agency in November or December of 1994, before previous Director Robert Reischauer's term expired, that person would have had a much better chance of making the reforms they wanted. Instead, they allowed Democrat Reischauer to continue to run the agency during a critical time period.

In January 1995, Reischauer was before one congressional committee or another almost daily, denouncing Republican budgetary plans as misguided and unworkable. He also gave innumerable press interviews repeating these criticisms. At a minimum, Republicans should have asked Reischauer to leave on January 3, when his term expired, instead of allowing him to undermine their plans from within for another six weeks.

Now it appears that Republican leaders are all set to make exactly the same mistake all over again. They have known since mid-year that Mrs. O'Neill would not be reappointed. Thus they have had plenty of time to choose a new CBO director and have him or her set to go on January 3, 1999. But as of this date, no action has been taken. This means, in all likelihood, that no one will be available to replace Mrs. O'Neill when she goes, leaving the agency in the hands of people who were hired under Democrat directors and share their political and economic views.

At a minimum, this means that the new director, whoever he is, will have a far more difficult time reforming the agency than if Republicans had made a more timely choice. At worst, Republicans could find themselves severely handicapped next year when critical analyses of issues like Social Security reform are forthcoming from CBO.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, December 16, 1998.


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