How the Congressional Budget Office Won Over Lawmakers

Alice Rivlin joked that she owed her 1975 appointment as the first director of the Congressional Budget Office to a Washington stripper.

“I was the Senate candidate, and the House had another,” Rivlin said on Tuesday at a panel discussion that assembled all seven former CBO directors to mark the agency’s 40^th birthday. But when then-House Ways and Means Committee Chairman Wilbur Mills, D-Ark., had his Tidal Basin spill with Fannie Fox, the “Argentine firecracker,” a resulting compromise went her way.  

The most important decision in CBO’s formative days, Rivlin told the hundreds of staff and alumni at the Capitol Visitor Center, “was not to make recommendations in reports. That allowed me and my successors to defend the CBO for 40 years” against attacks from lawmakers upset with a score on the cost of a bill and a “skeptical press that did its best to trip us up.”

Members of Congress at the birthday event offered nothing but praise. “We have the greatest amount of respect for the pivotal work you do,” said Rep. Tom Price, R-Ga., the new chairman of the House Budget Committee. “CBO has documented that Washington spends well beyond its means. But Congress hasn’t always made its work easy.”

Ranking Budget panel member Chris Van Hollen, D-Md., offered “a big bipartisan thank-you” to CBO staff. “Tom and I have enough to disagree on without a fight over budget and cost projections. That would make achieving policy that much harder,” Van Hollen said.

“The CBO began when the executive branch had a lot more power, and now we’re in worse fiscal shape than any of these directors have experienced,” said Senate Budget Committee member Rob Portman, R-Ohio, citing continuing long-term debt despite recent reductions in deficits. “There are not a lot of organizations in government of which we can say this is really important,” he added, recalling how “we really threw CBO numbers around” when he served on the 2011 bipartisan “supercommittee” set up to head off (unsuccessfully) sequestration.

“If not for CBO, Congress might name a few post offices, but we would still need cost estimates,” Portman said.

The seven directors recalled how when CBO took shape in 1975—a congressional response to President Nixon’s impounding of funds to cancel spending in a budget one-tenth of today’s—it struggled to staff up with an uncertain budget and less-than-glamorous digs.

Rivlin’s No. 2, Robert Reischauer (director from 1989-95), described how the fledgling staff moved from a single room in the Dirksen Senate Office building to the basement of the long-gone Carroll Arms Hotel, “where there was no heat at first.” Once heat came, fly eggs hatched “so we had to get fly paper. Then pipes froze and water poured on Alice’s desk,” he said. “We had no franking privilege and had electric typewriters to respond to the wave of resumes we received. I got myself on the payroll system to learn how to do it,” Reischauer said.

Eventually, the staff—which grew to 193 before Congress temporarily capped it—moved to the House side in a building that once held the FBI’s fingerprint collection and for a while was rat-infested. (CBO remains there today at a Second Street Southwest location called the Ford House Office Building).

When Rudolph Penner (1983-1987) took over under President Reagan, “we didn’t take the advice of some to fire all old staff like a congressional office—not if we wanted to maintain the nonpartisan image,” Penner said. “With President Reagan’s ‘Rosy scenario’ budgeting, CBO became the go-to place, but we had no one to back up our opinions.” That mean cultivating two constituents, the press and academia. Though lawmakers occasionally threatened to cut CBO’s funding, “I only got shouted at about three times,” Penner said. At the time, I didn’t feel CBO was embedded in bedrock yet, and each director pushed the envelope on what can they could do. It’s extremely well established today.”

June O’Neill (1995-99), noted that many CBO directors and economists rotate through jobs at the same think tanks, academia and the Council on Economic Advisers. Asked to recall any CBO mistakes, she described being asked to cost out the Reagan administration’s Strategic Defense Initiative, or “Star Wars” missile defense, without a specific bill. “We only costed out some options, low, middle and high, and the opponents seized on the high number,” she said, prompting then-Senate Majority Leader Bob Dole, R-Kan., to say, “CBO killed SDI.”

Dan Crippen (1999-2003) recalled being lectured about a CBO score by a congressional committee chairman who said, “When I go out to eat, I can choose a different restaurant.” Crippen said he replied, “Mr. Chairman, you are part owner of this restaurant.”

Douglas Holtz-Eakin (2003-05) said that when he arrived “the biggest threat was me,” as an ambitious conservative who came from the White House and called 7 a.m. meetings until his secretary said to stop. He counseled staff to ignore complaints from congressmen “who are professional whiners who, like in a basketball game, are trying to soften up the ref for the next call.” The biggest surprise, Holtz-Eakin added, “was that the big fights are over small bills.”

Peter Orszag (2007-08) revealed that when he was director of the Office of Management and Budget, OMB officials actually gamed out what they thought CBO might analyze for some components of President Obama’s health care reform. In today’s political environment, he said, “if CBO didn’t exist, it would have to be created to offset the polarization.”

Rivlin, who served from 1975-83, commended her colleagues for “standing up” to attacks through the years on CBO’s scoring of President Carter’s energy plan, Reagan’s revolutionary budget, President Clinton’s health reform plan and certain advocates for Fannie Mae. “We had no model,” she said, noting that she copied OMB’s organizational chart. “Today’s debt makes CBO’s decisions more important than they were 40 years ago.”

Current Director Douglas Elmendorf, whom the Republicans in charge of Congress recently declined to rehire, said CBO will strive to “make our analysis more accurate, to explain that analysis more clearly and to run our organization more effectively.”