Founding director of the Congressional Budget Office, economist Alice M. Rivlin (born 1931) has leveraged her financial savvy into a key post with the Democratic administration of President Bill Clinton.
Considered to be one of the foremost analysts of the U.S. economy, Alice M. Rivlin has never been known to look at the country's financial forecast wearing rose-colored glasses. Independent-minded, Harvard-educated, and with years of experience in both the public and private sector, Rivlin has been credited with molding the fledgling Congressional Budget Office (CBO) into a respectable government agency responsible for long-term analysis and planning of the nation's government spending. Attempting to balance the usual optimism surrounding economic forecasts by the executive branch of government, Rivlin has been careful to act as a counterbalance, employing a conservative, even pessimistic, outlook in the economic projections she generates upon congressional request. Appointed the founding director of the CBO in 1975, Rivlin has worked in the administrations of presidents Lyndon Johnson, Jimmy Carter, Gerald Ford, Bill Clinton, and Ronald Reagan, moving from the CBO to the second most powerful government position associated with the nation's economy: that of assistant chairman of the Federal Reserve Board.
Rivlin was born March 4, 1931, in Philadelphia, Pennsylvania. The daughter of Allan and Georgianna Mitchell, she and her family soon moved to Bloomington, Indiana, where her father held a professorship in nuclear physics at the University of Indiana. Returning to Pennsylvania after high school, she was accepted by Bryn Mawr College and graduated in 1952, magna cum laude. Rivlin went on to obtain an M.A. in 1955 and a Ph.D. in economics from Harvard University's Radcliffe College in 1958. In 1955 she married attorney Lewis A. Rivlin, and relocated to Washington, D.C. The Rivlins would have three children: Catherine Amy, Allan Mitchell, and Douglas Gray, before divorcing in 1977. She was married for a second time, to Sidney G. Winter, in 1989, and still makes her home outside the nation's capitol.
In 1955, while still studying for her doctorate at Radcliffe, Rivlin joined the staff of the Economic Studies Division of the Brookings Institution, a prestigious, liberal "think tank" located in Washington, D.C., as a research fellow. After graduating from Radcliffe, she served that organization until 1993, moving up to senior staff economist in 1963, and senior fellow from 1969 to 1975. Embarking on a full-time career in government in the mid-1960s when she was thirty-five, Rivlin took absences from the Brookings Institution from 1966 to 1969 to work as deputy program coordinator, then assistant secretary for planning and evaluation, for the newly created U.S. Department of Health, Education, and Welfare (H.E.W.), a part of President Johnson's visionary Great Society program, and from 1975 to 1983 to serve as founding director of the Congressional Budget Office established by the Congressional Budget and Impoundment Control Act of 1974 as a reaction to the domination of congressional spending by the executive branch during the presidency of Richard M. Nixon. The CBO allows Congress to have independent forecasts that can enable them to view economic predictions issuing from the White House with greater scrutiny.
While some policymakers feared that Rivlin would use her new position in the CBO as a launching ground for her own pet social and economic policy programs-Maine senator Edmund Muskie reportedly called Rivlin on several occasions, criticizing even informational bulletins issuing from her office that were not specifically authorized by the congressional act-it was soon made clear that she would run the CBO as a neutral office responding to the directives of both House and Senate-functioning as what she has termed the "official purveyor of bad news to the Congress." Her service to other organizations has included acting as consultant to the House committee on education and labor in 1961, as chairman of the National Academy of Sciences/National Research Council's committee on federal agency evaluation research, as trustee for numerous public service organizations, and as a member of the board of directors of such corporations as Union Carbide and Unysis.
Publishes in Many Aspects of Economics
In addition to her work for both the Brookings Institution and the federal government, Rivlin also wrote several books during the 1960s and 1970s. An outgrowth of her job with the H.E.W., a discussion of federal subsidies of undergraduate and graduate education titled The Role of the Federal Government in Financing Higher Education was published in 1961, along with several other relatively technical books on budget, tax, and other public policy issues. Other books have included Microanalysis of Socioeconomic Systems (1961), a lecture series made at the University of California, Berkeley, and published as Systematic Thinking for Social Action (1971), and Economic Choices, a book coauthored with others and published in 1982. In 1971 she wrote a regular column published in the Washington Post and contributed her insights into economic and public policy topics in articles for a variety of magazines and newspapers.
Weathers Reaganomics in the 1980s
In 1982, after Rivlin ran afoul of newly elected President Ronald Reagan by doubting the accuracy of his projected budget deficit, several congressmen attempted to remove her from the position at the CBO; while such efforts were unsuccessful, she decided to voluntarily step down in 1983. During the remainder of the 1980s, while the presidency was held by Republicans Reagan and George Bush, Rivlin returned to the Brookings Institution, where she served as director for economic studies between 1983 and 1987. She was awarded a MacArthur Foundation Prize fellowship in 1983 and was elected national president of the American Economic Association in 1986. She also wrote and published the 1988 work Caring for the Disabled Elderly: Who Will Pay?, and Reviving the American Dream, a proposal regarding altering the way in which the federal government relates to the U.S. economy that she released in 1992.
In Reviving the American Dream, which Rivlin wrote from the point of view of a "fanatical, card-carrying middle-of-the-roader, " she cited the budget deficit as "the biggest single impediment to reviving the American economy" and addressed the drop in real income of U.S. families despite rising income levels. To bolster the U.S. economic future, she outlined a plan that would allow the states to assume a greater portion of the responsibility for economic policy-making. New York Review of Books contributor Robert M. Solow commented at length upon Rivlin's proposals, and while commending her approach, detected some weaknesses. Her plan, he noted, makes two questionable assumptions: the first, that state governments have evolved to the point where they can "take on and carry out additional responsibilities without the parochialism, racism, and corruption that justified the growth of federal power in the first place"; second, that U.S. voters will support taxes only when they can clearly see the results of their votes and their tax dollars. "History does not justify much confidence, " noted Solow, adding that while Americans demand a balanced budget, they are less sure about which taxes they would be willing to accept to see their demands fulfilled.
Gains Appointment by Clinton
Rivlin served as First Professor of Public Policy at George Washington University during the 1992-93 academic year. When Bill Clinton won election to the presidency in 1992, Rivlin was ready to step back into politics. In January of 1993 she was appointed by President Clinton to a post as deputy director of the Office of Management and Budget, under the directorship of California Congressman Leon Panetta.
After confirmation by the Senate, Rivlin remained OMB's deputy director for a year before being promoted to director in response to Panetta's move to the position of White House Chief of Staff; her appointment was confirmed by the U.S. Senate in October of 1994. Contrasting the then 63-year-old Rivlin with her predecessor, the Congressional Quarterly quoted observers as noting that, unlike the gregarious Panetta, "Rivlin … is comparatively shy and reserved … She's not a politician, she's an analyst."
Despite Rivlin's criticism of several of his policies, including his plan for a deficit reduction trust fund, which she dubbed a "display device, " President Clinton continued to express confidence in her abilities and insight. On April 12, 1996, she was nominated for the position of vice-chairman of the Federal Reserve System, the central bank of the United States. This new position would place her immediately under that of Federal Reserve director Alan Greenspan, a man whom many have called the most powerful man in the world due to his control of the U.S. economic system via interest rates and the money supply.
While Rivlin continued to draw confidence from liberal Democrats, partisanship dictates that Republicans would take her economic policies to task. Criticism of her policies has ranged from her continued advocacy of large central governments (either state or federal) as controlling policymakers in lieu of private industry, and her lack of support for tax cuts that would boost investment spending. "For all her distinguished public service … and as OMB director … Mrs. Rivlin refuses to peer into the twenty-first century, " maintained New Republic commentator Lawrence Kudlow. "She does not yet grasp that the public believes the Federal Government is too big, costly, and wasteful, controlling too much of daily life." Despite such criticisms, which were reflected in the limited support given her by Republican senators during her FRB confirmation, Rivlin's nomination passed by a vote of 57-41, placing her in line to assume the position of director of the Federal Reserve when Greenspan's term expires in the year 2000.
Further Reading on Alice M. Rivlin
Schick, Allen, Congress and Money, Urban Institute, 1980.
Congressional Quarterly Weekly Report, July 2, 1994, p. 1770; October 1, 1994, p. 2769; June 22, 1996, p. 1746.
Forbes, November 21, 1994, p. 26.
Fortune, June 29, 1992, pp. 25-26.
National Review, November 21, 1994, p. 30.
New York Review of Books, March 25, 1993, pp. 12-18.
Washingtonian, October, 1992, pp. 33-41.