The director of the Congressional Budget Office (CBO) announced yesterday that he would resign his post next month to join the Council on Foreign Relations.
Douglas Holtz-Eakin was named Congress’s top budget watchdog in 2003, amid Democratic complaints that House leadership had tapped a Bush administration economist to head the historically nonpartisan CBO. Rep. John Spratt (S.C.), top Democrat on the House Budget Committee, opined at the time that he would have voted “present” on Holtz-Eakin if his vote were more than ceremonial.
But Holtz-Eakin surprised and won over his detractors by taking a relentlessly honest approach to politically sensitive issues. When budget traditionalists lambasted his push for “dynamic” budget scoring of tax cuts — accounting for the cuts’ macroeconomic effects on overall growth — instead of the usual static scores, Holtz-Eakin persisted.
After more than half of the CBO’s dynamic models predicted larger deficits from the president’s tax cuts than the static model, Holtz-Eakin did not back down from his support of dynamic scoring. He gained even more Democratic fans in December 2004, as Bush was preparing his Social Security privatization campaign, by publicly acknowledging that the White House plan would not solve the system’s funding problems and could, in fact, exacerbate them.
“He has done a good job of trying to do an honest assessment of the budget impacts of various things,” said John Irons, director of tax and budget policy at the Center for American Progress. Irons praised Holtz-Eakin for “really instilling a lot of integrity to the office, which you don’t find in other places; for instance, in the Treasury Department,” which liberal economists continue to criticize for obscuring the economic effect of administration policies.
Irons noted that Holtz-Eakin’s sterling academic credentials helped to silence his critics quickly. Holtz-Eakin served as chairman of Syracuse University’s economics department before becoming the top economist for the president’s Council of Economic Advisers, the post he left to head the CBO.
Sen. Kent Conrad (N.D.), ranking Democrat on the Senate Budget Committee, said he was disappointed to hear of Holtz-Eakin’s departure.
“Holtz-Eakin has been an exemplary leader for the CBO. He has led the agency in an open, straightforward, professional, and nonpartisan manner. His expertise, honesty and good humor will be missed,” Conrad said in an e-mailed statement.
Conservative economists, longtime aficionados of Holtz-Eakin’s budget-hawk style, mourned his departure from Capitol Hill.
“He has often told Republicans what they don’t want to hear, as well as Democrats. He has focused on the unsustainability of current spending trends, which showed a certain independence,” said Brian Riedl, top budget analyst at the Heritage Foundation.
Holtz-Eakin will head the Council on Foreign Relations’ geoeconomic studies department, while assuming its Paul Volcker Chair in International Economics, named for the late Federal Reserve chairman. In an e-mailed statement, he called the new positions a “once-in-a-lifetime opportunity.”
“I am deeply honored to have had the opportunity to serve at CBO and will always treasure the vast array of experiences, the agency’s deep sense of purpose in its support of Congress, and the work that was done during my tenure,” Holtz-Eakin added.
Replacing him atop the CBO will be Donald Marron, who has been Holtz-Eakin’s deputy for less than two months. Marron previously held the same White House position as Holtz-Eakin, meaning that another partisan fight over the CBO could be imminent.
Irons said Holtz-Eakin’s performance would not immunize Marron from Democratic charges of fealty to the White House, should congressional leaders choose to elevate him from acting to permanent CBO director.
The CBO director is appointed by the Speaker of the House and the president pro tempore of the Senate — currently Ted Stevens (R-Alaska). But the recommendations of the House and Senate Budget Committee chairmen, Rep. Jim Nussle (R-Iowa) and Sen. Judd Gregg (R-N.H.), will figure prominently in the decision.
“As an economist, I know who Doug Holtz-Eakin was before he showed up here,” Irons said. “With this new person, frankly, I don’t know who they are.”
Holtz-Eakin, a father of young children, commuted home to Syracuse nearly every weekend while leading the CBO.