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T HE CONGRESSIONAL BUDGET ACT identified two specific roles for CBO in support of the annual budget process—assisting Congress in establishing fiscal policy by enacting the annual budget resolution, and informing Congress on the cost of legislative proposals. In the first, which is the focus of this chapter, CBO was to support the new budget committees as they sought to set overall fiscal policy by enacting, first, the annual budget resolution and, second , the related legislation that followed. The second role—costing budgetary proposals—is covered in chapter 4. Because the budget committees were the new kids on the block, establishing the budget process faced resistance (if not outright hostility) from both Congress and the president. On the congressional side, the existing fiscal power structure (the tax writing committees and the appropriations committees) viewed the new budget process as a threat to their exclusive power over the congressional purse strings. From the president’s perspective, given that the entire point of the new structure was to strengthen the congressional role in budgeting, the new process was a clear threat. And CBO, in its effort to diminish the dominance of executive branch (particularly OMB) numbers, was clearly at the center of this effort. The story of federal budget policy over the past thirty-five years has many subplots —from the establishment of the budget resolution in the late 1970s through the Reagan revolution, the deficit-focused reforms starting in 1985, and the eventual movement of the budget into surplus in 1998 and then back to deficit again in 2002. Those stories have been told by numerous authors in a number of books and articles over the past thirty years.1 But CBO was at the center of all of these debates. This book attempts to tell the story of CBO’s role and the ways that CBO influenced this history. Establishing the New Budget Process After organizing, CBO saw its most important task as developing its first economic and budget report. This report, produced in June 1975, was the first time Chapter 3 Macrobudgeting 54 Chapter 3 that CBO had acquired any visibility with the press, and was released to the press on an embargoed basis. This led to one of the first major flaps that CBO had with the budget committees, because the details of the report leaked before its release. Rivlin told the story this way: I had a big tiff on our first report—the June ’75 one that was about the economy. . . . I had established that set of rules (that the report was to be embargoed ) . . . and a Washington Star reporter called and said he couldn’t come, could I meet with him separately? And it was somebody I knew and trusted so I said OK and he broke the embargo and he said he hadn’t broken the embargo because he hadn’t quoted from the report, only from my conversation . . . . Well, he knew the report was embargoed, but he didn’t know that our conversation was embargoed, he claimed—I found it pretty slippery.2 Interestingly, what caused as much of a problem as the leaking of the report was the surprise that some members of Congress felt at discovering that CBO was preparing its own economic forecast. No one within CBO questioned the necessity of this. They believed that supporting the budget committees in producing a budget resolution meant that CBO had to do something that the Congress had never done before—produce its own independent economic forecast. In short, it is not possible to have independent budget numbers without an independent economic forecast, since so much of the budget depends on the economy. Not all members of Congress, however, seemed to see it as an appropriate function for the new agency. As Bob Reischauer explained, “to underscore how new all this was, when we did our first economic forecast (news of which was published in the Washington Star), Ed Muskie . . . called up Alice and said ‘What the hell are you doing a forecast for? We don’t need a forecast . . . the administration does a forecast . . . and it had never even crossed Alice’s or my mind—or Bob Levine’s, that we wouldn’t do an independent forecast. That just shows you how foreign this whole concept [was] of an entity which decides what is necessary to fulfill its responsibilities without getting formal approval from those that think they are the masters.”3 As President Ford proceeded toward a hoped-for reelection...

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