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Numbers and Priorities

The Democratic package included many of Stockman's major cuts but revised some others. On the average, Jones cut social programs by only 10 to 12 percent, instead of the administration's 25 percent plan. EDA and Legal Services were saved. Food stamps would decline by $950 million instead of $1.6 billion. Child nutrition programs would lose $1 billion


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instead of $2 billion. Medicaid payments would not be "capped" (i.e., limiting federal spending that meant kicking the problem back to the states); they were estimated at $1.15 billion higher than in the Reagan plan.

Jones had tried to win administration support for his package. He had negotiated with Stockman throughout February and March, and, just before announcing their package, Jones and Leon Panetta met with the budget director one more time. Jones thought he was giving Stockman about 85 percent of what he had asked for. But Stockman objected particularly to their efforts to protect low-income programs like medicaid; he saw reducing those welfare-state programs as a matter of principle. Democrats felt the same about maintaining them, and Jones knew even his party's budget balancers could not accept Stockman's cuts.

Jones produced lower deficits with smaller social cuts by shaving the defense buildup and allowing a smaller tax cut. Some of his other moves were more questionable. He "saved" $1.5 billion by assuming that the government would borrow funds to fill the Strategic Petroleum Reserve (off-budget)—not absurd because the oil would be an asset but not really a spending reduction either. Across-the-board administrative savings would yield $4.8 billion, a device by which Jones essentially spread out costs that Stockman had targeted on specific programs, without explaining what was really supposed to change. Another $1.3 billion would be recovered from oil companies, supposedly in actions against them for various price infractions. Again this was not absurd, but, given delays in the court system, it was doubtful.[41] After a few revisions in committee, the reduced FY82 tax cut and other new savings left Jones with a deficit of $25.6 billion, compared to the administration's $45 billion.

Many observers agreed with Jones that the HBC resolution gave Reagan most of what he wanted; it was adopted by a 17 to 13 vote on April 16, as boll weevil Gramm voted with the Republicans. "A bemused Republican staffer in the House probably put it best: 'We are being dragged kicking and screaming to victory.'"[42] The administration disagreed. Stockman objected not only to where Jones made cuts and their amount but to how. Democrats were allowing only $18 billion in savings through the reconciliation process; the rest would be done in appropriations. The Senate had assumed $36.9 billion in reconciliation savings. Undoing cuts from reconciliation would require new authorizations, which the president could fairly easily veto. By contrast, reductions through appropriations would occur through thirteen separate bills over a period of many months, and those appropriations could change the following year when support for cuts might diminish.[43]

Although many Democrats, especially authorizing chairmen, still disliked


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reconciliation, Jones, backed by his committee, had the Speaker's support for using the process again.[44] Jones was not willing to reconcile authorizations (i.e., reduce them to fit within a resolution) when savings in appropriations were technically plausible; reconciliation, in his view, was to be used for entitlements.[45] The Republican insistence on reconciling discretionary program authorizations, therefore, also raised an issue of congressional procedure that left much bad feeling in 1981, recurring in later years.

HBC reported out its budget shortly before Congress adjourned for Easter recess. Jones wanted to push his budget to the House floor immediately, exploiting its lower deficit to appeal to the boll weevil Democrats. The weevils would have been less influenced by the pro-Reagan campaigns whipped up in their districts over the recess. The still shaky Democratic leadership, however, had too little confidence in either Jones or their own control of the House to push events forward. The Republicans, therefore, had the rest of April to lobby while revising their own package.

As Stockman and Gramm worked on the House boll weevils, the administration suddenly ran into trouble in the Senate. On April 9, Republicans William Armstrong of Colorado, Charles Grassley of Iowa, and Steven Symms of Idaho defected from their party and joined the Democrats in voting down Domenici's proposed budget resolution. Apparently, Senator Hollings had been right back in 1980; arrived on the shores of leadership, "pilgrim Armstrong" was not so happy with the way his party was carving the turkey.

Domenici refused to put Stockman's magic asterisk of unspecified savings in his draft resolution and also adopted more realistic interest rate assumptions than the administration had employed. These blows for a more honest budget caused the Reagan plan's FY84 balance to disappear, replaced in Domenici's estimate by deficits of $40 to $50 billion per year from FY82 to FY84.[46] All three conservatives had campaigned for office pledging to balance the budget, and Domenici was saying it wasn't true. Armstrong could not accept that—"I'm so committed to a balanced budget," he declared, "that I am prepared to vote against the defense budget, which I've never done before, and against water projects, something no Senator from Colorado has done in 80 years." Domenici called the vote "ridiculous," "more pathetic than serious."[47]

Although it looked like the disagreement was between the three defectors and their chairman, the real conflict was between Domenici, representing the doubts of Senate Republicans, and the administration. Domenici was focusing attention on the fact that the administration's program did not add up. He rejected "unspecified" savings on the


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ground that, without knowing where savings would come from, the committee could not project totals for each budget function (e.g., national defense) in FY83 and FY84.

Domenici, however, was in an impossible position. He wanted to use other Republican senators to force the administration to see the light. But if the administration persisted in making its entire plan a test of party loyalty, then the contest became Pete Domenici, a rogue (if correct) Budget chairman, against his president for the support of other senators. Presidents have more weapons in such a fight than do budget chairmen. Domenici's vote alone, of course, might beat the president's plan in the narrowly split (12 to 10) Budget Committee. Yet that would make Domenici the Republican who busted Ronald Reagan's presidency before it had gotten going, and Domenici could not do that. He really needed the administration to flinch, but neither Reagan nor Stockman would. Instead Stockman urged the Wall Street Journal, in a scathing editorial, to place all the blame on the Budget chairman,[48] and the administration's heavy guns began targeting Domenici and the defectors.

Howard Baker had already decided weeks before, in a meeting of Senate and White House leaders, that the only reasonable solution to the "future savings" conflict was to punt—and hope the ball never came down.[49]

When the administration refused to blink, Domenici was forced to retreat, devising a set of changes that looked like progress compared to the package that had been voted down (so Armstrong and company could save face) while not really changing anything. He reestimated the outlays created by the assumed budget authority; projected a one percent saving from the ever-popular waste, fraud, and abuse; and with a few other maneuvers, ended up with a smaller magic asterisk of about $15.3 billion in FY83 and $27.7 billion in FY84. Whether because they were satisfied by this rather questionable adjustment or because they had nowhere else to go, Armstrong, Grassley, and Symms returned to the fold on April 18, joined by Democrats Chiles, Johnston, and Sasser.[50]

Domenici did win one victory, though of dubious meaning. Hollings's proposal to include a COLA freeze in reconciliation had been defeated by the committee Republicans after their fateful meeting with the president, but now he moved that the budget resolution assume that COLAs, including social security, would be delayed from July to October and set at the lesser of the increase in wages or prices. Domenici and six Republicans joined Hollings, and the proposal passed 9 to 8. Because the reconciliation had already been passed, the COLA change had little chance of being implemented unless the House adopted it; this may explain the lack of outcry from lobbies for the elderly.

After these glitches, the administration's package emerged safely from


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Senate Budget. Lockstep Republican votes for reconciliation left little doubt that the resolution would pass the Senate. The situation on the House floor was much more unpredictable.

Stockman and his friend Phil Gramm reduced their deficit by adopting some of Jones's tricks, such as moving the Strategic Petroleum Reserve off-budget, making general "waste" reductions, and collecting penalty money from those overcharging oil companies. They also added back some money for programs favored by southerners. Extra funds for V. A. hospitals, for example, were the price for the support of Veterans Affairs chairman G. V. "Sonny" Montgomery of Mississippi, a boll weevil leader of greater stature and respectability than either Gramm or Conservative Democratic Forum (CDF) organizer Charles Stenholm (D-Tex.).[51] It is easier to defect when one's elders are doing so. The new package, cosponsored by Gramm and GOP Budget Committee leader Delbert Latta (thus "Gramm-Latta") shaved $6.7 billion more from the deficit.

Stockman and Gramm's new adjustment made their package more attractive to the boll weevils but did little to help the gypsy moths. The moths organized, as one of their leaders, S. William Green (R-N.Y.) put it, "to work for our regional interests within the context of our overall desire to restrain the growth in federal spending."[52] The Northeast/ Midwest coalition, a bipartisan caucus whose vice chairman was Carl Pursell (R-Mich.), led in criticizing regional consequences of the economic plan. "We always seem to be selling out Northeast interests and Midwest interests to pick up southern Democratic votes," Bill Green declared. Stockman worked to reassure the gypsy moths as cheaply as possible.[53]

While his members went home to meet the voters during Easter recess, Tip O'Neill went to Australia and New Zealand. A number of Democrats thought that in doing so he made "a very serious mistake of political judgment," as James Oberstar put it. Another midwesterner maintained that "we had the momentum going for our budget when we went into recess. Then Tip goes off on a junket for two weeks. Meanwhile the White House is at work, they put on a real campaign, and we had only a half-baked effort."[54] It was not clear, however, exactly what the House leadership was supposed to do while most members were back home. They had already played their best cards, committee assignments, and they would be of no help with the gypsy moths. The leadership's main tools were appealing to party loyalty and shifting provisions in the package, but neither was possible while everybody was out of town.

When the Democrats returned from their recess, Foley told the Speaker they were fifty to sixty votes short. O'Neill groaned that "only the Lord himself could save this one," and another Democrat declared,


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"We're going to get the crap kicked out of us." To O'Neill, the difficulty was not his trip but rather the other members' trips back home. "The President had overwhelming support," he said, "and that's what the members found out."[55]

The evidence suggests that O'Neill was right. One summary found that the messages in the districts were conflicting, but these were the liberal districts. When a Massachusetts representative has heavy district pressure for a conservative program, that program is likely to be pretty popular overall.[56] The polls in late April revealed strong support for the president's policy. Reagan's popularity had surged after the assassination attempt; now CBS/New York Times showed his spending proposal favored by 35 percent to 14 percent and his tax proposal approved by 37 percent to 11 percent. (More had no opinion, which should give us pause.) Even more than half of the 38 percent of the responders who expected to be hurt personally approved of Reagan's performance as president.[57] An Associated Press/NBC survey found respondents disagreeing (54 percent to 36 percent) with the proposition that the spending cuts were too drastic. In a separate question, 20 percent thought they did not go far enough.[58] In short, a substantial minority of the population disliked Reagan's proposals, which helps explain his relatively high disapproval in polls cited above, but a substantial majority liked the program.

By mobilizing constituents directly (including lobbyists contacting campaign contributors to ask them to pressure waverers) and by appealing to the public in a speech to a joint session of Congress on April 28, the president's strategy kept the pressure on at home. The president also continued a soft-sell approach to both weevils and moths, meeting with small groups and, without giving away anything, trying to put them at ease with his program.

Carroll Hubbard (D-Ky.), a representative since 1975, was one object of this attention. He was invited to a state dinner for the prime minister of Japan, scheduled a day after the budget resolution vote, making it embarrassing to vote against his host. Jimmy Carter had never done that sort of thing. Hubbard was "wooed with phone calls from the President, box seats at the Kennedy Center for the Performing Arts, and a steady parade of White House lobbyists bringing one clear message: The President is too popular in your district for you to vote against him."[59] "I sincerely believe," Hubbard told the Times, "that if the President's program is adopted there will be much unhappiness across the nation in a few months." But even with these beliefs and a district that supported Jimmy Carter in 1980, Hubbard hesitated. His constituents, he reckoned, "have serious doubts about the Democratic Party in 1981. They think the Republicans are more serious about fiscal restraint and balancing


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the federal budget…. I have solid citizens calling me up and saying, 'We've tried everything else, let's try something new, vote with the President.'"[60]

Hubbard ultimately stuck with the Jones resolution, but most of his southern colleagues did not. Secretary of the Treasury Donald Regan assured waverers that a vote for the new "Gramm-Latta" package's large spending reductions did not commit them to its three-year across-the-board tax cuts. Budget resolutions set a floor for revenues, not a ceiling. The administration was telling southerners they could have their cake and eat it too: support a popular president, yet preserve your option on the tax cut. "If we get them to the first plateau," Regan said, "we'll just let them sit there. Then we'll try to go to the next plateau."[61]

The administration also tried to make defection easier for boll weevils by presenting the Reagan plan as bipartisan. Gramm was the first sponsor of "Gramm-Latta," which reflected his actual role. With a Democratic first sponsor, the administration could claim that its plan was bipartisan while Jones's plan, without Republican sponsorship, was a party document—a disadvantage because most Americans, unlike political scientists, consider partisanship a synonym for divisiveness and other bad things. Delbert Latta, in his twelfth term in the House, found deference to second-term member Gramm difficult. After lengthy negotiations, George Bush called Latta and told him the president was relying on his cooperation.[62] Some southern Republicans wanted the issue joined in a more partisan manner to force the weevils either explicitly to endorse the Republican plan or to defy the president. Ed Bethune of Arkansas felt that drawing the line would increase his party's chances of carrying the South in 1982. Stockman, however, was gambling for policy control; building up the southern GOP was not his concern.

That left the gypsy moths. Lobbying these Republicans, the Administration used the same kind of arguments as it had with the boll weevils: Yes, you may not like everything here, but it's just the first step. It can be fixed later, but if the president's beaten now and you're the ones who beat him, you get the blame, and no change from the status quo will be possible. The gypsy moths, however, objected to different parts of the package, especially the defense buildup. Representative Bill Green reports that, whenever he told Stockman the defense numbers were too high, the budget director replied that they certainly were but he viewed them as a reserve. They could be pared later to pay for a natural disaster like Mount St. Helens or an unnatural disaster such as continued high interest rates.[63] Stockman reports that "between thirty and fifty 'soft' Republicans" badgered Bob Michel to restore various cuts. Finally Michel exploded: "Geeminie Christmas! When are you guys going to recognize that this is only a budget resolution? It doesn't cut anything! It's all


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assumptions! If you've got problems, write 'em down and send 'em to me. We'll take care of them later!"[64]

In 1981 the budget resolution, furthest from policy substance, was the vote most easily presented as, Are you for or against the president? Therefore, the most important and dramatic act of the budget resolution campaign was the president's speech on April 28. Although a third speech on the same subject in three months was a bit much, House leaders could not refuse this platform to the wounded president.

In his first formal appearance since the assassination attempt, Reagan spoke to a joint session of Congress. A "senior White House aide" commented:

Normally you have the idea that a new President has an open window for just so long and it shuts very quickly in terms of public interest and support. But the shooting incident and the way the President handled it, the character he showed, has reopened the window and given him a second opportunity. Tonight the country was watching again to see how he looked, what his voice sounded like, how he handled himself and what he had to say.[65]

Ronald Reagan looked ruddy and vigorous, sounded slightly hoarse, and received, in Robert Michel's words, "the kind of reception that makes a few of the waverers feel, Gosh, how can I buck that?"[66] He received two standing ovations before he even began to speak. When he spoke, he surrounded some of the same material contained in his first two speeches—statistics about the nation's economic plight, assertions that the election was a message that government was too big and spent too much—with passages that tugged at the emotions of his audience. In those passages the president spoke about America and identified himself and his plans with what Americans hope their country can be. America, he said, was not failing but, listening to doomsayers, had merely lost some of its faith. He evoked powerful symbols—the sacrifice of those wounded in the assassination attempt and the flight, two weeks earlier, of the first space shuttle—to argue that America was good and America was strong.

His budget (or rather, Gramm-Latta) should be adopted over the alternative Jones plan, Reagan said, as an affirmation of what makes America great: "dedicated police officers like Tom Delahanty, or able and devoted public servants like Jim Brady." Within the body of the speech, Reagan spoke also of the tax program's problem with the balanced budget and his three possible arguments—supply-side, children's allowance, and the tax reductions that were not so large after all. He emphasized the last, which had greatest appeal to moderates:


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Now I know that over the recess in some informal polling, some of your constituents have been asked which they'd rather have: a balanced budget or a tax cut. And with the common sense that characterizes the people of this country the answer, of course, has been: a balanced budget. But may I suggest, with no inference that there was wrong intent on the part of those who asked the question, the question was inappropriate for the situation. Our choice is not between a balanced budget and a tax cut. Properly asked, the question is: Do you want a great big raise in your taxes this coming year or, at the worse, a very little increase with the prospect of tax reduction and a balanced budget down the road a ways…. A gigantic tax increase has been built into the system. We propose nothing more than a reduction of that increase.

Although Reagan was arguing his plan was not so radical, the depth of the spending cuts alone was enough to convince Congress that the plan was not business as usual. He proclaimed that "the old and comfortable way is to shave a little here and add a little there. Well, that's not acceptable any more. I think this great and historic Congress knows that way is no longer acceptable." The Republicans gave that statement a standing ovation, with as many as seventy Democrats joining them. Max Friedersdorf turned to an aide and asked, "Can we count this as our vote and pack up and go home?" Tip O'Neill turned to George Bush and said, "Here's your forty votes."[67]

After the speech, the Speaker declared that "we'll either win it by five or six votes, or lose it by sixty, because if you start to lose it, the swing will come." O'Neill expected votes to switch because members would want to be on the winning side, especially because Gramm-Latta seemed more popular. Nevertheless, Democrats desperately looked to adjust Jones's package, giving it a better chance to pass. Deputy whip Bill Alexander (D-Ark.) suggested scotching the first year of the tax cut to balance the budget in FY82; the idea was an appeal to the boll weevils. After polling members on April 29, it turned out that, in Alexander's own assessment, it "didn't buy us enough votes." In another appeal to the weevils, the Democrats added back into their plan the $6.5 billion difference in budget authority for the military. Worries that this might upset liberals were erased by the knowledge that losing would upset them even more.[68]

The final blow came on May 2, when Senate minority leader Robert Byrd announced that, although he did not like the president's budget, he would support it because the public wanted "to give the president the benefits of the doubt." Byrd's concession merely ratified the situation in the Senate, where the Senate resolution would pass overwhelmingly on May 12, but his words put the last House gypsy moth holdouts in an impossible position. "We can't be hanging out there," one complained, "if your people are throwing in the towel."[69]


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On May 6 the two liberal alternatives were handily beaten. The debate on May 7 symbolized the defensive position of the Democrats. "Let history show," said House minority leader Robert Michel, "that we provided the margin of difference that changed the course of American government."[70] Speaker O'Neill replied, "Sure, in the 1970s my party made mistakes. We overregulated. There was too much red tape and probably too much legislation. And we paid for it at the ballot box last year…. [But] do you want to meat-ax the programs that made America great? Or do you want to go slow in correcting the errors of the past?"[71] One could hardly find a better phrase—the programs that made America great—to capture the difference between the liberal Democrats' vision of the role of government and that of the president. The Speaker could have claimed, in fact, that the actors who starred in Reagan's speech a week before—the policeman, secret service man, the astronauts, and indeed all of NASA itself—were part of government programs. Then the president could reply that America was great long before big government and the New Deal. On this occasion the president won. Gramm-Latta passed, 253 to 176.

The president won sixty-three Democrats; no Republicans deserted him. Some Democratic defectors would have voted with their party if the vote had been close; eleven of them would not defect in any later major budget votes. The Democrats had lost badly, but they had lost a public struggle in which, despite the fury, no final decisions were made. When actual program legislation was changed, the results might differ. Tip O'Neill was already looking ahead to the reconciliation legislation. "You don't think I'm going to do this in one package, do you?" the Speaker asked. "I'm going to have some selected votes and I'm going to pick some beautiful ones."[72]


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