“Phony.” That was President Ronald Reagan’s word in 1981 for the numbers produced by the Congressional Budget Office under its first director, Alice Rivlin, because they clashed with the rosy deficit projections from his own Office of Management and Budget. It was far from the last time a politician turned on the agency.
The CBO began operating on February 24, 1975, when Rivlin was appointed its first director. Its origins lie in a fight over who controls federal spending.
A fight with Nixon
The Budget and Accounting Act of 1921 had made the president responsible for budget planning, and handed the White House a budget bureau that was renamed the Office of Management and Budget in 1971. Congress had nothing comparable. It lacked the capacity to set budget priorities or produce its own budget and economic information.
In the summer of 1974 the conflict peaked. Lawmakers objected to President Richard Nixon’s threats to withhold appropriated money from programs he disliked, a practice known as impoundment. Vox describes Congress as then Democratic-controlled, with Nixon embattled by Watergate and unable to push back effectively. The Congressional Budget and Impoundment Control Act passed in July of that year with huge majorities.
The law banned the practice and built a new budget process. It created the House and Senate Budget Committees and, almost as an afterthought in Vox’s telling, the CBO, to give Congress objective, impartial information of its own. Legislators had grown tired of relying on projections from a White House budget office they viewed as frequently biased.
What Rivlin built
Vox credits Rivlin with defining the agency. Citing political scientist Philip Joyce’s book on the CBO, it says she chose to make the office credible and nonpartisan rather than a weapon in Congress’s fights with the White House. She also made it work for all of Congress, not just committee chairs or the majority leadership. And although Democrats appointed her, she issued harsh estimates of President Jimmy Carter’s energy plan.
She also cared about readability. In 1975 she wrote that the CBO should break with “the ponderous prose of most official economic writing” and give congressmen something they could actually read.
The office has had ten directors since; Phillip Swagel took over on June 3, 2019. Per Vox, directors are appointed by Congress for four-year terms, and the staff, about 230 people when the piece ran in 2017, are mostly economists or policy analysts with advanced degrees.
A long line of angry politicians
The pressure has come from both parties. In 1995, Speaker Newt Gingrich complained that CBO director June O’Neill was not counting the benefits of tax cuts. “Every few weeks he would say that he was firing me,” O’Neill told Vox. In 2002 House Budget Chair Jim Nussle said of the agency, “The CBO sucks,” after a farm bill score he disliked.
Under Clinton, Democrats lobbied director Robert Reischauer hard on health reform scoring. His report found the plan would add $70 billion to the deficit over five years, and some Clinton allies blamed it for sinking the effort. Reischauer did not budge. Later, during the Obamacare fight, Democrats found it easier to rework their bill to get a better score than to lean on director Doug Elmendorf.
Elmendorf has called the CBO “an island of nonpartisanship in a roiling congressional sea of partisanship.” Politicians on both sides still cite its numbers when it suits them. As former director Doug Holtz-Eakin put it, “Both sides use CBO.”
