By Sam Baker - 05/01/12 09:00 AM EDT
Douglas Holtz-Eakin learned a clear lesson as the top domestic policy adviser to John McCain’s 2008 campaign: The policy world needed to do things differently.
Holtz-Eakin, a former Congressional Budget Office director, brought a wealth of policy knowledge to the McCain camp. At a low point in the primaries, when many pundits had left the campaign for dead, he worked on a series of detailed policy papers designed to help McCain get a second look from conservatives.
“Someone with more political experience would have seen that coming and would have designed it in a way that anticipated that attack, or at least had the brains to warn everybody: ‘By the way, you political guys who don’t read the policy papers, I’ve put you in harm’s way,’ ” Holtz-Eakin said in a recent interview.
When the campaign ended, he was out of a job and uninterested in having a boss. He wanted to stay close to his children, who had settled near Washington. Moreover, the campaign had crystallized Holtz-Eakin’s belief that Republicans needed to do a better job combining policy and politics.
So, in 2010, Holtz-Eakin teamed up with conservative businessman Fred Malek and former Sen. Norm Coleman (R-Minn.) to start the American Action Forum, a think tank devoted to building — and communicating — the nuts and bolts of a conservative policy argument.
The political right does not suffer from a shortage of think tanks. But many of the more established names are focused on defining (and enforcing) conservative principles, leaving a void for the sort of economic analysis Holtz-Eakin brings to the table.
“When I was on the campaign, the perception was conservatives were out of ideas and were down to ideology, and that was it,” he said. “I’m not sure that was entirely fair, but that was a big thematic at the end of the McCain campaign. And so I thought, anything I do going forward is not going to be based on ideology. It’s going to be based on the numbers. We’re going to have interesting fact-based analysis.”
Just two years later, that analysis is getting attention at the highest levels. When the Supreme Court heard oral arguments last month in the historic challenge to President Obama’s healthcare law, the justices cited Holtz-Eakin’s economic analysis three times — more than any other outside brief on either side of the case.
Holtz-Eakin said he was impressed by the legal community’s interest in economic policy analysis, which he sees as an increasingly prominent part of the national political debate.
“Budget people now matter,” he said. “Paul Ryan is a national figure.”
Ryan, the chairman of the House Budget Committee, is one of the Republican Party’s most prominent voices on healthcare policy, largely because of his controversial plan to partially privatize Medicare. Ryan’s pitch, while polarizing, is unquestionably math-intensive — a sharp contrast with the GOP’s past focus on social issues.
Plenty of budget wonks, academics and think-tankers are often content to reflect on their own ideas while complaining about a political culture that gives short shrift to serious policy work. Holtz-Eakin, though, has come away from a career among Washington’s policy elite convinced that policy experts need to focus on making their case within the real-world political climate.
“I was a college professor for 20 years, and I have a deep love of the production of ideas,” he said. “But I have come to realize the importance of sales, and we spend a lot of time on sales.”
Holtz-Eakin taught at Columbia University and chaired the economics department at Syracuse University before committing to Washington. He doesn’t expect to go back to academia, and sometimes gets frustrated with his former colleagues.
“In an environment like this, where real decisions of real importance to the nation have to be made, I don’t think we have the luxury of waiting two years and getting the details absolutely perfect,” he said. “Take your best shot at it in the moment. Give people the best advice you can. And that’s not an academic mindset.”
Holtz-Eakin left Syracuse in 2001 to be the chief economist on President Bush’s Council of Economic Advisers. He had also worked for the council during the first Bush administration. In 2003, he left the White House for CBO, a change he now sees as the most dramatic in his career.
In addition to adjusting to an office with a nonpartisan mission, Holtz-Eakin came to CBO at a time when he saw the office as weakened by the rise of outside think tanks.
“I spent a lot of time when I was at CBO trying to beef up CBO’s brand,” he said. “I thought it was very important. It’s a superbly high-quality institution.”
Holtz-Eakin, like many Republicans, believes CBO’s cost estimates for Obama’s healthcare law are wrong. But he said that’s partially the result of the rules that CBO has to follow, and that a certain level of second-guessing comes with the territory.
“CBO gets beat up all the time,” he said. “I think they are doing an amazing job … I think it’s probably the best they’ve ever been.”
It was as CBO director that he got to know McCain. A few years later, when McCain asked him to join the presidential campaign, he said yes. Thus began a new level of education in the battle between policy advisers and political strategists.
“You’re bad news … All you do is limit their options. You say things like, ‘That’s not true,’ and they hate that,” he said. “The more you lay down policies, the more you take options off the table and provide opportunities for attack. So it’s a constant tension, and that tension on the campaign is reflected in our national debates.”
Holtz-Eakin is self-critical as he talks about the campaign, but some of McCain’s policies have become more mainstream since 2008. Obama’s healthcare law, for example, includes a tax on certain health plans — a much smaller-scale version of the taxes McCain had proposed.
“We had some really good policies,” Holtz-Eakin said. “In fact, there was a great moment a couple months after the campaign where I was with McCain, and he looks at me and goes, ‘I lost, but you won,’ because the Obama administration was sort of steadily picking up stuff I had advocated.”