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Passing a Budget: The Senate

The Reagan budget was dead; the bipartisan budget was stillborn; now it was Domenici's turn. The day after the Reagan-O'Neill meeting, SBC met and began drafting. Senator Moynihan proposed a vote on the president's budget so as to embarrass Reagan before his television address that evening. Domenici prevented that vote, but not until he insisted that "we don't have to be subtle. The President's budget will not pass."[41]

Although Reagan used his speech to appeal for support, the response, as in September, was minimal. Kent Hance reported that he had received only fifteen calls compared to one thousand after one of Reagan's 1981 appeals. "People want to support the President," said Louisiana's John Breaux, "but the enthusiasm has worn off, except for the hard core."[42] There was little reason for representatives to fear presidential wrath for interring his budget.

The SBC chairman went to the White House on Monday, May 3, to discuss his plans. Then, while admitting that congressional leaders and President Reagan showed "much concern and consternation" about his plan, Domenici announced his proposal to the press: a three-year tax increase of $125 billion, a one-year social security benefit freeze, and many other spending reductions. The SBC chairman emphasized that "this is not a Republican plan, this is not a White House plan, this is my plan." Domenici was going to force everyone else to react to him; he had taken the position that Reagan had always claimed to (but no longer did) occupy: the man with a plan, challenging others to articulate alternatives. Slade Gorton of Washington and Steven


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Symms of Idaho voiced their support, and William Armstrong, leader of SBC's conservatives, announced that the plan's "sense of rough justice" won his support.[43]

SBC met to begin its drafting on Tuesday, May 4; Hollings moved for a vote on the Reagan budget. Domenici agreed and, sending a message to the president, began the voting with his "no." The senators laughed and cheered the 20 to 0 wipeout.[44] So much for any Reagan hope that the Gang's breakdown would resurrect the original White House budget.

Hollings then proposed his own alternative, including a one-year social security COLA freeze followed by two years of COLAs limited to 3 percent less than actual inflation. In his draft, Hollings (like Domenici) allowed increases in food stamps, veterans' benefits, and supplemental security income. Unlike Domenici, SBC's ranking Democrat would not have frozen domestic discretionary spending; and Hollings's $36 billion three-year defense slowdown was larger than that in Domenici's plan. Hollings also proposed a $198 billion, three-year tax hike, including a halving of the 1983 tax cut.

By going out front on social security, against the advice of his party leaders, Democrat Hollings let Republicans hope that they might not have to take full blame for pension changes. Furthermore, Hollings's proposal provided an alternative that, from Reagan's perspective, looked far worse than the Domenici plan. Robert Kasten (R-Wis.) proposed only a $73 billion three-year revenue increase, guaranteeing the third-year tax cut, but that proposal was rejected 17 to 4. The Kasten vote made it obvious that the committee meant business on taxes. Domenici's plan began to seem both more necessary and more attractive to the president than it had been a few days earlier.[45]

That morning Reagan had met with James Baker and Stockman to devise new budget numbers. When SBC recessed late that afternoon, Stockman and Baker met with Domenici. They agreed that the tax hike would be reduced to $95 billion in return for presidential leadership on social security. The freeze was abandoned. Instead, the budget would require social security savings, to be produced by the Greenspan commission, of $6 billion in FY83 and $17 billion in both FY84 and FY85. Republicans hoped to present the cuts, not as balancing the budget on the backs of the elderly, but as securing the pensions by instigating needed reforms. Domenici took the package to a caucus of SBC Republicans and won their support. The president pledged his support in a phone call; and the compromise passed the committee on an 11 to 9, party-line vote.

Reagan strongly endorsed the Senate Budget Committee plan the next


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day. The tax hike was less than he had been prepared to accept in the Gang-of-17 negotiations; defense spending would be more; social spending cuts would be substantial. When asked about social security, he suggested that the savings might come from "an entire restructuring of the program," a line that revealed the president's old distrust of the program and, fortunately for him, received little publicity. Unfortunately for Reagan, the proposal's raw numbers were trouble enough. Democrats began blasting the social security provisions even before they emerged from committee on the night of May 5. "This is a time bomb designed to raid and loot the Social Security system," declared Michigan's Senator Riegle, "but they want to wait until after the election."[46] "The President proposes to mortgage the future of the elderly to keep alive the folly of his Kemp-Roth tax cut," declared Minority Leader Byrd.[47]

Vulnerable Republicans, including Senators Lowell Weicker, John Chafee, David Durenberger, and John Heinz, all up for reelection in 1982, ran for cover. Out at the grassroots, Republicans already were in a near-panic about the political impact of the recession. Governors Robert Ray of Iowa, William Milliken of Michigan, and Albert Quie of Minnesota had declared that they would not run for reelection in what promised to be a very bad year for their party. Now, the New York Times reported, Republican pollster Robert M. Teeter "said he had been getting calls from worried Republican candidates all day. He said he had been told that Democrats were so overjoyed at the political opportunity they had been handed that 'they can't believe what they're hearing.' He commented sourly, 'Me neither.'"[48]

Republican House leaders declared against the compromise on May 11. Robert Michel insisted that members who had to run for reelection could not be saddled with the social security cuts; the matter would have to wait for the report of the Greenspan commission. Trent Lott added, "Social Security is out, Period. No plug, no honorable mention."[49] Back in the Senate that same day, Daniel Moynihan proposed an amendment to the defense authorization bill that would repudiate the social security cuts. Howard Baker won the votes to defeat Moynihan only by promising an amendment that would put the Senate on record as opposing any but "corrective" actions "to save the system."[50] So died the social security part of the SBC budget. Newsweek (in "The Third Rail of Politics—touch it and you're dead") quoted a White House aide, "All Republicans should be required to get a lobotomy before they can say the words 'social' or 'security' again."[51]

Senate Republicans dumped the social security provisions on May 18. They also added back $3 billion in domestic spending so as to aid the reelection prospects of nervous Frostbelt Republicans. As adjusted, the


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package was fairly similar to that of the Gang of 17. Despite some grumblings, these changes were enough to unite the party. The united Republicans took the resolution to the floor, beat back numerous Democratic amendments, and passed it, 49 to 43, on May 21.[52]


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