WASHINGTON INSIGHT

TOP PENCIL: Republican congressional leaders have selected June O’Neill, a conservative labor economist at Baruch College in New York, as director of the Congressional Budget Office, sources say. She will succeed Robert D. Reischauer, who angered Republicans by dismissing their supply-side economic theories. O’Neill’s selection could be announced by the end of the week, ending a search in which several high-profile conservative economists spurned the job. The choice also suggests Republicans are abandoning efforts to transform the CBO into a bastion for “dynamic scoring,” a controversial budget technique that would show that GOP tax cuts pay for themselves--and thus don’t increase the federal budget deficit. O’Neill knows little about the method, sources say.

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SEEING GREEN: Hollywood director Rob Reiner is using Washington as a backdrop for his upcoming “An American President,” but to a group of wealthy conservatives, the setting might as well be for “Alien 4.” Reiner’s crew thought the headquarters of the libertarian-leaning Cato Institute would be an ideal setting to portray an environmental advocacy group’s offices in the movie, which stars Michael Douglas and Annette Bening. With the institute’s blessing, the filmmakers posted a sign identifying the institute as the fictional “Global Defense Council.” Unfortunately, the sign went up shortly before some of the benefactors whose contributions had helped build that very structure were walking in for a policy forum. As Jerry Taylor, Cato’s director of natural-resource studies, recalled: “People said: ‘What happened? The Cato Institute’s has been taken over by the enviros. I paid for that building.’ ”

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BIGGER PAYLOAD: The B-2 Stealth bomber is designed to elude radar. But the Pentagon, which doesn’t particularly want the 20 additional bombers Congress is considering buying, may have found a way to ensure the aircraft won’t escape detection in the federal budget. The Pentagon has taken the unusual step of calculating a “life-cycle cost” for the B-2 that reflects the total costs of the aircraft over 20 years, including research, production and operations. The figure is $30.8 billion, or nearly three times the $11.7-billion sales price cited by the manufacturer, Northrop Grumman Corp.

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RIGHT MAKES MIGHT: In American politics, Republicans and Democrats struggle to find middle ground, where it’s presumed most voters are located. But a top GOP pollster says the Republicans swept to victory in November precisely because they abandoned the center. Exit polls found that only 42% of voters describing themselves as “moderates” went for GOP candidates in 1994--about the average in elections from 1980 to 1992, said Fred Steeper, chief pollster for the 1992 George Bush campaign. By contrast, 80% of self-identified “conservatives” backed the GOP--the highest figure ever and 13 percentage points higher than the average. Given that, Steeper warns it would be a “huge mistake” for Republicans to moderate their message for 1996.

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BAD RAP: Public anger with Washington lawmakers isn’t going unchallenged in Congress these days. When eight-term Rep. Bill McCollum (R-Fla.) argued last week that term limits are needed because Congress changes people who serve there, he drew a sharp rejoinder from 11-term Rep. Henry J. Hyde (R-Ill.). “What I dislike about this whole thing is your view that somehow to be a politician is to be corrupt,” Hyde said. “That’s the unstated premise behind all this.”