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Extend CBO’s review to presidential policies

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By James McCusker
Herald Columnist
Published:
Forty years ago, almost to the day, Congress did a good thing. It's a perfect time for them to do another.
Most things in Congress, even nothing, happen for a reason. In the case of the Congressional Budget and Impoundment Control Act of 1974, the reason was a person: Richard M. Nixon.
Nixon had been elected President in 1968, and inherited a U.S. economy suffering from levels of price and wage inflation that worsened each year. His concern about this prompted policy moves that even included, despite his distrust of government meddling in markets, a relatively short-lived program of wage and price controls.
Nixon and Congress weren't getting along all that well, and his landslide re-election victory in 1972 made him all the more uncaring about the legislative branch's wishes or prerogatives. He began “impounding” funds appropriated by Congress in order to reduce the impact of government spending on price inflation.
Then the Watergate story exploded and everything changed. Despite his commanding lead in the polls, Nixon had unwisely authorized operatives of his re-election committee to break into the offices of the Democratic National Committee, in the upscale Watergate hotel, in order to install telephone taps and photograph key documents related to the Democrats' campaign strategy. He then orchestrated a cover-up that included lying about his role in it, launching a sequence of events that culminated in his resignation as president, the first and only time this has occurred in U.S. history.
As Nixon's political power waned an emboldened Congress passed the Congressional Budget and Impoundment Act and the president reluctantly signed it into law on July 12, 1974. Thirty nine days later he would board a Marine helicopter on the White House lawn and leave his presidency behind.
The new law reinserted Congress into the federal budget process, big time. It built the committees that form the legislative structure needed to manage government spending. It also limited presidential power to impound funds, and, best of all, created the Congressional Budget Office.
The motivation of Congress in creating its own budget process was some distance from noble. It was engaged in a power struggle with the presidency over who controlled the federal checkbook, a struggle that occasionally extended even beyond party affiliation — something not often encountered in Washington, D.C.
The CBO is specifically and deliberately structured as a non-partisan group, providing support to the legislators much in the manner of the Library of Congress. It is tasked with, among other things, analyzing and assessing the cost and budgetary impact of any legislation that is proposed in the House of Representatives or the Senate.
A recent example of that kind of assessment is the CBO's preliminary estimate of the costs involved in addressing the veterans' health care log jam by providing access to private physicians and hospitals. Equipped with that estimate (about $620 million total, over three years, plus some discretionary spending), the Veteran Access to Care Act of 2014 was passed unanimously by the House on June 10.
Contrast that process to the regulatory changes that affect the federal budget as well as the U.S. economy, sometimes dramatically. President Obama's recent changes to the student loan repayment system, for example, will result in substantial changes in cash flow to lenders during the life of the loans. They will also result in taxpayers having to foot the bill when loan payments aren't enough to pay off the amount borrowed. Yet there is no visible or easily accessible public accounting for the effects of the changes on the federal budget or on our economy.
The Affordable Care Act — Obamacare — has also been repeatedly changed by President Obama since its rollout last November and even before that with waivers and exemptions. It is clear that these changes will have a substantial economic impact, yet lacking a trustworthy, non-political source of data neither Congress nor the public has any real idea of the effect of these regulatory changes on the federal budget or the economy as a whole.
What we really need is a non-partisan analysis of any new regulatory changes so that Congress and the public can see the impact on federal spending. And, forty years after creating it, the time is perfect for Congress to do another good thing and expand the CBO's responsibilities to include assessing the effect of Executive Orders and other regulatory actions on the federal budget.
The president has mentioned several times that despite his disagreements with Congress he still has a phone and a pen and will use them to pursue his policies. He is, of course, free to use them, but that doesn't mean that they are cost-free. And we have a valid need to know what the costs are.
James McCusker is a Bothell economist, educator and consultant. He writes a monthly column for the Herald Business Journal.
Story tags » Economy, Business & Finance

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