Erskine Bowles: a Democrat willing to swing the budget ax

Erskine Bowles, co-chairman of President Obama’s deficit commission, is often referred to as a former White House chief of staff. That’s true, but he has a more current title that may be more pertinent to his commission role – president of the University of North Carolina system.

Mr. Bowles has led the sprawling institution, which has 17 schools and enrolls more than 200,000 students, since 2006. The past three years have been especially challenging for the system, which receives a significant amount of funding from the state, because North Carolina has struggled with one of the greatest financial crises in its history.

Bowles has had to figure out how to cut more than $550 million from the system budget while adhering to his own tuition guidelines, which are meant to prevent too much of the growing cost burden from being put on the backs of students. It’s not unlike figuring out how to bring the federal deficit under control without cutting too much or hiking taxes too high.

The budget cuts that Bowles presided over in the UNC system led to the elimination of more than 1,000 jobs, halts on many system projects, and cuts to many centers and institutes considered unessential in a time of lean finances.

Such cuts aren’t easy, but they’ve gone over reasonably well: Ask state legislators on both sides of the aisle, his board, the campus chancellors, and even the state’s leading conservative education organization, and his efforts to reshape the UNC system’s budget earn almost unequivocal praise.

“One of the strengths of Erskine Bowles is that he looks very carefully at the facts and the numbers and acts accordingly,” says Jane Shaw, president of the conservative John William Pope Center for Higher Education Policy in Raleigh, N.C. “I think it's a better run, more efficient, probably more open system than it was four and a half years ago.”

Bowles brings plenty of experience to the table. In addition to serving as White House chief of staff during the Clinton administration, he has also worked for Morgan Stanley, founded and worked for his own financial investment company in North Carolina, and ran the Small Business Administration. Also, as chief of staff, he helped negotiate the first balanced federal budget in decades.

He will retire from the presidency of the UNC system at the end of this month.

As a businessman, it was natural for Bowles to push for cost trimming and greater efficiency in the UNC system, even before orders came down from the North Carolina legislature. Soon after assuming the system’s presidency in 2006, he organized a committee to examine whether money was being used as efficiently as possible and where fat could be trimmed – a somewhat unusual approach in the academic world, according to some of his board members.

“From the very beginning, he began cutting administrative expenses because he thought it was the right thing to do,” Ms. Shaw says.

Hannah Gage, chairman of the university system’s Board of Governors, took her post after a period of rapid enrollment growth and extensive construction projects to house the influx of students. The UNC system was barely covering the resulting costs. But Bowles’s preemptive actions, she says, are what saved the UNC system from some of the outcomes that other universities have encountered.

“That was a huge advantage for us,” she says. “We had begun to change the way we did everything before the economic downturn. It didn’t mean the cuts weren’t painful, because they were, but we were nimble enough to adapt pretty quickly.”

As the recession began to take a toll, the UNC system watched its funding get slashed repeatedly, and Bowles had to make difficult decisions.

Yet as early as 2006, he made an effort to prevent extra costs from being passed along to students: He instituted a policy to keep tuition increases below 6.5 percent. At UNC-Chapel Hill, one of the most expensive schools in the system, tuition increases have not exceeded $250 annually under that plan. That policy held until its expiration this year – when his board put in place an alternative that allows increases of more than 6.5 percent during times of need.

Tough times may very well be ahead. The UNC system was recently told to prepare for additional budget cuts of at least 5 percent ($135 million) and probably as much as 10 percent, or $270 million.

Bowles’s approach is one that could be handily adapted to the federal level, Ms. Gage says. She says that Bowles used to tell her that “a crisis is a terrible thing to waste” because it provides the “political platform” to make changes that need to be made anyway.

Indeed, Bowles is one who isn’t afraid to take on a crisis. Legislators and education officials often describe him as a “crisis manager.”

In such a role, Bowles has developed a reputation for a bipartisan approach. In North Carolina, he has a good relationship with state GOP legislators because of his business background and his ability to move past political rifts, says Ferrel Guillory, director of the Program on Public Life at UNC-Chapel Hill and an expert on the state’s political climate.

He has also been able to forge a friendly relationship with Richard Burr (R), the senior senator from North Carolina, despite Mr. Burr’s bruising campaign against Bowles in 2004 for that Senate seat.

“Erskine Bowles has worked at being this person who can reach across lines,” Mr. Guillory says.

According to Gage, Bowles established a good rapport with the legislature early on because he kept his funding requests modest and because of a natural inclination toward bipartisanship. “Erskine thinks solutions are bipartisan. He works that way,” she says.

Of course, not everyone is a big fan of Bowles. His co-chair on the deficit commission, former Sen. Alan Simpson (R), described at a Monitor breakfast last month the intense criticism that both men have encountered in their work on the deficit commission. “I’ve been called a Republican toady covering Obama’s fanny,” Mr. Simpson said at the breakfast. “Erksine over there has been called evil by [Democrats]. We have irritated hopefully everyone in the United States and especially every group.”

Yet after years of working with Bowles, many of the North Carolina legislators who were not initially convinced of his bipartisanship have come around, says state Sen. Richard Stevens, the Republican chairman of the education and higher education committee.

“Many of them have become fans of his. That takes extraordinary talent, to be able to do that,” he told The Daily Tar Heel, the independent newspaper at UNC-Chapel Hill, in April.