Yahoo Finance Will New CBO Director Keith Hall Stand Up to Congress?
Keith Hall, a former top economic adviser in the Bush administration and one-time head of the U.S. Bureau of Labor Statistics, was tapped on Friday by congressional Republicans as the new director of the Congressional Budget Office.
Hall, a free-market economist with solid credentials among conservatives, has served as the chief economist of the International Trade Commission since September. The reaction was generally positive to the Republicans’ choice to replace CBO Director Doug Elmendorf, who has served in the position since.
Conservatives Split on Keeping or Ditching CBO’s Elmendorf
“On a daily basis, Congress relies on CBO for non-partisan, unbiased economic and budgetary analysis,” said Rep. Chris Van Hollen of Maryland, the ranking Democrat on the House Budget Committee. “I hope that Director Hall will continue that tradition of independent and professional leadership.”
However, some analysts questioned how well he will do in defending the agency’s findings in tough meetings with lawmakers, as some of his predecessors including Alice Rivlin, Robert Reischauer. Rudy Penner, Doug Holtz-Eakin, Peter Orszag and Elmendorf have had to do.
“I don’t think that Keith has ever had that kind of public confrontation where he has to in public disagree with or correct the chair or a member of the Budget Committee,” said Steve Bell, a former Republican Senate Budget Committee adviser and now a top executive with the Bipartisan Policy Center. “The jury obviously is out on that.”
Hall will formally succeed Elmendorf on April 1, whose departure was foreordained by the Republican takeover of Congress in last November’s mid-term election. The new Republican leadership wanted to put its stamp on that critical position, although some conservatives initially sought to keep the Princeton and Harvard educated Elmendorf on for another term. Elmendorf took charge of CBO in January 2009, succeeding Peter Orszag.
Related: Why Budget Experts Are Worried About the Next CBO Chief
The change in leadership of the non-partisan congressional agency charged with overseeing and analyzing all facets of the federal budget and legislation, comes at a critical juncture. Shortly after taking charge of Congress in January, House Republicans implemented controversial new rules requiring CBO and the Joint Committee on Taxation to use “dynamic scoring” in assessing the impact of changes in the tax law, as a means of more fully taking into account the macroeconomic effects of government actions, and reflecting them in the cost of proposed legislation.
Republicans dating back to the Reagan administration of the 1980s have embraced dynamic scoring, in large measure, because of their belief that tax cuts stimulate economic growth.
Related: Dynamic Scoring Adds More Problems to an Already Flawed CBO Process
However, the practice is controversial because many economists don’t believe that dynamic scoring can produce reliable forecasts. In a recent interview, former Congressional Budget Office Director June O’Neill told The Fiscal Times that dynamic scoring introduced “innumerable problems” into the budget scoring process.
In Elmendorf’s CBO, as it was under his predecessors, dynamic scoring is little-used. The majority of economists believe that macroeconomic effects of policy are so difficult to model that dynamic scoring would produce unreliable data.
The data that is currently produced and that the government acts on is also a shot in the dark—not because the numbers are wrong, but because of the lengthy projections that can’t foresee economic changes in demographics or the economy.
Scoring Hall on Dynamic Scoring
Throughout his career, Hall has specialized primarily on labor and work force issues, the cost of government regulations and other economic data. He has provided little evidence of where he comes down on the dynamic scoring controversy.
“Keith Hall will bring an impressive level of economic expertise and experience to the Congressional Budget Office,” said House Budget Committee Chairman Tom Price, in a statement. “His vast understanding of economic and labor market policy will be invaluable to the work of CBO.”
Related: Obama Sets Stage For Big Budget Showdown with GOP
The choice of Hall was made by the Republican chairs of the House and Senate Budget Committees in concert with House Speaker John Boehner (R-OH) and Senate Majority Leader Mitch McConnell (R-KY). No vote is necessary to confirm the choice.
Sen. Bernie Sanders (I-VT), the ranking member of the Senate Budget Committee, offered one of the few discordant notes about the choice.
“Based on Mr. Hall’s writings, it appears that we have very different views on a range of issues and he would not have been my first choice,” Sanders said. “His opposition to increasing the minimum wage and his resistance to sound strategies for eliminating poverty place him outside the mainstream.”
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