Politicians under Pressure

James Jones's term as chairman of House Budget expired. Party leaders were happy to see Jones go, but their preferred successor, Leon Panetta, was ineligible. William Gray (D-Pa.) filled the vacuum. A black preacher from Philadelphia, Gray's political style was the antithesis of that other, better-known preacher, Jesse Jackson. The 1984 Almanac of American Politics noted that Gray, elected in 1978 and by 1983 a member of both Budget and Appropriations, "seems quietly to be building up influence." Gray got along far better than had Jones with both party leaders and ideological opponents. Combining support from liberals and members of the Appropriations Committee, Gray easily won the post by convincing some conservatives that only a liberal could win liberal votes for spending cuts. Yet, like Jones, Gray had to satisfy House Democrats with little interest in domestic spending cuts.

The two Republican sides of the triangle also had leadership changes. Reagan remained, as did Stockman (temporarily). But Feldstein had gone back to Harvard, not to be replaced for quite a while; his open opposition to administration policy led to some thoughts of abolishing the CEA. Ed Meese was confirmed as attorney general. Mike Deaver went into a private consulting business. The third member of the troika, James Baker, tiring of staff work, had toyed with the idea of becoming

commissioner of major league baseball, but he discovered that Don Regan was also tired of his Treasury job. Baker wanted more independence, and Regan wanted to be closer to the president; they switched jobs. Baker brought Darman with him to Treasury as deputy secretary. It was a blockbuster deal.

Howard Baker, meanwhile, had retired from the Senate; after a five-way contest, Bob Dole won the race to succeed Baker as majority leader. Dole's election was generally viewed as a sign that Senate Republicans wanted a strong hand who could, if necessary, lead them against the White House. Dole's successor at Finance, Robert Packwood, was known for his belief in using tax preferences for public purposes.

The net of these changes replaced the previous main link between Senate and White House, a Baker/Baker chain, with Regan/Dole. Regan had far less understanding (and tolerance) of the needs of politicians than had Jim Baker. Dole was far more likely than Howard Baker to push his own agenda.

Although no one could expect much progress in the budget disputes, there was much fanfare about tax reform. The vague talk about reform during the campaign became real when the Treasury, in its promised postelection report, suggested substantial rate reductions, "simplification" (three rates instead of fourteen), and elimination of many tax preferences. Treasury had proposed, with a few modifications, a tax policy technician's bill that zapped all sorts of constituencies, especially business. The scope of "Treasury 1" (as it was called), its surprising content, Regan and Reagan's continued support for reform in general, and support from some Democrats assured that tax reform would stay on the agenda. Yet few would have bet on its passage; the idea ran against the system's grain. There was no mobilized constituency for reform; if anything, the public, which hardly trusts politicians, expected it to turn out badly. Any losers, that is, current beneficiaries of preferences, would mobilize heavily to protect themselves. Like deficit reduction, tax reform seemed foreclosed by a balance of political power that preserved the status quo; the sensible prediction was Yogi Berra's phrase: "Déjà vu all over again."

The same ingredients, reheated again, were likely to yield the same flavor of budgetary, or political, stew. The budget process was beginning to resemble not an ordinary pot but a pressure cooker. As the heat steadily built, so did the pressure; without a safety valve, the pressure eventually would blow the top off. Politicians had been fighting so vehemently for so long that the conflict was about to burst its bounds. Who or what would get splattered in the process remained unknown. The explosion was coming because our politicians were not inanimate objects; they had wills of their own. And they hated life in the budgeting pressure cooker.

They were desperate first about the perceived perfidy of their opponents. Each blamed the others for the heat. Reagan saw a pork-barreling Congress that refused to do its duty by cutting wasteful programs. Worse, it manipulated the budget process, making promises in budget resolutions that it refused to keep and using continuing resolutions to impose policies (e.g., forbidding military aid to Nicaraguan Contras by holding national defense hostage).

House leaders saw a president and a Republican party who, after years of bashing Democrats about deficits, had not only doubled the national debt but had the gall to keep blaming Democrats. Senate leaders saw a president and House leaders that continually put partisan and constituency interests ahead of the greater good—responsible fiscal management. The administration kept rigging the numbers, and the House kept playing games on cuts. Neither stuck to the deal in budget resolutions. Grudges festered. The factions grew more interested in coercing than in negotiating with each other. But frustration with their rivals was only part of the story.

The deficits were widely believed to epitomize a failure to govern. Politicians of left, right, and center could agree on that even as they pointed fingers at each other. The foreseeable future held nothing but unending failure, deficits without compensation. Neither was Reagan to get much more defense, nor were Democrats to get more domestic programs. Politicians want to do positive things, but the deficit had turned politics into a totally negative process.

So, in 1985 and then in 1986, two things happened that never could have if the ordinary logic of politics had applied. Tax reform and something called Gramm-Rudman-Hollings (GRH) passed. Both GRH and tax reform were examples of political macho. Each was an attempt to supersede "special interest" politics—the normal clash of contending forces over identifiable benefits—with their version of the "general interest." Each was endorsed by politicians who feared criticism for not going along, yet neither had a positive political constituency dedicated to their terms.

With GRH politicians tried to slash the Gordian knot of budgeting. With tax reform they tried to do good in an era when good could not be done the normal way—spending. Yet the similar origins of GRH and tax reform should not hide their differences.

The 1986 tax reform bill at least did something: when it became law, Congress and the president could say, "We chose. We governed." Tax reform was a surprising policy choice, maybe wise, maybe not; GRH was an impossible promise that only made things worse.

The essence of GRH was budgetary terrorism. House Majority Whip Tom Foley explained that it was "about the kidnapping of the only child

of the President's official family that he loves" (meaning the defense budget) "and holding it in a dark basement and sending the President its ear." The other players felt the same way; they just had different ideas of who were the hostages. Democrats could slice defense's ear only by doing the same to their own "children." Supposedly this hostage game would force participants to reduce deficits in the normal legislative process, so the doomsday machine would not go off. If some other set of cuts had been more politically acceptable, they would have been made, thus negating the need for GRH. The process made no sense. In the end, Gramm-Rudman-Hollings not only did not force a solution, but it actually paralyzed the system.