The annual Brookings book on the federal budget is out, arriving as usual just after the daffodils.
If the subject of influence in Washington interests you, this series of books deserves your respectful attention. In the 13 years since it began, it has fundamentally changed the ways in which American politicians think about the budget--and it has changed the procedures by which they enact it. That in turn has shifted power, in everything touching economic policy, from the White House to Congress. You can see it currently in President Reagan's struggles with the budget committees over defense spending.
"At first glance, writing a book about the federal budget might seem a little like writing about the Chicago phone directory," the authors wrote, slightly defensively, on the first page of one of the early books. But attentive people in Congress quickly began to see that they were being given the keys to the most complex document in the American political calendar.
The series--the books share the title, "Setting National Priorities"-- began in conversations within the staff of the Brookings Institution, that bland beige building on Massachusetts Avenue stuffed with economists whose field is public policy. The idea immediately appealed to Kermit Gordon, then president of Brookings and previously director of the budget under Kennedy and Johnson. He turned to another former budget director on Brookings' staff, Charles L. Schultze, to head the project.
The first book, published in April 1970, carried an unwelcome message to the Nixon administration. Through the 1960s, there had been a lot of optimistic talk about the "growth dividend," the surplus that economic growth would generate for future budgets. By 1970 Nixon and Congress were collaborating in the fastest run-up of social benefits in American history while assuring their conservative followers that the growth dividend would pay for it all without either deficits or tax increases. The Brookings book led the reader through the calculations showing that by 1970, those dividends had already largely been spent-- mostly on income maintenance benefits.
You may have noticed that budget debates now frequently use figures for spans of years--for example, $1,550 billion for defense over the next five years. In 1970 congressmen knew that presidents often understated programs by disclosing only start-up costs, but they didn't know what to do about it. Brookings showed that the full costs could be calculated; for example Nixon's proposed revenue-sharing plan was carried at a mere $300 million in the 1971 budget, but the Brookings authors noted that the cost to run it a full year would be $5 billion.
The book on the 1973 budget was something of a classic. Emphasizing the enormous expansion of the accepted definitions of federal responsibility over the previous decade and the large backlog of unmet demands of federal help in all of the new programs, it added the prescient comment that as society was getting richer the federal budget squeeze was getting tighter.
The authors went down a list of programs--defense, health insurance, help for the cities and so forth--and laid out for their readers the policy implications of the budget figures--implications that presidents had not always found it desirable to explain publicly.
There is in Washington a large and attentive tribe of amateur economists--congressmen, their staff assistants and experts, newspaper people and so forth. To them, these books were a revelation. By 1974, when Congress enacted the Budget Reform Act, the "Setting National Priorities" books were standard references on the desks of the people working on the legislation. By that law, Congress required itself to abandon tradition and vote on the budget as a whole, with its spending totals and its deficits. It created two new committees--the budget committees--and a technical staff, the Congressional Budget Office, to provide them with their own figures. The CBO's job was to do, on a larger scale and continuously, what the Brookings book does once a year.
One of the Brookings authors, Alice Rivlin, was appointed the first head of the CBO and is still there. Another, Robert Reischauer, was her deputy for some years. A third, Robert Hartman, joined CBO last year, and a fourth, Joseph J. Minarile, is now a taxation specialist for CBO. A fifth, Nancy Teeters, was chief economist of the House Budget Committee until her appointment to the Federal Reserve Board.
Does it make a difference that Congress now has the CBO and its budget analysis?
Put the question another way. Would it make any difference if today there were no figures on spending except those that the president chose to publish, and those only for fiscal 1984 with no longer look into their implications? Every president through Nixon had that advantage in dealing with Congress; none since Ford has had or will have it again. The 1974 Budget Reform Act, with the procedures that have developed out of it over the past nine years, are probably the most influential change in the structure of American government in the past generation. And much of it is built on a small stack of rather dry paperback books.