THE CONGRESSIONAL BUDGET OFFICE: OR, HUBERT HUMPHREY’S REVENGE

We are hearing a lot this week about the Congressional Budget Office because of its pronouncements on the American Health Care Act, the Republican replacement for the Affordable Care Act (Obamacare). In order to understand what is going on, it might be well to think about the Congressional Budget office and about the way it came to be in the first place.

The Founders clearly assumed that the House and the Senate would be responsible for deciding how money would be spent and the President would be there to see that their laws “would be faithfully executed”. Having the Congress decide on what money a president and his departments would spend was always awkward so, in 1921, during the Harding administration, the Congress created the Bureau of the Budget to help create a more orderly process. The Bureau was always “non-political”. Its budgetary experts would simply create a new budget each year based on the previous one. And then, the President would take what they had created and make some last minute adjustments. The finished product would be sent over to the Congress which, with very minor changes, would formally approve it.

The Bureau of the Budget, originally attached to the Treasury Department, was in 1939, moved to the Executive Office of the President. So, for the first time, the budget writing function was formally attached to the White House. It was still an awkward process because the presidents (Roosevelt, Truman, Eisenhower, Kennedy, and Johnson), still were in the position of having to make last minute changes in budgets that the non-political experts in the Bureau had already created. Lyndon Johnson, famously, would keep the lights on all night in the White House and then, just before the budget was sent over to the Congress, would announce how many millions he had saved Americans by working all night. Many came to assume that he simply left the lights on and went to bed.

So, when Richard Nixon took office in 1969, having as Vice President seen how badly the system worked under Eisenhower, he decided to make drastic changes. The Bureau of the Budget now became the Office of Management and Budget. It was now “political”. The president would appoint its director and top officials and they would be responsible to him. And, the newly expanded OMB would now, not just write the budget, but would also send people down into the departments and agencies to oversee its implementation and to report back to the President. Richard Nixon was, probably correctly, concerned that those huge departments, staffed by persons used to working for Democratic administrations, might not be sufficiently responsive to his more conservative policy goals. We can be sure that Donald Trump will feel the same way, and that he will use his OMB to try to keep the departments in line.

Since 1970, the OMB, now through its Budget Review Division, working with the President and the White House staff, sets goals for each department, gets departmental input, and writes the budgets (Essentially there is a separate budget bill for each of the departments.). Those are sent over to the House and the Senate already printed in the form of bills. Congress has given up on writing a budget itself. The House and Senate hold hearings, make some small changes, and send those budget bills to be signed by the President. The departments can then legally withdraw money from the treasury when the new fiscal year goes into effect on October 1st. Too often, because members of Congress can’t agree with each other, no bills for some departments are sent over. The House and the Senate then must agree to continuing resolutions and those departments continue to operate under their old budgets.

A problem: After the OMB was created, it could write budgets for each department because it could use statistics from each department. It had the advantage of having all of the information available to it. But, when the budget bills went to the House of Representatives (The House always begins first.), the departments would refuse to give them the information, because the House was part of a “different branch of government”. Presidents who were Republicans, therefore, could make it harder for the Democratic House to change their budget bills. Democrats in the House were rightfully upset. They had, after all, voted to give those departments tax money to gather that information.

(I remember being in a meeting in the Capitol in 1974, with a small group of Senators faced with that very problem. I was probably the only outsider there! Hubert Humphrey, who had lost to Nixon in 1968, and then had returned to the Senate in 1971, was particularly outraged. The great man, and he was great, who talked about “the politics of love,” was surprisingly and serially profane. I remember being a bit shocked! He vowed to fix the “Bastards!” and, the Democrats did.)

The Democrats used their majorities in the House and the Senate to create the Congressional Budget Office, so that they could collect their own information and do their own cost projections. The CBO, since 1975, has done for the House and the Senate some of the same things that the OMB does for the White House. And, because the CBO is “hired” by both Democrats and Republicans it has been determinedly non-partisan. The current Director is Keith Hall, a Republican, but as Director he does not act as a Republican. The CBO has become one of the few places where people in government can get information not tainted by party politics. That is what has made its negative evaluation of the Republican, American Healthcare Reform Act, so damaging.

So, Donald Trump, and future presidents of either party, can look forward to the legislation they wish to get passed being “scored” by the CBO. The Republicans have faced real criticism this time for trying to rush their health plan through the House in order to avoid what they assumed would be unfavorable scoring by the CBO. It has, unfortunately, become a standard practice for Republicans at the state level to sneak programs through the legislatures they control in the dead of night with no debate. In Washington, the CBO, will help to make dead of night legislating much more difficult. It certainly may well be that the new Republican health plan will die in the House because of the CBO’s report. If it does, Hubert Humphrey was, perhaps, not profane in vain!

H.J. Rishel 3/15/2017