Federal budget expert, former policymaker blasts failed politics for lack of economic progress
Alice Rivlin earned an impressive string of titles during a professional life steeped in economic policy: Founding director of the Congressional Budget Office. Vice chair of the Federal Reserve Board. Director of the Office of Management and Budget.
She was called a “genius” after winning a MacArthur Fellowship in 1983, and touted as “one of the greatest public servants” five years later by the Council for Excellence in Government.
Now she’s the winner of the SIEPR Prize for her countless contributions to her chosen field. And the longtime policymaker has a new self-imposed title: Frustrated moderate.
In a blunt, sometimes funny speech delivered in accepting the prize on April 14, Rivlin let loose on the political gridlock she says is keeping the American economy from reaching its fullest potential and preventing more people from enjoying better lives.
“It is our political system that has broken down, not the economy,” Rivlin said in remarks she described as “the rant of a frustrated moderate who believes that Americans are missing a huge opportunity.”
Considering the 2008 financial crash and the long haul from its wreckage, the U.S. economy is doing pretty well — especially compared to many others, Rivlin said. She credited policymakers with taking prompt, appropriate action in bailing out banks, easing monetary policy and creating a solid — if too small — stimulus package.
But the recovery has exacerbated inequality. Those at the top are doing even better than before, while those in the middle and closer to the bottom are losing jobs and scrambling in a time of stagnant wages. And that’s led to angry voters, stubborn politicians and hostile rhetoric that Rivlin fears will make “post-election action seem like fantasies.”
“Much of this anger is justifiable, but anger is not a strategy,” Rivlin said. “The (presidential) campaign has not produced serious economic policy debate. The questions 'what would you actually do and how would it work' don’t get asked or answered.”
Rivlin’s prescription to get the economy performing better is a big one, but not impossible to fill.
“First, we need policies that enhance sustainable economic growth by increasing productivity,” she said. “Second, we need policies that share the growth more broadly or make the slices of the larger pie more equal.”
And here’s how she suggests doing it: Modernize infrastructure. Invest in education and technical training programs. Pass immigration reform. Restructure the tax code and federal spending programs. Simplify regulations and get rid of bad ones. Control long-term debt.
“We have implemented many of these policies successfully in the past,” Rivlin said, noting that SIEPR scholars have played a role in informing many of them.
“But we can’t get any policies enacted now because our political policymaking process has stopped working,” she said. “We aren’t even trying to solve problems by hammering out the compromises necessary to write laws, get them passed by Congress, and signed by the president.”
They were strong words from someone who spent decades in the mix of policy making.
Rivlin served as vice chair of the Fed between 1996 and 1999. She was deputy director and then the director of the White House Office of Management and Budget during the first Clinton administration.
In 2010, Rivlin was named by President Obama to the Commission on Fiscal Responsibility and Reform and also co-chaired – with former Sen. Pete Domenici – the Bipartisan Policy Center's Task Force on Debt Reduction.
She was the founding director of the nonpartisan Congressional Budget Office from 1975 to 1983 and chaired the District of Columbia Financial Management Assistance Authority from 1998 to 2001. She also served at the Department of Health, Education and Welfare as the assistant secretary for planning and evaluation.
Now a senior fellow in the Economic Studies Program at the Brookings Institution, Rivlin was chosen to receive the $100,000 SIEPR Prize for her long list of contributions to economic policy.
Also a visiting professor at Georgetown's McCourt School of Public Policy who has taught at Harvard, George Mason and The New School, Rivlin says universities have a clear role to play in breaking the culture of political polarization.
“Universities need to help students understand the difference between debate and dialogue,” she said. “In a debate, you’re trying to win. With a dialogue, you’re trying to find common ground. Part of the experience of being at a university is to practice understanding what another person’s point of view is. If we could do that more often, we’d make a great deal of headway.”
As she was delivering her remarks, Bernie Sanders and Hillary Clinton were finishing a loud, heated debate in New York that prompted moderator Wolf Blitzer to admonish the candidates.
“If you’re both screaming at each other, the viewers won’t be able to hear either of you,” he said. “Please don’t talk over each other.”