My Favorite Governmental Department

 

From the time that I was about 19 years old, I have been a rather enthusiastic believer in the free market system. So, it might surprise long time readers of this blog to see me entitle a post, “My Favorite Governmental Department.” I generally like a light cloak of regulation in many areas.

 

What I am I writing about? The Congressional Budget Office. Sound as exciting as watching paint dry? Bear with me a few moments and read on. It has a very interesting history.

 

In the later days of the Nixon presidency Congress was concerned about the White House overreaching a bit into things on Capitol Hill. So, they wanted a new agency that would provide objective advice based on data about the impact on the federal budget on various policy proposals. With Nixon gone in August, 1974, The Congressional Budget Office (CBO) was established. Its first head was a dedicated and straight arrow pro named Alice Rivlin. Her resume later included being a deputy at the Federal Reserve, president of the American Economics Association, and Director of the Office of Management and Budget.

 

Under her leadership and that of her successors, the CBO became perhaps the most respected and influential institution in the DC swamp. Independent statistical agencies such as the CBO are important and need to be protected. They realize that much of their job is providing simple arithmetic which most politicians of both major stripes do not always want to accept.

 

Things went okay under Jerry Ford but Jimmy Carter did not approve when Rivlin & Co. did not accept the president’s plan for improving energy efficiency. Speaker Tip O”Neill, Speaker of the House, said the CBO ”was not helping.” My fellow Boston College alum did not get it. The goal and value of the CBO was to be impartial and Rivlin made sure that it was.

 

The genial Ronald Reagan who succeeded Carter also had issues with the CBO. In 1981, Reagan’s first year, the CBO projected that the budget deficits over the next several years would be far higher than the White House projected (sound familiar?). Reagan dubbed the CBO numbers as “phony.”

 

Is the CBO perfect? Of course not. What I respect is that they do not appear to make politically expedient errors in their calculations. Most of the time they focus on the gap between spending and tax revenue going out a few years. To my cynical eye on governmental projections, they strike me as unbiased.

 

There are other groups in DC that provide statistics. At the top of the list is the Census Bureau, the Federal Reserve, the Bureau of Economic Analysis, and the Department of Agriculture. All have some fine people on board.

 

Politicians do not like these purveyors of official statistics. When running for president in 2016, Donald Trump talked about how weak the US economy was. Officially the unemployment rate was pegged at about 5%. Trump said in speeches that it was 35%. I found that laugh out loud funny as in the Great Depression of the 1930’s unemployment peaked in 1933 at around 25%.

 

The absurdity gets better. When Trump took office in 2017, the official unemployment rate continued to ratchet down. His then spokesmen, Sean Spicer, said without winking, “I talked to the president prior to this, and he said to quote him very clearly. They may have been phony in the past, but they are very real now.”**  Clearly, he was manipulating data for his own purposes.

 

We need some grownups such as the statisticians at the CBO and other departments to give the politicians and the public a dose of reality. The media does not address this as clearly as they should.

 

As the fight over the debt ceiling goes on as I write, I wonder how many in congress have truly wrapped their heads around what $31 Trillion means and what the debt will be a decade from now.

 

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.

 

 

**Source, The Atlantic, March 2017