The First (and Last) Resolution or, Wanted: a Budget, Dead or Alive
"The way to reconcile the irreconcilable is to choose the flat-out impossible."[39] Using the results of the questionnaire distributed to all House Democrats, along with the March 15, 1983, committee reports and input from Democratic caucus meetings, House Budget Committee Democrats held a series of closed meetings and drew up a distinctly Democratic plan. They added to the president's budget for FY84 $32 billion in domestic outlays, cut defense outlays by $9 billion, and raised revenues by $30 billion. They cut defense budget authority by even more, $16 billion, allowing a 4 percent real increase rather than either the 10 percent requested by the White House or the 7.5 percent suggested by House Armed Services.
Democrats unveiled their plan on March 17, as the full House Budget Committee met to work on a budget, ramming it through the panel in one day on straight party-line votes and defeating all attempts at amendments. The committee requested a rule that would allow only one comprehensive amendment. Rules agreed, stating that only the Republican leadership would be allowed to offer a substitute. The Republicans wanted to offer a series of amendments, perhaps as many as fifteen, but could not agree on one.
The parties had reversed positions since 1981; at a disadvantage on overall priorities, the GOP now wanted to fight on the specifics. The Democratic plan passed 229 to 196 on March 23. Twenty-six new Democrats made the difference.[40]
The biggest problem for Republicans was the defense number.[41] At the beginning of March, as stories exposing waste in the Pentagon began to hit the front pages, Time ran a cover story about a previously obscure Defense Department analyst named Franklin C. Spinney. Chuck Spinney, who worked in the DOD's Office of Program Analysis and Evaluation, was not really saying that the Pentagon needed less money. In fact, one could have concluded from his analysis that the Pentagon actually required more. But his evaluation was such a damning indictment of Pentagon procedures that the natural reaction was to cut the military because they could not be trusted with the money. Clumsy Pentagon efforts to suppress or refute Spinney's analysis only added to the sense of scandal.[42]
From the Pentagon came a series of horror stories. Let the Post tell the story:
Just behind the cockpit in the world's most sophisticated radar plane, on the leg of a folding blue-and-gray stool, sits the world's most expensive plastic cap.
What distinguishes this particular cap from any other lump of white nylon is that the Air Force paid its government supplier $1,118.26 for it, which is roughly the cost of the plastic, plus $1,118.[43]
We will spare the reader further details; suffice it to say that neither Boeing Aircraft nor the military procurement system came out looking very good.
Now, ordinary people can't really argue with the military about the costs of high-tech weapons. But anybody knows that $1,118.26 for a plastic cap is excessive; and most people assume that officials who first suppress criticism and then answer it with false reports probably have something to hide.[44] Even as President Reagan used anecdotes about people buying vodka with food stamps to judge that food stamps could be cut, stories about defense waste convinced the public that, even if a buildup were needed, the Pentagon should finance some of it by getting its own house in order.
In spite of the rash of bad publicity, Reagan campaigned heavily for his buildup. On March 15 he asked Domenici to delay SBC's action on the first resolution while he tried to rally support. The president's rather lonesome campaign climaxed on the night of March 23 (after the House passed its First Resolution) when he made a television address to the nation. Reagan made the usual comparisons of U.S. and Soviet strength and the standard argument about the West's disarmament in the 1930s. But in concluding his speech, the president "launched the debate over U.S. military spending into an entirely different orbit."[45] He proposed a massive new program—the Strategic Defense Initiative (SDI)—in order to create a space-based system of defense against ballistic missiles.
Whatever SDI's merits, they did not include helping win support for the president's defense budget. "I would have preferred that speech during the Easter recess if it was not going to focus on the budget," Robert Michel groused, meaning that SDI had just diverted attention from House Democrats' domestic spending and tax hike plans. For the moment, SDI merely injected an extra level of controversy into the defense spending brouhaha.
On April 5 Reagan met with Senate Budget Republicans. Domenici had put together a tentative plan, including 5 percent real growth for defense. Seeking to avoid a collision, Majority Leader Howard Baker
proposed 7.5 percent, with slightly less in the out-years. This was really no different from what had been agreed in 1982, but Weinberger had backed out. Baker warned Reagan that his plan was the best the administration could hope for. Domenici was not exactly enthusiastic anyway. Reagan decided to go along if Weinberger agreed, but then no one could find Weinberger.
By the time Ronald Reagan put in a call to … Domenici, the votes were lined up, the numbers had been written on a big green chalkboard and the clerk was ready to call the roll. But Domenici, his teeth clenched with anger, nevertheless excused himself, stubbing out yet another Merit cigarette as he made his way to the phone booth marked "Senators Only." Domenici listened politely, his face noticeably reddening as Reagan barked into the phone: "I'm the president and I want you to hold off for a while. People in that committee are up for reelection. They're going to be coming to me for help."
Reagan's threat came too late. After Domenici hung up the phone, he joined all but four Republicans on the budget committee in voting for a defense spending increase that came to only half what the president had wanted.[46]
Stockman reports that Weinberger finally had agreed to compromise, but by the time Reagan called Domenici it was already too late. "Why," Senator Grassley asked, "should we dump huge sums of money into the Defense Department when it is rotting with bad management?"[47] His voters were saying, "Turn off the spigot!" As Robert Michel put it, "That consensus … you once felt out there to recoup on the military isn't there anymore."[48]
With defense seemingly settled, Senate Budget turned to revenues. That was more difficult. Democrats proposed tax increases of $30.2 billion in FY84 and more in the out-years (figures very like those in the House package), but they lost on a tie vote. Then the president's tax plan was rejected, 8 to 14, with six Republicans against it. They knew what they were against, but what were they for?
On April 18, Stockman bluntly warned the president that "almost none of the huge policy savings" that the administration desired "can be achieved without congressional-administration agreement." Instead, "a runaway anti-administration resolution could emerge through de facto Democratic dominance over [a] split GOP in [the] Senate Budget Committee and through further compromise in budget conference."[49] The budget director was fighting privately (and publicly; the memo was immediately leaked) with Weinberger, who suggested that the president abandon the budget process and go it alone with a veto strategy on appropriations. Simultaneous consideration of defense and deficits, said Weinberger, would work against defense. Vetoes, Stockman argued, excluded
any efforts to change entitlement policy.[50] Stockman won approval to negotiate further, but divisions over defense and revenues prevented agreement on April 20, when all twelve Republicans on SBC met with Stockman, Meese, and Jim Baker.
"We must continue to try to get a compromise," Domenici declared, "or the deficits will threaten economic recovery."[51] That refrain could be dropped randomly into any year's debate. But the Republican majority had disappeared. Dole was balking on revenues, and the Gang of Five moderates (Hatfield, Mathias, Weicker, Stafford, and Chafee) were becoming much more independent.
On the Democratic side, Hollings had succeeded to the ranking position on the Commerce Committee; he yielded his ranking spot on Budget to Lawton Chiles. Far more a conciliator and deal maker, Chiles wanted to shape the process, either by offering a Democratic alternative or by dealing with Domenici. A party man, Domenici would do it with Republicans if he could, but he and Chiles were personally close. Around this time, Slade Gorton (R-Wash.) began outlining a package, consulting with both Domenici and Chiles about what might prove acceptable in an emergency. A participant recalls that Domenici "was very sympathetic from the beginning but also thought that he couldn't do it on his own due to his relations with the president, Howard Baker, and the Republican caucus." Domenici would use Gorton as a fallback.
On April 21, a last effort to unite Republicans was stymied by the antitax faction. Domenici then joined Gorton, Mark Andrews, and Nancy Kassebaum in support of Chiles's revenue figures, and SBC passed a resolution that also included the 5 percent defense increase and $11 billion more for domestic spending than the administration had desired. "I couldn't wait any longer," Domenici recalled. "I made a decision there was little chance of getting a solid Republican budget resolution. I think I was right." Domenici would try again on the floor. Dole's response to the Budget Committee's tax figure was "speechless; stronger letter to follow."[52]
On the floor, the Senate rejected, by big margins, four more extreme plans: Hollings's freeze; a conservative Democratic package with large new taxes; a Grassley domestic plus defense freeze; and a more-Reagan-than-Reagan budget, sponsored by Orrin Hatch, taking big chops at social spending. That left three alternatives: the SBC plan; a Domenici-Baker substitute, lukewarmly endorsed by Reagan; and one devised by the Gang-of-Five moderate Republicans. On May 12 the Gang of Five joined Democrats to table the leadership budget, 52 to 48. Then they accepted an amendment by Gorton, whose plan allowed slightly higher defense spending and restructured the tax hikes. Gorton's figures were numbers both Dole and Rostenkowski would accept for FY84–85 and
numbers the president's contingency proposed for FY86, but they had the support of neither camp and lost 46 to 53. Then the full Senate rejected the SBC plan because its tax provisions were too high—back to the drawing board.
After this unsuccessful round, Howard Baker wrote an opinion piece in the Post, with a promising title, "We Will Pass a Budget Resolution":
Equating a simple budget resolution with democracy itself may seem a bit dramatic, but the congressional budget process lies at the heart of modern and coherent democracy. What we spend determines how we govern, and nowhere is that fact in sharper focus than when all the problems of government descend on one set of people in one room at one time during budget resolution season.
Baker was joined by CEA Chairman Feldstein and leaders of the National Governors Association in the chorus of calls for responsibility.[53] As usual, exhortation was no substitute for consensus. If only the president would accept more taxes…. Instead he had rejected Domenici and Baker's warnings that a compromise on taxes was needed, leaving Domenici, according to one aide, "as angry as I've ever seen him." Then in a radio speech Reagan declared that "governments don't reduce deficits by raising taxes on the people." This was news to state governors, most of whom had been forced to do exactly that, as well as cut spending, to meet their states' balanced budget requirements. Yet neither Howard Baker nor the governors nor much of anybody except liberal Democrats supported specific tax increases. In a letter on April 28, 146 House Republicans—enough to sustain a veto—pledged that they would oppose any change in the July tax cut or indexing.[54] The president was the key not because he was stopping Congress from doing what it wanted to do but because Republicans and moderate Democrats wanted him to take the flak for the increases. Reagan chose not to lead Congress against himself.
Senate Budget tried again on May 18. Domenici supported a modified Gorton-Chiles plan, but it lost 8 to 12. SBC rejected its previous plan by the same margin. Then, reversing its alignment a week before, it passed a new Domenici-Baker plan, 11 to 9. That resolution hit the Senate floor on May 19. By then the Democratic leadership had finally decided to back the Gorton-Chiles plan. Senator Byrd, an aide recalled, "was strongly against passing a Democratic budget" but was convinced by the argument that "Christ, it's only a budget, it doesn't mean anything." A victory would be good for the troop's morale.
The Budget Committee plan went down as all the Democrats and ten Republicans joined to defeat it, 56 to 43. Gorton-Chiles lost, 52 to 48, when thirteen mostly southern Democrats voted against it. As usual with
Senate Democrats, leadership was weak. A revised Domenici plan lost 57 to 43. By then it was near midnight, and Howard Baker in essence conceded. He asked the Senate to reconsider Gorton-Chiles and urged his colleagues to pass something .[55] His motion to reconsider carried 55 to 45, as a number of GOP leaders, including Baker, supported the move. Gorton-Chiles then was adopted as an amendment to the SBC plan, 53 to 47, as five Republicans who originally opposed it switched votes.
When the Senate voted on final passage of a budget resolution, now amended as the Gorton-Chiles plan, it got the same twenty Republican votes as before, but four Democrats—Patrick Leahy (Vt.), David Pryor (Ark.), Wendell Ford (Ky.), and minority whip Alan Cranston (Calif.)—now voted against final passage. Because Senator Goldwater had gone home, that left the margin at 50 nay to 49 aye. Democrats had put Domenici on the spot; at the last moment he switched, and the Gorton-Chiles plan passed 50 to 49. Republicans opposed it 32 to 21; Democrats supported it 29 to 17.[56]
The numbers suggest a fairly bipartisan resolution; but the way they occurred shows that there was no real agreement. The Democratic leadership was in no way committed to the substance. A resolution had passed the Senate, but its provisions, particularly for revenue, could not be enacted by that body. There really was no majority for anything. A senior Senate aide recalls worrying that a resolution that could not be enforced would kill the budget process. But so would passing no resolution at all. Domenici had no good choices.
Among a chorus of pessimistic comments, James Jones said that "this could be the shortest Congress to deal with substance." Bob Dole judged that "the odds are even that all bets are off until January of 1985." And a top Senate Republican aide commented that "this Congress is over. Everyone's waiting for 1984."[57] Rather than concede defeat, budget leaders conferred in search of the best possible impossible resolution. On June 20 they settled on a tax increase target close to the Senate number; they split the difference on defense (a 5 percent increase) and accommodated the domestic spending differences by roughly accepting the Senate numbers, while providing a "contingency fund" of $8.5 billion in new spending that would be allowed if authorizing legislation passed. Because authorizing legislation would be vetoed, this was a victory for the Senate. But new authorizations would be vetoed no matter what the budget resolution said, so it wasn't much of a loss for the House. King Solomon could have taken lessons from our legislators on "splitting the difference." More optimistic (and, this time, more realistic) economic assumptions reduced the projected deficits. Reconciliation instructions required $12.3 billion in savings from 1984 to 1985, mostly in civil service pensions, dairy price supports, and medicare.
By most standards, the Senate had "won." Yet because its position had not really been that of Senate Republicans, other Republicans were not satisfied. House Republicans did not even show up for the final meeting of the conference. Senator Domenici called the deal a "miracle"; Representative Latta called it treachery; and Ronald Reagan dressed down the Senate chairman in a meeting with Republican congressional leaders.[58]
All along, the Gorton-Chiles leaders had hoped Dole didn't mean it when he denounced the tax increase plans. "Our assumption about reconciliation," one aide recalls, "was always that it enables authorizing chairmen to say, 'they made me do it.'" "Finance loves getting reconciliation instructions from the budget," one senator recalls. "They don't want to be told how to do it, but love getting a target." They were wrong; Dole attempted to amend the conference report to reduce the revenue figure. "We were speechless," an aide recalls, for that isn't done. "We should have realized," he added, "that if a legislative player like Dole, with all those years of experience, proposes to amend a conference report, he must be serious and you had better listen." Dole was supported by Russell Long, who argued that "to try to pass a tax increase of these kind of numbers without the support of the president of the United States is just ridiculously."[59] Dole's amendment lost 41 to 51. With Howard Baker and seventeen other Republicans supporting Domenici, the conference report passed 51 to 43. Its passage, however, reflected only the senators' desire to finish the battle.
The president, referring to his own budget, not Congress's, promised to "veto their budget-busting bills again and again and again." Dole kept calling the budget a "dead cat" and other unpleasant things. A "budget" had passed, but no agreement had been forged. Being speechless meant being budgetless.