The Washington PostDemocracy Dies in Darkness

Wait! The right wants a new CBO director after all.

The irrepressible Grover Norquist. (Bill O'Leary - The Washington Post)

Well, that didn't take long.

After a series of highly-regarded conservatives voiced their support for Doug Elmendorf, the director of the Congressional Budget Office whose term is up in January, Elmendorf haters fired back on Friday, urging Republicans to jettison the Democratic appointee as soon as possible.

Why? Because he is not a "superb economist" or a scrupulously impartial arbiter of national economic policy, as Harvard's Greg Mankiw and Stanford's Keith Hennessey have made him out to be. No, they argue, Elmendorf is a shill for liberal Democrats and CBO has had a lefty tilt ever since he got there six years ago.

This argument is advanced most forcefully in an open letter to GOP congressional leaders by Grover Norquist of Americans for Tax Reform, who works primarily as a political strategist. (Though, to be fair, he does have an MBA and a bachelors in economics from Harvard). Norquist, you may recall, is most famous as the author of the anti-tax pledge that binds virtually every Republican in Congress never to vote to raise taxes.

So why is Norquist against Elmendorf? For one thing, because CBO, under Elmendorf, has not demonized higher taxes. Instead, the agency promotes a "Failed Keynesian Economic Analysis," Norquist says, that asserts that "higher taxes are good for the economy, even to the point of implying that growth is maximized when tax rates are 100 percent."

Did the CBO really say that a 100 percent tax rate would be good for the economy? As evidence, Norquist points to a 2010 post by the Cato Institute's Dan Mitchell, titled "Congressional Budget Office Says We Can Maximize Long-Run Economic Output with 100 Percent Tax Rates."

"I hope the title of this post is an exaggeration," Mitchell writes, "but it’s certainly a logical conclusion based on" CBO's claim that paying down the national debt -- regardless of whether it's through higher taxes or lower government spending -- would be a good thing for the economy.

"There’s nothing necessarily wrong with CBO’s concern about deficits," Mitchell goes on. But "what’s missing from CBO’s analysis is any recognition or understanding that the real problem is excessive government spending."

In other words, what's missing is conservative ideology about fiscal policy. There are other problems:

* Norquist says "Elmendorf's CBO got Grubered," asserting that embattled MIT health care economist Jonathan Gruber authored "CBO's scoring models for Obamacare." This claim is backed up by a video clip of former Senate Finance Committee chairman Max Baucus saying Gruber "helped CBO by giving CBO some information."

Gruber indeed served on a team of more than 20 health economists that regularly advises CBO. But Stuart Butler, formerly of the conservative Heritage Foundation and now at the Brookings Institution, has also served on that team, as has Katherine Baicker, a member of George W. Bush's Council of Economic Advisers. CBO's scoring models were painstakingly developed internally; Elmendorf  did not use scoring models "given to him" by Gruber.

* Norquist says "Elmendorf’s CBO Used Dynamic Scoring Only Once—to Help the Obama Administration" on immigration. In fact, CBO has provided lawmakers with dynamic scores on a number of occasions, according to House Budget Committee chairman Paul Ryan (R-Wisc.), including its analysis of a generic $2 trillion deficit reduction package.

"They already do it now over there. They have the models," Ryan said in an interview earlier this week. "We should make sure they continue to do that kind of work."

CBO's partner, the Joint Committee on Taxation, also generated a dynamic score for the tax reform package drafted by House Ways and Means chairman Dave Camp (R-Mich.) earlier this year, showing it would generate $700 billion in "dynamic revenue" in its first decade.

* Norquist says "Elmendorf chooses to not make CBO's analysis fully transparent," refusing to disclose in full detail their scoring methodologies. Norquist might be right there, because guess who agrees with him? Jonathan Gruber!

Here's Gruber during the health care debate:

MIT economist Jonathan Gruber, who has advised Obama and the CBO on health care, said the agency should be more transparent about its assumptions so independent analysts can get inside the numbers that "literally are going to make or break this debate." Still, Gruber praised the CBO and Ellis -- one of his best PhD students ever, Gruber said -- for making the best of "an unbelievably hard job."
"Is there something obviously wrong with what they're doing? I don't actually think so," Gruber said. "There are 500 things in that model. They're doing as well as they can on 493 of them, and I might quibble on seven."

* Norquist says Elmendorf is a "career Man of the Left" because he served on President Bill Clinton’s Council of Economic Advisors and in the Clinton Treasury Department, was a senior fellow at the "liberal establishment Brookings Institution," and "even got a Ph.D. from Harvard under the dissertation guidance of former Clinton Treasury Secretary Larry Summers." However, Elmendorf also worked under Ben S Bernanke at the Federal Reserve and his two other Harvard dissertation advisers were conservatives -- Mankiw and Martin Feldstein.

Norquist wasn't all by himself on this, though. Ernest S. Christian also wrote a somewhat more tempered piece titled "Stop the Democrat-Sponsored Elmendorf Bandwagon" for the Manhattan Institute that counters the argument, made by Hennessey, that's there's some political advantage in keeping Elmendorf.

So the battle rages. The Republican leaders of the House and Senate budget committees get to make the final call, which they say they are likely to do early next year.