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Alice Rivlin: Leading Deficit Charge

An expert on fiscal policy, the economist heads efforts to close the nation's budget gap

Alice Rivlin raises her arms to draw a wedge-shaped graph in the air. Diminutive and intense, Rivlin is discussing the soaring federal debt with one arm pointed up — government spending — and one pointed down — revenue.

Her position, at the point in the aerial graph where the spending line and revenue line intersect, puts her in a familiar place, as she says, "in the center of the action." As an economist, a policymaker and an academic, Rivlin has been in the center of budget debates for six presidents in five decades.

'She cares passionately'

"There is literally no one in the country who knows more about fiscal policy," says Chuck Konigsberg, the staff director of the Bipartisan Policy Center debt reduction task force that Rivlin led with former GOP Sen. Pete Domenici. She is also a member of President Obama's debt commission, a reflection of the sharp public focus on the nation's annual budget deficit, which has now reached $1.4 trillion. The commissions, which both produced road maps for eventually balancing the budget, were merely the latest chapter in a long and distinguished career.

"Alice Rivlin is one of a very few economists who have had such a lasting impact and such a respected voice on budget policy," says CIA Director Leon E. Panetta, who was her boss when she served as deputy director of the Office of Management and Budget (OMB) under President Clinton. "She cares passionately about these issues, which is why you've seen her so engaged on them so long after leaving government."

A champion of independent analysis

Rivlin, who turns 80 in March, has bounced back and forth between top government jobs and academia. She has worked for Presidents Johnson, Ford, Carter, Reagan, Clinton and Obama. She was the first director of the Congressional Budget Office (CBO) and she succeeded Panetta as White House budget czar heading the OMB. She dug the District of Columbia out of bankruptcy as head of a control board. She was vice chairman of Alan Greenspan's Federal Reserve Board. In between, she worked at the Brookings Institution, her current base. And she won a MacArthur Foundation genius grant.

"I like the mix of policy analysis and actually doing it," says Rivlin.

Her favorite job — starting the CBO from scratch, in 1975 — combined both economic analysis and policy execution. "It was a fabulous opportunity to start a new organization that was very much needed," she says.

The CBO was designed to give Congress nonpartisan analysis on things such as how much a proposed bill would cost or how big the deficit is likely to be. Her admirers say that the fact it has lived up to its independent billing is due to the foundation she laid from 1975 to 1983.

Rivlin proved the office's independence early — and shocked some Democrats — with a critical analysis of Jimmy Carter's energy plan, according to Rudy Penner, her successor at the CBO.

President Reagan tried to fire Rivlin, but Congress protected her and defended the idea that the CBO was independent from the White House. When Rivlin became OMB director in 1993, she was one of the highest-ranking women in the administration and the first female to serve as OMB head.

Her associate director, Isabel Sawhill, now her colleague at Brookings, calls her an inspiration "both as a woman and an economist, since both of us came of age in an era when 'female economist' was an oxymoron."

Committed to balancing the budget

Rivlin dismisses the importance of her being the first woman in the job, and is more interested in talking about how proud she is that her work there produced a budget surplus in the late 1990s, including the 1993 budget deal with Congress and work on a balanced budget amendment.

During her career, the U.S. budget has ballooned from $269 billion to $3.7 trillion, while the deficit has exploded from $6 billion to $1.5 trillion. But it is the focus today on balancing the nation's budget that has induced her to spend the past year on the two deficit panels.

"If we don't address the rising debt, we will not be able to maintain a prosperous economy," she says. "We can't go on borrowing this much money."

Rivlin, whose office walls have photos of her with Clinton and Reagan, says she's a political moderate. She is a firm believer that closing the deficit requires the "shared sacrifice" of tax changes, spending cuts and reform of entitlements like Social Security and Medicare. She's also delighted with a growing consensus that the nation's income tax system needs to be simplified as part of the process.

"Even in debate over issues, she has a way that doesn't annoy people that she's debating with," says Penner, now at the Urban Institute.

“From AARP’s perspective, Rivlin has mistakenly targeted Social Security cuts to address a deficit that Social Security did not create. And like most economists," says David Certner, AARP’s legislative policy director, "Rivlin’s focus is on numbers. Our concern is that there is not enough attention paid to the impact on real people that would result from cuts to Social Security and Medicare."

Rivlin plans to keep having those debates. Though her 80th birthday is coming, she says she plans to keep doing the work she loves.

"I'm really quite astonished because … many of the issues I've worked on in a long career are at the center of the action and I'm able to play a useful part in it."

Tamara Lytle is a former Washington bureau chief for the Orlando Sentinel.

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