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Picking the Right CBO Director

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Picking the Right CBO Director

January 5, 2015

With the term of current Congressional Budget Office (CBO) director Doug Elmendorf expiring, incoming House Budget Committee chairman Tom Price, along with soon-to-be-named Senate Budget Committee chairman Mike Enzi, will need to choose the agency’s next director.  I am confident the eventual choice will be strongly credentialed and capable.  This piece describes some criteria I believe should guide this critical decision.

A number of prominent Republican budget experts, including my former NEC boss Keith Hennessey, Harvard’s Greg Mankiw, and AEI’s Alan Viard, have endorsed the reappointment of Elmendorf.  I agree with their assessments that reappointing Elmendorf would have been a strong choice fully in keeping with Republican objectives of advancing conservative fiscal policy, as well as furthering Congress’s longstanding interest in having impartial, credible leadership at CBO.  

Hennessey and Mankiw offer the apt analogy that CBO should be thought of as the referee of the policy contest, not a participant in it.  Naming an impartial referee in no way conflicts with players on both sides fighting as hard as they can to advance their preferred policies.  If the referee is perceived as biased or incompetent, it hurts both sides, not least because it affects public perceptions of the integrity of the contest and the legitimacy of the result.  Similarly, both sides benefit when the referee’s calls are perceived as fair ones.  

A related and important detail is that the referee’s rulings need to be transparent and clear.  In CBO’s case this means that assumptions and methodologies need to be adequately disclosed, understood, and open to replication or challenge.    

Hennessey offers several examples of CBO under Elmendorf publishing analyses that frustrated advocates on the left.  Others have published examples of CBO’s frustrating those on the right as well.  All this is evidence of Elmendorf’s elevation of straight-up analysis above either side’s policy objectives.  At the same time it should be said that it is not the CBO director’s job to identify and advance the political center; he should go wherever the evidence leads, irrespective of whether this helps advocates in the center or at more distant points on the ideological spectrum. 

When Hennessey and Mankiw published their pieces, the case for reappointing Elmendorf was probably stronger than it is now.  Since that time a number of developments have taken place suggesting Republicans will need to go in a different direction.

In particular, some public commentary about the choice facing Republicans has been concerning.  Too much of it has come dangerously close to suggesting that a director with conservative policy views is somehow less capable of impartiality and objectivity than someone with center-left views.  Some articles have even gone so far as to refer to Republicans appointing someone new as “blocking” the reappointment of Elmendorf, as though reappointment of the other party’s choice is customary rather than the highly unusual move it would be.  Such an approach to the selection process should concern anyone who cares about the long-term integrity of CBO.  If reappointing Elmendorf would perpetuate such a biased mindset, that in and of itself is a compelling reason to make a change.  CBO’s analyses should continually be subject to challenge, revision and refinement irrespective of whether those challenges come from a director with right-of-center or left-of-center views. 

During my career in public service I have developed a maxim:  honesty is easy, it’s objectivity that is hard.  Washington is filled with honest people doing their level best to serve the public good.  What is in shorter supply is self-awareness and objectivity.  Throughout the whole political spectrum nearly everyone regards their own conclusions as “objective” and supported by the evidence.  A good CBO director needs to be self-aware enough to understand the power of this delusion, and to continually invite challenge to his own analytical conclusions as well as those of his agency.  

This lesson has been driven home by my experiences as a Social Security and Medicare trustee.  In that work I never encounter staff who are attempting to doctor the numbers to advance their own policy views or political agenda.  The barriers to impartiality are much subtler; over time certain ways of approaching things can become entrenched, and more resistant to modification and improvement.  The longer this persists, the more certain it is that the simple due diligence of challenging existing methodologies provokes instinctive suspicion; longstanding practices wrongly become regarded as having an inherently superior claim to nonpartisan objectivity.  

For this reason, leadership at agencies such as CBO should never be solely in one party’s hands for too long.  Elmendorf’s commitment to continually refining CBO’s methods has been exemplary; he has frequently brought in outside experts of diverse viewpoints and has on occasion revised CBO’s analysis in response to credible outside criticism.  But he is just one man.  Another director would no doubt challenge CBO’s staff in a different way.  

The last thing that should be allowed to happen at an agency like CBO is for a certain set of analytical views to become synonymous with the nonpartisan standard, such that a challenge from a new direction is treated reflexively as ideological or political.  Future CBO directors should not face staff-level inflexibility built up over a decade or more of one-party leadership.  Staff should instead remain fully accustomed to and comfortable with frequent changes in the types of questions raised by the directors that move through the door.

Some have written about specific analytical changes they would like to see at CBO.  I have my own views about which of Congress’s scorekeeping methods warrant review; I’ve written about some of these, and some I have not.  But I don’t want the director to be selected on this basis; it would be a mistake to select (or to oppose) the next CBO director based on their views of any particular issue.  A good CBO director cannot be reluctant to publish a solid agency analysis simply because it may interfere with the advancement of his subjective beliefs.  He needs to be able to sit in a room with members of Congress, say, “I may (or may not) agree with your policy view, but here is what our analysis shows,” be prepared to defend that analysis – or if not, have a plan to improve it.

The ideal candidate to succeed Elmendorf would have strong analytical credentials and a temperament combining open-mindedness and collegiality with firm resolution once an analytical conclusion has been reached.   He must be able to defend CBO’s conclusions publicly while constantly improving methods behind the scenes.  

Fortunately there is no shortage of candidates with these qualifications.  Several weeks ago Damian Paletta profiled five candidates at wsj.com, of whom exactly four would be excellent choices.  Greg Mankiw’s academic and temperamental qualifications are obvious though it was always doubtful that he would accept the position, long before he publicly endorsed Elmendorf’s reappointment.  Donald Marron has acted as CBO director before and is widely known for impartiality and expertise.  Jeff Brown (U of Illinois) possesses the academic and analytical credibility, and public appreciation for his work has soared in the wake of the wsj.com article.  Kate Baicker (Harvard) possesses all the academic credentials and temperamental characteristics needed for the post and already knows her way around CBO.  Other articles have discussed additional good candidates, such as former Senate Budget Committee staff director Bill Hoagland.

Reappointing Doug Elmendorf would certainly have been a strong choice, but the strongest choice would be for Republicans to appoint his analogue from across the aisle.  I have every confidence that they will do so.

 

Charles Blahous is a senior research fellow for the Mercatus Center, a research fellow for the Hoover Institution, a public trustee for Social Security and Medicare, and a contributor to e21.

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