Douglas Elmendorf: The Numbers Man Whom D.C. Trusts — and Loathes

Douglas Elmendorf doesn't look like the kind of guy who could intimidate those at the pinnacles of power. A soft-spoken academic who coaches his daughters' soccer team, he is described by virtually everyone who knows him as a genuinely nice guy. But consider some of the things that have been said about the director of the Congressional Budget Office (CBO) and his ideas during the past year. "Off the wall," fumed Dave Obey, the famously volatile chairman of the House Appropriations Committee. Senate majority leader Harry Reid has suggested — and not in a nice way — that Elmendorf's presumption is such that "maybe what he should do is run for Congress.'' And Senate Finance Committee chairman Max Baucus has felt the need to inform him, "You might be Moses but not God."

Maybe not, but what comes out of Elmendorf's office is just about the closest thing there is to holy writ in Washington these days. In a nondescript building across a freeway from the Capitol, on a floor where J. Edgar Hoover once housed the FBI's fingerprint files, the CBO has for decades been regarded as the unbiased scorekeeper in the capital's never-ending budget battles, which alone gets to judge whether legislation will add to or lighten the national debt. A bumper sticker posted on a billboard in the hallway gives you an idea of what passes for humor in a place as wonky as this: "I Brake for Unfunded Mandates." See TIME's Person of the Year 2009: Federal Reserve Chairman Ben Bernanke.

The latest dose of reality from Elmendorf's CBO: a forecast that the federal deficit will reach $1.35 trillion this year — $4,400 for every American. All that red ink means the overall debt will rise to $8.8 trillion by the end of 2010, or about 60% of gross domestic product — the highest level of public debt since 1952. "There's a fundamental disconnect between the level of benefits that people want the government to provide, particularly for older Americans, and the amount of resources that people want to send to Washington to pay for those benefits," Elmendorf says. "To make the fiscal policies sustainable will require some resolution of that fundamental disconnect." (See a brief history of the U.S. deficit.)

President Obama's limited spending freeze won't in itself do much to address that disconnect, Elmendorf suggests. The CBO director projects that even if such a spending cap were to extend to all discretionary government outlays (Obama would exempt national security), it would save only $10 billion in the next fiscal year, less than 1% of the budget. Nor is it likely that Congress will make much of a dent in the problem, at least not in the short term. (See 10 players in health care reform.)

Delivering the grim budgetary news is the job of Elmendorf's little agency (250 employees). Over the past year, the CBO took on particular importance in determining the shape and even the fate of Obama's signature domestic initiative, health care reform. It is the CBO that will decide the politically loaded question of whether reform actually saves the Treasury money or instead adds to the deficit. (So far, the CBO has given it a thumbs-up.) The President has focused even more attention on the CBO's numbers by insisting that any bill reaching his desk not add to the deficit over the next 10 years. Obama has even set a target — an overall price tag of $900 billion or less — that has put lawmakers in the position of tweaking and twisting every line of the health care bill so that it comes in under that amount. (Read "How to Understand a Trillion-Dollar Deficit.")

In a job that is subject to enormous political pressure, seen and unseen, from both parties, Elmendorf is nobody's pushover. In July, he rocked Capitol Hill when he testified that instead of bringing the government's health care costs down, earlier versions of legislation under consideration in both the House and the Senate would drive them up faster. "I can think of 30 ways to say that, that would have been honest but would have gotten less in the way of headlines," says Urban Institute president Robert Reischauer, one of Elmendorf's predecessors as the head of the CBO. "I fired off a congratulatory e-mail."

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