Robert Greenstein and the Center on Budget get hawkish on the federal deficit

Earlier this year, when President Bush proposed his budget for fiscal 2005, it surprised no one that the administration’s spending plan was denounced by the Center on Budget and Policy Priorities, a liberal think tank traditionally concerned with the effects of federal spending –and especially the lack thereof–on the poor. More of a surprise was the liberal budget watchers’ teaming up with the Concord Coalition, the group of deficit hawks co-founded by the late Sen. Paul Tsongas, to sound the alarm on what would be the largest annual deficit in history, warning of the consequences of the government’s failure to prepare for the looming Social Security and Medicare needs of the baby boom generation.

But this is not the first time that the Center on Budget, as it’s usually referred to in Washington, has rung the fiscal-discipline bell on Bush. In 2003, when the president proposed a dividend tax cut, the Center on Budget was the first to charge that the proposal would spring a leak in the treasuries of struggling state governments, many of which tie their own capital gains taxes to that of the federal government. Similarly, in 2001, when the Republican president proposed eliminating the estate (he calls it “death”) tax, the center didn’t wring its hands over federal anti-poverty programs starved for funds, but cried out on behalf of states that couple their own estate levies to the federal government’s–and that don’t have the federal government’s luxury of running deficits.

In the middle of this newfound fiscal responsibility is Robert Greenstein, the former Newton schoolteacher who founded and is still executive director of the Center on Budget. And he admits that he takes his share of razzing from the liberal precincts of his old stomping grounds.

“A lot of my good friends in Boston think I’m becoming increasingly conservative,” Greenstein says. “They say, ‘Look at all the unmet needs in the country.'” Greenstein sees things differently. “I’m a fiscal conservative, but I remain a liberal on the role of the federal government. To me, the two fit together very well. If you’re not a fiscal conservative, then there’s not going to be any money to do the things we need to do to be a just and fair society.”

It was 32 years ago that Greenstein left his job teaching history and headed to the nation’s capital. Greenstein insists that Washington’s gain wasn’t exactly Newton South High School’s loss. “I found it harder to be a good teacher than to run a government agency,” he says, referring to his stint overseeing the Food Stamps program in President Jimmy Carter’s agriculture department. Harder, too, he says, than working at the Community Nutrition Institute, his first job in Washington, and even harder than founding the Center on Budget and growing it from a staff of six and budget of $50,000 in 1981 to a staff of nearly 80 and budget of more than $8 million today. Funding from the Ford, Annie E. Casey, and Charles Stuart Mott foundations, among others, keeps the center afloat.

Even three decades later, however, the Hub’s tug is strong. Though a Philadelphia native, Greenstein went to Harvard, studied social science and history, and graduated magna cum laude in 1967. After doing graduate work at the University of California at Berkeley and a summer in Washington working for Ralph Nader, he returned to teach at Newton South in 1969. Greenstein remembers fondly his time living in Cambridge’s Central Square, and he still roots for the Red Sox.

The center he runs has other ties to the Bay State. Cindy Mann–an attorney formerly with the Massachusetts Law Reform Institute–worked for the center in the mid-1990s. Mann helped recruit Barbara Sard, an attorney with Greater Boston Legal Services, to run the center’s housing policy section from Boston.

Also in Boston is Jim St. George, who helped develop the center’s State Fiscal Analysis Network. He moved to Boston in 1996 to run the Tax Equity Alliance of Massachusetts (TEAM), which had been created (in part thanks to US Rep. John Olver, when he was a state senator) in 1987 as a political counterweight to Citizens for Limited Taxation. St. George now works on the center’s International Budget Project, which assists like-minded groups in the developing world advocate around budget policy.

Two years ago, TEAM changed its name to the Massachusetts Budget and Policy Center (“Changing their name, but not their stripes,” CW, Fall 2002), drawing it closer in bloodline to the Center on Budget, which is altogether appropriate. The Massachusetts Budget and Policy Center is one of 23 state groups that rely on the center for technical assistance–and foundation funding.

“When we have questions on a complex policy issue like Medicaid they will have staffers who are leading researchers in that area,” says Noah Berger, former state Senate president Thomas Birmingham’s policy director until he joined the center last year, succeeding St. George. “I find them a great model for how to present a strong, clear voice on how budget policy impacts low- and moderate-income people.”

And, in some cases, to change that policy, in ways that appeal to Democrats and Republicans alike. In the early 1990s, only six states offered an earned income tax credit to the working poor. Today, 17 states, including Massachusetts, do so, with more than 4 million people getting state credits. The center’s advocacy for this program was not only relentless but savvy, since the EITC first took form during the Ford administration and always had strong support in the GOP, where it was seen as rewarding poor people who work.

Similarly, the center has used the states’ rights argument to put dents in the Bush tax cuts, which Greenstein and his team vehemently opposed. In an era when liberal groups are struggling to win any concessions in Washington, the center helped convince Congress last year to allow states to set their own tax rates on stock dividends and to provide $20 billion in fiscal relief to the states. In addition, center advocacy prompted 17 states to decouple their estate taxes from that of the federal government, saving state governments, including Massachusetts, about $24 billion.

But the center has fought the Bush Administration at every turn with “cold, hard analysis,” never shrill demagoguery, says St. George. “You know you can rely on the numbers. They don’t print mistakes.” Accuracy, he says, “is as close to a religion at the center as you can get in an organization.”

The Center on Budget also never hesitates to point out what it sees as hypocrisy.

The Center on Budget also never hesitates to point out what it sees as hypocrisy. When the Republicans proposed to reauthorize the 1996 welfare reform bill, for example, they included a provision to increase by 30 percent the number of hours that single mothers on welfare would be required to work to receive benefits. But they included no extra money to help state governments provide child care, a point the center made loudly. Partly as a result, the reauthorization bill has been stymied for the past two years. More recently, when the Treasury Department wanted to impose new filing requirements on applicants for the EITC–presented as an effort to combat fraud–the center successfully lobbied to ease the new restrictions, warning that tough new regulations would prompt many eligible families not to apply.

“A lot of Republicans, of course, don’t like the Center on Budget and Policy Priorities,” says Ron Haskins, a House Ways and Means Committee staffer in 1996 and principal author of the landmark welfare reform bill, which the center opposed. “Part of the reason is that they are so effective.”

Haskins recalls that when the GOP took over the House in the Gingrich revolution of 1994, “One of the first calls I got was from Bob Greenstein.” The two met, talked in measured tones, and have continued to work together. Even though the two clashed on the welfare reform bill, Haskins credits Center on Budget advocacy for blocking large cuts in the EITC.

Haskins often disagrees with center positions, but he never doubts their numbers. “Bob Greenstein would never do anything to harm his credibility,” he says. On Social Security reform, for example, Greenstein says that payroll taxes will be necessary to provide for the boomers, but he doesn’t avoid the unpleasant reality –as many liberals do–that benefit cuts are also in the cards.

As a result, even Grover Norquist, a leading Republican anti-tax activist in Washington, manages something like a compliment for Greenstein & Co. The center’s policies would put the country “somewhere between France and East Germany,” he says. However, he adds, “It’s not that they aren’t well thought out.”

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Democrats, by contrast, rely on the center heavily. When the Congressional Democratic Policy Committee wanted a briefing on the federal budget in January, Greenstein was one of the first they called to testify. More than a few Democratic presidential contenders used center reports as crib sheets during the winter primaries. “All the Democratic candidates were attacking the Bush tax cuts, and they have to get their data and viewpoints from somewhere,” says Chris Edwards, head of fiscal policy studies at the libertarian Cato Institute and a center adversary. “They get it from the center. It’s a very effective group.”

Still, in a Washington controlled by the GOP, keen on cutting taxes and seemingly unconcerned about ballooning deficits, Bay State bleeding-heart-turned-deficit-hawk Greenstein has his work cut out. “I strongly disagree with one policy after another, but the biggest disappointment is that Bush is not leading on these issues,” he says. “Instead, the president is proposing to dig the fiscal hole deeper.”