Experts rally in defense of budget referee

Experts rally in defense of budget referee
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Republicans will be making a mistake if they dump Doug Elmendorf from the Congressional Budget Office (CBO), say many budget experts on the left and right. 

Elmendorf is widely expected to get the heave from Republicans, who want to appoint someone more simpatico with their views at the non-partisan office, which serves as a referee in budget fights by estimating the cost of legislation crafted by Congress. 

Conservative groups are urging the GOP to dump Elmendorf, and a report by Bloomberg on Tuesday said he will not be reappointed after his term ends Jan. 3. 

“We think it’s a no-brainer that a Republican-controlled Congress would select a new CBO director and somebody who would be in a position to be able to reform the institution,” Heritage Action communications director Dan Holler said.

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In November, Americans for Tax Reform President Grover Norquist wrote to Speaker John Boehner (R-Ohio) and incoming Senate Majority Leader Mitch McConnell (R-Ky.) to outline the rationale for forcing out Elmendorf.

Republicans’ main issue with Elmendorf’s tenure is the agency’s rare use of “dynamic scoring” in its analyses of legislation.

Instead of CBO’s more frequent use of static scoring, dynamic scoring evaluates the long-term budgetary impacts of bills on the economy. Republicans argue dynamic scoring rules must be fully embraced in order to properly predict the effects of major policy changes such as on immigration or an overhaul of the tax code.

At an event last week, Elmendorf explained CBO does sometimes assess the macroeconomic effects of legislation. Among the instances in which it has been used are the president’s budgets, GOP budget resolutions and the Senate 2013 immigration reform bill. But that is not enough for Republicans.

Liberal budget experts and some conservative economists have rushed to Elmendorf’s defense.

The first CBO director, Alice Rivlin, led the agency from 1975 through 1983 and again during the Clinton administration. Elmendorf has an “excellent track-record,” she said.

“I think they need a very good balanced person,” she said. “I don’t want to second-guess the Congress on what they should do. The important thing is to have a strong analyst who is willing to do the CBO mission, which is nonpartisan analysis of congressional choices.”

E. Gregory Mankiw, chairman of the Council of Economic Advisers under President George W. Bush, wrote a blog post in favor of Elmendorf and argued Presidents Ronald Reagan and Obama reappointed administration officials who were affiliated with the opposite political party.

“I understand that GOP leaders may be tempted to put their own stamp on the Congressional Budget Office. But sometimes the benefits of continuity transcend ideology and political affiliation,” he wrote. “I would encourage the GOP congressional leaders to reappoint Doug Elmendorf as CBO director.”

Michael Strain is a resident scholar and deputy director of economic policy studies at the American Enterprise Institute, a conservative think tank, and said it’s “completely reasonable” to replace Elmendorf. Even so, however, he concluded the better option might be to reappoint him.

“I think he’s done an exceptional job. I think he’s shown real integrity. It makes sense not only to reward him, but it makes sense to keep him there so they don’t change the referee,” he said.

 “If you want to do a big regime change from a substantive standpoint, it seems like a stronger argument to keep him because he knows how the place works, he knows how things are done, he’s been the director for years,” he added.

Bill Hoagland, a senior vice president at the Bipartisan Policy Center, has been floated as one of many possible replacements. He said he would be “flattered” if he were chosen, but he doesn’t think he’s qualified because he doesn’t have a Ph.D.

The three most viable candidates, Hoagland said, are Katherine Baicker, an economist and chairwoman of the health policy and management department at Harvard University; Charles Blauhaus, a Social Security expert and former deputy director on the National Economic Council under George W. Bush; and Donald Marron, who works at the Urban Institute and was an economist on the Council of Economic Advisers under Bush.

Republicans shouldn’t rush to appoint someone new, Hoagland said, since they have more important agenda items to tick off their list such as producing a budget resolution and using reconciliation to usher through major policy changes.  

“I think there will be an effort made to replace him. I think it’s a matter of timing and I don’t think they need to do it right off the bat,” he said.

Boehner and the new president pro tempore, Sen. Orrin Hatch (R-Utah), would be responsible for appointing a new CBO director after recommendations made by the Budget panels, which will be chaired by Rep. Tom Price (R-Ga.) and Sen. Mike Enzi (R-Wyo.).