Election Impact: Rivlin Says Investment Needed to Boost Economy

Former CBO, OMB head sees common ground on infrastructure, tax reform, Social Security

Alice Rivlin, the onetime director of the Congressional Budget Office and former director of the Office of Management and Budget, said bipartisan agreement is necessary even without divided government. (Chip Somodevilla/Getty Images file photo)
Alice Rivlin, the onetime director of the Congressional Budget Office and former director of the Office of Management and Budget, said bipartisan agreement is necessary even without divided government. (Chip Somodevilla/Getty Images file photo)
Posted November 3, 2016 at 5:00am

Hillary Clinton’s email scandal and Donald Trump’s unconventional presidential campaign has largely drowned out nuanced policy discussion about economic issues. Roll Call spoke with Alice Rivlin, the onetime director of the Congressional Budget Office, and the Office of Management and Budget under President Bill Clinton, about the need for both sides to compromise on debt and entitlements. Rivlin is a panelist at Roll Call’s Election Impact Conference on Nov. 10.

Roll Call: Democrats are talking more about the expansion of government programs, paid family leave, the minimum wage or expanding Social Security. What are your concerns about talk of expanding government with regard to the deficit? 

Alice Rivlin: Well, the debt is a serious problem because on the track we’re on, if we don’t change policies, we’ll have a continuously rising debt, rising relative to any reasonable growth rate in our GDP. 

The reason for addressing it soon is that the things that you need to reduce the rate of growth of debt are all things that take a long time to go into effect.

Especially any changes in Social Security or health care entitlement programs, you wouldn’t have an effect right away.

Tax reform is sort of the same. You need to give people some lead time.

That doesn’t mean we can’t do anything that costs money. I feel strongly that we need a major investment program to grow the economy faster. That’s partly related to the debt. I think we need to spend for sensible infrastructure programs and increasing skills and investing in science and technology.

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RC: You were head of the CBO in the 1980s when Ronald Reagan dealt with Tip O’Neill, and head of the OMB when Bill Clinton and Newt Gingrich made deals on the deficit. What opportunities are there for agreements?

AR: I think there are quite a few and you do need bipartisan agreement, even if you don’t have divided government, because the things we’re talking about, especially entitlement reform and tax reform, are so important to so many people that no party can move unless they have the agreement of the other. 

I think we’ve seen that actually in the Affordable Care Act, where we didn’t have divided government in the first two years of the Obama administration. The fact that the Republicans did not sign on to a major piece of health legislation made it ipso facto controversial.

That kind of thing has to be avoided if you are talking major reform of entitlements or taxes. 

I think there is common ground on infrastructure and other upfront investments. I think there could be on corporate tax reform, but I actually think there could be on Social Security. A Social Security reform that gets the program back on a firm financial basis can involve some expansion of benefits and should, especially for low-income people, as well as future reductions for higher-income people and some revenue.

RC: You worked in the Clinton administration. In what ways would Hillary Clinton be the same and what ways would she differ?

AR: It’s a different situation and a much more difficult situation now. Bill Clinton had a Republican Congress for six out of his eight years and she certainly remembers that experience. We were negotiating all the time with the Gingrich-led House and with the Senate, which went back and forth. 

I think that’s just an illustration of how important it is to negotiate across party lines. In that case, it was quite successful. There were several successful pieces of legislation in addition to very successful budget legislation. But, of course, the economy was growing quite rapidly and we had rising tax revenues, which made it a lot easier to get to a budget surplus.

RC: What are some immediate things a new Congress can do to work with a new president?

AR: A good place to start is infrastructure because there is quite a good deal of agreement. It’s hard to know where to go from there unless you know who won. But Trump has not taken much of any position on Social Security and Medicare. He might be amenable to some bipartisan changes that would restore fiscal solvency to both programs but we don’t know that.

In terms of a Clinton presidency, compromise on where to go on the Affordable Care Act would be a high priority and I don’t think it’s nearly as difficult as it sounds and the other might be Social Security. That’s one that ought to be easy if there’s a bipartisan will to actually tackle the problem and get back on track with minor changes.

RC: What would be Trump’s biggest challenges working with a GOP Congress?

AR: He has not espoused conventional conservative views or tea party-type views. On the other hand, he has made some rather wild proposals about deep tax cuts that would escalate the debt beyond reason and I don’t think he’d have much support for that.