Share

Topics: Douglas Elmendorf

CBO's Douglas Elmendorf: An economist armed with a grenade

|
Photo - Congressional Budget Office Director Douglas Elmendorf testifies on Capitol Hill before the House Budget Committee hearing on the CBO budget and economic outlook. (AP/J. Scott Applewhite)
Congressional Budget Office Director Douglas Elmendorf testifies on Capitol Hill before the House Budget Committee hearing on the CBO budget and economic outlook. (AP/J. Scott Applewhite)
Politics,Economy,Budgets and Deficits,CBO,Douglas Elmendorf

In a city where politicians and policy wonks alike use the punchy quote and targeted one-liner to establish position and authority in the public eye, Douglas Elmendorf has the audacity to speak slowly, in full sentences and even thought-out paragraphs.

It is not the kind of behavior, in ordinary times, that would place him in the glare of the public debate.

But these are not ordinary times. Against the backdrop of a ballooning deficit, the debate over health care has turned into a seesaw struggle, and Elmendorf has been thrust into the role of scorekeeper.

Scorekeepers determine outcomes, even in the amorphous game of politics, as official Washington was reminded on July 16 at a Senate Budget Committee hearing. Chairman Kent Conrad, D-N.D., asked Elmendorf if bills coming out of the House would curb federal health care costs.

"On the contrary," Elmendorf said, "the legislation significantly expands the federal responsibility for health care costs."

With that verdict, the mild-mannered director of the Congressional Budget Office set off a storm that helped fuel the cross-country uprising against the health plan. "A devastating assessment," the Washington Post said of Elmendorf's analysis. It sent BlackBerries buzzing all over town, a New Republic blogger reported.

The repercussions -- for the legislation, Congress and the broader political world -- are far from over. Ten days ago, President Obama went on national television and told a joint session of Congress that he would "not sign a plan that adds one dime to the deficits, either now or in the future. Period."

The president was speaking to the nation, of course, but his remarks were also targeted at one man: Doug Elmendorf. Still trying to bounce back after two months of acrimonious debate, Obama plans to appear Sunday on five talk shows to push his health plan.

The director of the CBO does not regularly draw attention much beyond Capitol Hill (quick: Name the previous two CBO chiefs), never mind knock the president for a loop. He manages a nonpartisan agency of economists and analysts whose primary job is to estimate the budgetary effect of proposed legislation.

Dry stuff, perhaps, but sometimes explosive.

Elmendorf was simply carrying out what Dan Crippen, one of his predecessors, described as the occasional task of the director: "Popping out of the foxhole, throwing a grenade, and then ducking back in and waiting for things to sort themselves out."

"Nothing that I had ever said before in my life attracted as much attention as that comment," Elmendorf, 47, said of his testimony on health care costs. "It's not a familiar place for me."

Indeed, nothing about Douglas William Elmendorf -- he of Ivy League credentials and a descendent of Elmendorfs who have populated New York's Hudson Valley since the 1600s -- suggests he was born to toss political grenades.

He grew up in Poughkeepsie, N.Y. His mother was a math teacher, his father a computer programmer at IBM who was, Elmendorf said, in "on the ground floor of computers."

He graduated from Princeton University in 1983. He earned a doctorate in economics at Harvard University six years later and settled immediately into a much-coveted assistant professorship. But he headed to Washington soon after the Clinton administration took office, seeking to fulfill his ambition of a career in public policy, and began laboring in the anonymity of the myriad policy shops here.

The trip from Cambridge to the capital took him to staff jobs at the CBO, the White House Council of Economic Advisers, the Treasury Department and the Federal Reserve.

During the Republican years of George W. Bush, Elmendorf -- who gave $1,000 to Obama's campaign in June 2008, after the candidate had securely established himself as the Democrats' presidential nominee -- returned to the Fed, holding senior staff jobs, and then moved to the Brookings Institution.

At the liberal-leaning think tank, he took over an economics project that had been headed by Peter Orszag, who left Brookings in 2007 to take over the reins of the CBO. When Obama picked Orszag to head the Office of Management and Budget, House Speaker Nancy Pelosi, D-Calif., and Sen. Robert C. Byrd, D-W.Va., president pro tempore of the Senate, appointed Elmendorf to the CBO post. He has been there since Jan. 22.

The CBO, created in 1974, is tasked with figuring out what legislative proposals will cost -- "scoring," in Hillspeak.

It is neither a hotbed of creative, original research -- the mark of a successful academic -- nor home to political movers and shakers. Its director doesn't pull many levers. But the agency's reports and testimony on anticipated costs can add to the weight those legislative levers must move, or lighten their load.

Elmendorf made his first big splash in March when he estimated that Obama's budget would add $9.3 trillion to the deficit over 10 years -- $2.3 trillion more than the White House projected.

A day after he stunned the Senate Budget Committee, Elmendorf put the 10-year cost of the principal House bill at a whopping $1.3 trillion. He subsequently estimated that components of the Senate Health, Education, Labor and Pensions Committee bill would add $645 billion. This week he scored a bipartisan bill put forward by Senate Finance Chairman Max Baucus, D-Mont., at $774 billion, but only because many costs were imposed directly on individuals, companies and states.

Adding up all these dimes can weigh a man down.

"The proponents of legislation want it to cure all the ills of the world and cost nothing," Crippen said. "The opponents want it to do nothing and cost everything."

Elmendorf laughed knowingly at Crippen's summary.

"CBO's job is to report its analysis without regard to the political consequences. We need to constantly strive to do better analysis and be open to suggestions about how to do better -- but we need to always be resistant to pressure to bend that analysis to meet people's political goals," he said in a recent telephone interview. "Every director has stories about resisting pressure."

Indeed, he said, he encountered just such pressure from one of his 535 bosses -- the members of the House and Senate -- on his first day on the job.

"It didn't take long," he said. Displaying the discretion that a Hill staff job often requires, he would not disclose the details.

Nor will he express personal opinions about legislation, or predict the course of the stock market. Indeed, the position carries with it outside scrutiny akin to what the chairman of the Federal Reserve Board faces: The director's market-moving pronouncements can make and break fortunes, let alone influence the course of such legislative behemoths as overhauling the nation's health care system.

And the issues on his desk are, with health care, among the most emotional -- and costly -- to face a Congress: the year-opening fiscal stimulus bill, climate policy, energy, the breadth of national security matters -- all being debated within the framework of the huge budget deficit.

"We have a lot of balls in the air," he said, with typical dry understatement.

Every previous job he held in Washington seemed to provide experience that would prove valuable to someone wrestling with the budget debates of 2009.

He has dealt with macroeconomic issues, Social Security, the financial markets and, of course, health care. He was an analyst at the CBO in 1993 and 1994 when the Clinton administration's health care proposal went down in flames, with the budget office's estimate of its cost fueling the fire.

In a sense, he was prepared for the fires that burn at the intersection of policy and politics by the Harvard committee that reviewed his doctoral thesis: Lawrence H. Summers, who subsequently became treasury secretary, Gregory Mankiw, who later joined the George W. Bush administration as chairman of the Council of Economic Advisers, and Martin Feldstein, who had already served as the chairman of Ronald Reagan's Council of Economic Advisers.

But most important, he arrived with the reputation of a straight-shooter.

"Doug is low-key, an extremely good, careful economist," said James R. Horney, director of federal fiscal policy studies at the Council of Budget and Policy Priorities, a liberal think tank. "I don't think of Doug as a bomb-thrower at all."

Until a senator asks him about the cost of health care reform.

View article comments Leave a comment