Contemplating Cuts

Even under the optimistic economic assumptions, to detail domestic spending cuts that would balance the budget yet pass the Congress was a daunting task. From his previous work with Phil Gramm on a FY81 budget alternative, the Dunkirk memo, the transition (Weinberger/Taft) team work, Senate Budget Committee lists, and so on, the new budget director had collected a large bag of cuts before he walked in the door of OMB. Some were big and obviously politically difficult (the "A" list); others were small and more technical (the "B" list). Once inside that door, Stockman suddenly had a large, highly professional organization to price out all his suggested changes, draft justifications, suggest further cuts (many from hoary OMB lists passed from director to director), and warn him of hidden difficulties (why cuts had continually been passed on). The OMB staff generated additional big and small proposals (the "C" and "D" lists). Among all his new resources, one, however, was scarce: time—Stockman's and particularly the president's and that of his colleagues.

Stockman needed his colleagues' time to make OMB's position the administration's policy. Stockman, for example, wanted to slash nonmilitary foreign aid. New Secretary of State General Alexander Haig thought that budgetary restraint did not justify OMB's changing foreign policy over his head, so he resisted with all the power that a personally forceful bureaucratic veteran could muster.^[20] Few other cabinet members had either the facts or the savvy to protest as effectively, but all at least had to sign off on cuts before they were sent to the Hill.

After trying to consider cuts in cabinet meetings, which wasted the time of anyone not immediately on the chopping block, Stockman resorted to a tried-and-true measure of budget cutters worldwide, a separate review board stacked with high officials whose bent was toward cutting. To review contested OMB proposals, his Budget Working Group included Bill Brock, Don Regan, his deputy Tim McNamar, Martin Anderson, and Murray Weidenbaum. Jim Baker and Ed Meese were members but rarely had time to attend. Anderson excelled at doing Stockman's work for him, overawing cabinet secretaries and their bureaucrats

with his expertise. Because it was so early in the administration, not many department heads knew much; because few new lower-level appointments had yet been made, department heads were forced to rely on the word of suspect (by definition) career bureaucrats against a group of their administration colleagues. Not a good position for the cabinet members.

Stockman thereby won acquiescience, if not support, to cuts that were then presented to the president for final approval as the product of a group of his cabinet officers. Stockman believes the process made cuts seem more consensual than they were.

If the President learned any lessons from [the process] … they were undoubtedly the wrong ones. When he later found himself being challenged by congressmen and senators, I would hear him say again and again, "The fellas in the cabinet round-tabled all this and are in one hundred percent agreement that these cuts should be made."

In fact, they hadn't and they weren't. We had brow-beaten the cabinet, one by one, into accepting the cuts. It was divide-and-conquer, not roundtabling. In my haste to expedite the revolution, I had inadvertently convinced the chief executive that budget cutting was an antiseptic process, a matter of compiling innocuous-sounding "half-pagers" and putting them in a neatly tabbed black book.^[21]

It is fairer to say that Reagan, who on his own upped the estimate of "waste, fraud, and abuse" to 10 percent of all spending, was not educated to the contrary by the process.

There was no point in bashing cabinet officers over the head to back something that congressional Republicans were going to nix. Opposition had to be gauged and then overcome. And so as "black books" of proposals flew around the executive branch, a similar blizzard of paper was carried to the Hill. An OMB source explained that "to get the most politically saleable, $40 billion lowest common denominator, you need to start with $70–$80 billion … [but] it's not a smooth glide path from 70 to 40; more like 70 to 30 and then back up to 40." Many cuts failed to pass political muster. Because Stockman had to win support one by one for individual cuts, which were controversial enough, there was no way to assess the totals.