Professor works on Bush's new budget plan

By: Nicky Corbett

Posted: 2/18/05

A Syracuse University professor, on leave from teaching since 2001, is now busy overseeing the analysis of President George W. Bush's proposed $2.57 trillion national budget, which was presented to Congress last week.

As director of the Congressional Budget Office since 2003, SU economics professor Douglas Holtz-Eakin manages the research of 230 CBO employees, who are now dissecting the proposed fiscal 2006 budget for a report in March of the plan's fiscal implications.

"It speaks well for the university," said Jeffrey Evans, a senior economics and psychology major. "It develops a good reputation for the economics department as well."

The budget analysis process for the CBO starts with a report put out in Jan. of what the budget would look like if nothing changed, Holtz-Eakin said. Then the president proposes his own budget, and the CBO spends the following month analyzing it.

After the CBO's report comes out in March, Congress then changes the budget around. By April, a blueprint for what Congress wants to do in 2006 is formed. The end result comes out much different than what it started out as, Holtz-Eakin said.

The basic strategy of Bush's proposed budget is to try to reduce the deficit by putting heavy control on domestic spending. Since this accounts for less than one-sixth of the budget, Holtz-Eakin said it makes it harder to cut the deficit by focusing on only this small part of the budget.

The budget does not include the president's tax policy, Social Security or the costs of the Iraq war either, Holtz-Eakin added.

As for the president's goal to cut the deficit in half by 2009, Holtz-Eakin said it looks possible.

"I think the budget arithmetic is there, but whether it matches the political map is another thing all together," he said.

Holtz-Eakin recommends college students pay attention to what Congress decides to do about financial aid - such as Pell Grants and student loans - in the budget revision.

"I can't say with any certainty what will happen, but it's worth watching," he said.

As with the national budget, Congress essentially uses the CBO and Holtz-Eakin to get estimates of the fiscal impacts of different policies in clear and understandable terms, Holtz-Eakin said.

"I think of the CBO as a very high-level consulting firm for Congress," he said.

Holtz-Eakin has been a professor at the Maxwell School of Citizenship and Public Affairs since fall 1990, where he taught courses in public finance, public policy and a graduate course in taxation.

Michael Wasylenko, senior associate dean at the Maxwell School, said Holtz-Eakin was dynamic and imaginative, inventing new courses such as economics for journalists, a class he created with S.I. Newhouse School of Public Communications Dean David Rubin.

"And to top it off, he has a great sense of humor," Wasylenko said. "He's just the kind of professor you'd dream of having."

Holtz-Eakin said he also created a course about public policy towards financial markets, in which he showed movies with related themes, like "Wall Street" and the bank run in

"Mary Poppins" to his students.

Holtz-Eakin went from professor to his current job when House Speaker Dennis Hastert, R-Ill., and the president pro tempore of the Senate, Sen. Ted Stevens, R-Alaska, jointly appointed Holtz-Eakin as CBO director while he was serving as chief economist of the President's Council of Economic Advisers since his leave from SU in 2001.

"They're looking for all those skills wrapped up in one person," Wasylenko said. "It's pretty rare."

The position requires well-connectedness and good relations with the congressional committees who do analyses, as well as with the experts who frame the issues, Wasylenko said.

Holtz-Eakin said the skills required for a CBO director are the same skills he used as chair of the economics department at SU. The director supervises and does research on projects. Then he testifies to Congress, a task Holtz-Eakin thinks of as teaching - only instead of students he teaches congressmen, and the hearing is their classroom.

Staying nonpartisan may be one of the most important skills a director should have, and Wasylenko said Holtz-Eakin pulls it off.

"You've got to hear all sides and get the analysis they want done," Wasylenko said. "You've got to be able to reconcile differences."

Holtz-Eakin said he expects to come back to SU in roughly two years, after the duration of the four-year appointment, and is so busy he hasn't had time to reflect on his experience in Washington, D.C.

"I don't have a perspective on it," he said. "That's my biggest job when I get back (to SU)."