The CBO Was Created to Provide a Check on Executive Power

An
unsigned
editorial
in The Wall Street Journal today calls for
Republicans to better control the institutions of Congress—namely
the Congressional Budget Office (CBO) as well as the Joint
Committee on Taxation (JCT)—ideally by abolishing them entirely.
But it does not portray the history and purpose entirely
accurately, and, as a result, is mistaken what would likely happen
if the office were to be shut down.

The CBO, according to the editorial, “was created by Democratic
majorities to counter GOP Presidents and support the Democratic
agenda of expanding government.” This misunderstands the conflict
that gave rise to the office. The legislation that created the CBO
didn’t come from a partisan dispute, but a long-brewing power
struggle between the executive and legislative branches.

As Philip Joyce writes in his
book
on the CBO’s role and history, in the late 1960s and early
1970s, Congress became “frustrated with what it perceived as its
domination by the executive branch in the budget-making process.”
For decades, the legislative branch had been understood to be
subordinate to the administration when it came to budgeting. But
starting with President Lyndon Johnson—a Democrat, notably—Congress
became increasing frustrated with its lesser status in the
budgeting process, and with the way the administration exerted its
greater power. As Joyce notes, President Johnson promised in his
1967 budget report that military operations in Vietnam could be
funded along with new Great Society programs like Medicare and
Medicaid. The following year, however, he called for new taxes the
following year to fund them. Congress wasn’t happy.

This was the essential problem that Congress was trying to
solve: a powerful executive branch with incentives to offer
conveniently misleading, overly rosy projections about the costs
and budgetary impacts of major federal expenses like war and
entitlements. Congressional frustration boiled over during the
Nixon administration in a dispute over impoundment (which as Joyce
explains was less about spending limits and more about which branch
had the authority to enforce spending limits), and the
Congressional Budget Office was born.

Basically, the CBO was created as a budgetary power center that
could check the influence of the administration’s Office of
Management and Budget (OMB). This was practically
explicit in the Senate’s recommendation that legislation be passed
creating what was then referred to as the Congressional Office of
the Budget, because Congress needed “a highly competent staff to
guide it in fiscal policy and budgetary considerations, similar in
expertise of the President’s Office of Management and Budget.”

The Journal editorial argues that because CBO’s
staffers aren’t elected, there’s no democratic accountability. “The
wisest course,” the editorial says, “is to abolish CBO and Joint
Tax and allow open debate about the tax and spending implications
of policy changes. Let the politicians with the authority to make
these decisions be accountable for the results.” The editorial
acknowledges that this may not be possible, and more reasonably
urges Republicans to pick a new CBO director if this is too much,
but this drastic step seems to be the ideal. 

If the CBO were to be abolished, however, the most likely
outcome would be that power and authority would return to the
executive, where OMB (which is also staffed and managed by
unelected individuals), would once again be the most influential
government player in the budgetary ballgame. To the extent that
individual congressional offices or committees might take the job
of estimating legislation and budgetary effects themselves, they
too would be unchecked by any powerful neutral arbiter, which can
also lead to misleading, overly optimistic projections. One of
CBO’s first acts after its creation was to help tank a universal
health care plan put forward by Ted Kennedy—by estimating that the
plan would cost three times more than Kennedy’s office had
indicated. In general, members of Congress, regardless of party,
are not known for the precise or accurate explanations or estimates
of budget details. 

This is not to say that leaving things exactly as they are is
the only reasonable choice. I believe there is a
good case for reform at the CBO
, though the risks of wholesale
overhaul should be clearly understood. (It’s worth
reading
Avik Roy’s measured, well-argued case for reforming the
office, also in today’s Journal.) But if you’re looking to
shut down government offices and agencies, one that tells us how
much stuff costs and how deeply we’re in debt should be pretty far
down the priority list. Simply getting rid of the CBO would further
empower an executive branch that already has too much power, and,
in the process, make wise, informed budgeting and policymaking even
more difficult than it already is. 

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