Her Hand Is on the Future

By Marshall Loeb

It would not be a stretch to call her Alice in Wonderland. In the behind-the-mirror world of Washington, where many things are curiouser and curiouser, and even the knaves have to run faster to keep up, Alice Rivlin is the self-professed "official purveyor of bad news to the Congress." As head of the Congressional Budget Office, she and her 200-person staff figure out what proposed programs will really cost, and her cool counsel has stopped many of them in the gleam-in-the-eye stage.

When she got the job in 1975, Economist Rivlin, 48, an Indiana-bred Bryn Mawr magna who had labored 22 years at the left-listing Brookings Institution and in the bureaucracy, faced two hurdles. Many in Capitol Hill's chauvinist bastion gossiped that the Judy Garland look-alike would be, well, too feminist, too liberal. But she has proved that sex does not count in political economics, and her balanced judgments have made her popular even with conservatives.

As much as anybody hi Washington, Rivlin has her fingers on the future. That is because they grasp the federal budget, which is the nation's road map and hope chest, the one document that brings together the Government's plans and priorities. And what she sees makes her fairly optimistic.

For one thing, the growth of regulation is waning. "We have had this orgy of regulation over the past few years," she says. "We have regulated the hell out of everything--the environment, health and safety. We have gone to absurd lengths." The Government's inflation-terrified economists are passionately battling the regulators, who Rivlin feels are a bit hysterical in defending their turf. "But," she notes, "nobody says that we want to deregulate everything. Gradually, the regulatory excesses are being sorted out."

Also, Congress is gaming much better control over rabbit-hole spending by moving toward longer planning. Says Rivlin: "The most important thing that happened with the fiscal 1980 budget is that Congress for the first time went beyond a single year's spending and voted at least tentative budget targets for three years. Now we have been pushing for five-year goals." These goals will help legislators make cuts in spending on an orderly basis with plenty of advance notice. As she says, "You really wouldn't want to live in a country where many programs are changed quickly."

Rivlin argues that spending cannot be substantially brought down until Congress is willing to tackle the legislated pensions, subsidies and other transfer payments to retired civil servants, veterans, farmers and other politically vindictive constituencies. To call these payments "uncontrollables" is, she contends, a copout. Congress enacted them, and Congress can change them.

Unless a health insurance plan is enacted, she feels, the fast rises in Government outlays are basically finished. "We have built almost all of the interstate highway system, and we don't need another one. Because the baby boom is finished, the pressure to increase spending on schools is mostly over. The jumps in Social Security taxes are likely to be much smaller. We are basically home free until the year 2010, when the baby-boom kids will become the elderly."

Soon the U.S. will start enjoying some benefits from the slump in the birth rate, which started 15 years ago. Says Rivlin: "In the 1980s we are going to have fewer people coming into the labor force, and so finding jobs for them will not be so difficult. The crime rate will drop. Most crimes are committed by people aged 15 to 25, and there just aren't going to be as many of them as before."

To remedy inflation, Rivlin has her own prescription: "Do everything that you can think of because there is no simple answer. At a hearing on the Hospital Cost Containment Act, one Congressman told me, 'This will cut the Consumer Price Index by only .4%, and that's not very much.' Well, it is not very much, but it is worth doing, if you are doing a lot of other things too. Hospital cost containment will help, some deregulation will help, strategies to increase supplies will help." None of these measures will be easy to accomplish. But, Rivlin points out, "nobody ever said that democracy was easy. They only said that it was better than any other form of Government."

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