CBO Director in the Hot Seat as He Pepares to Put a Price on Health Reform
Thursday, June 11, 2009
Douglas W. Elmendorf has toiled for much of his career in the anonymous bowels of the nation's economic superstructure, shuttling among various Washington agencies and the Federal Reserve. So it came as a bit of a shock, friends say, when a powerful senior senator recently felt obliged to inform him that he "is not God."
"You might be Moses," Sen. Max Baucus (D-Mont.) said, "but not God."
Elmendorf has never claimed divine status, but it's not hard to see why some lawmakers think he holds the fate of public policy in his hands. Since he took the helm of the Congressional Budget Office in late January, Elmendorf has delivered a skeptical analysis of a stimulus package intended to rescue the U.S. economy, forecast bigger-than-expected losses from a $700 billion bailout of the U.S. financial system and poured ice water on President Obama's claims that his policies would stabilize the exploding national debt.
Now Elmendorf, 47, faces the toughest task of his brief tenure: attaching a price to a monumental overhaul of the nation's health-care system, which holds out the promise of delivering care to millions of uninsured Americans, cutting costs for an overburdened federal government and sealing the political legacy of a popular new president.
The stakes are enormous. The nonpartisan budget office was created by Congress to serve as Washington's official scorekeeper, offering independent estimates of the cost of legislation. If the CBO says a health plan will break the bank, lawmakers generally will assume it's true.
Baucus, the chairman of the Senate Finance Committee and a key figure in the health debate, has publicly lectured Elmendorf, saying he has a moral duty to be "creative" and deliver the favorable budget estimates "we have to have" to win broad support.
Elmendorf said the CBO would never "adjust our views to make people happy." When a health plan finally emerges, he said, his office will offer an objective analysis, "without regard to the political consequences."
"CBO is not going to make or break health-care reform," Elmendorf said in an interview. "Whether health-care reform happens depends on the judgment of members of Congress. We'll provide information that helps them make that judgment. But the decisions are theirs."
Elmendorf has faced this kind of pressure before. The Harvard-trained economist was part of a team of CBO analysts who in 1994 concluded that President Bill Clinton's plan to overhaul the health system would cost far more than advertised and vastly expand the federal government. The effort soon died, and Robert D. Reischauer, then the CBO director, was accused of delivering the fatal blow.
Elmendorf remembers, as a newcomer to Washington, watching Reischauer engage in those apocalyptic budget battles and thinking that "being director of CBO was the most exciting job I could imagine."
"CBO plays this very special role in the world," Elmendorf said. "It offers an analyst's view about the effects of different policies. And it's untainted by political considerations."
Though Elmendorf was appointed by Democrats and served for three years in the Clinton administration, admirers in both parties said he, too, is largely untainted by politics. The son of a computer programmer from Poughkeepsie, N.Y., Elmendorf attended Princeton and Harvard, where his dissertation advisers included a Democrat -- Lawrence H. Summers, now Obama's top economic adviser -- and two Republicans: Bush adviser Gregory Mankiw and Reagan adviser Martin Feldstein.