Opinion: Peter Orszag Isn't the First Budget Director to Speak His Mind

(Sept. 8) -- What is it about White House budget directors? Maybe it's the inevitable clash between the numbers they know are right and the politics they know are wrong. Now comes former Obama administration budget director Peter Orszag to whip the clothes off the budget emperor. In a New York Times op-ed this week, Orszag says a recession is no time to scrap tax cuts for the wealthy -- the wealthy, he says, need that money to buy stuff and do their part to revive the economy. Democratic Party heresy!

But he's not the first or only budget director to get heretical.

Remember President Ronald Reagan's Office of Management and Budget director, David Stockman? He was "taken to the woodshed" by the president after he had the temerity to suggest that Reagan's "supply-side economics" -- those pesky tax cuts for the wealthy again -- was really "trickle-down" economics -- that somehow helping the rich would help the rest of us. Stockman later blamed the Reagan-era recession on Congress for failing to cut budget spending commensurate with the tax cuts.

Stockman survived Reagan. Orszag's already gone. But the truth serum they both took seems to run in the veins of budget directors.

One of President Bill Clinton's budget directors, Alice Rivlin, who today sits on the Obama deficit commission, criticized Clinton for establishing a deficit-reduction "trust fund." She called it "a display device" -- that's budget-ese for window dressing. Apparently Clinton didn't mind the hit; he later appointed her to the Federal Reserve.

And remember Dick Darman? He was OMB director during Reagan's presidency and later for President George H.W. Bush. Darman worked both sides of the fence on taxes and budgets. He first backed Reagan's tax cuts as a way to stimulate the economy.

Later, he was credited with helping Bush break his "no new taxes" pledge in order to get a budget-cutting compromise with Democrats. Bush later lost his re-election bid to Clinton, who campaigned on fixing the economy.

Then there's Mitch Daniels, George W. Bush's OMB director. Daniels is quoted in Ron Suskind's book on the Bush administration, "The Price of Loyalty," as voicing concerns that the tax cuts Bush was proposing "might not do it" for the economy because the budget deficit hole "is getting deeper." Daniels later was quoted as reversing course, after other Bush administration officials expressed shock (shock!) at the heretical comments.

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But back to Orszag for a minute. He doesn't suggest that scrapping the wealthy's tax cuts should be put on hold forever. He would allow all the Bush tax cuts to stay in place for a couple of years, then cut them all off to help deal with the long-term deficit. He wants Congress now to pass a bill that would do both things.

That might be hard, because even if Congress decides to keep the tax cuts in place for now, with an eye to the midterm elections, cutting them off in two years would put them smack in 2012 -- when Obama is running again, along with much of the Senate and all of the House.

With all the budget directors' truth-telling as prologue, here's a piece of advice for the current budget director, Jack Lew: Careful what you say, we'll be listening closely.