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Nine Return of the Deficit

1. Charles Alexander, "Making It Work," Time, September 21, 1981, pp. 38—40, 45-47, 50-51. [BACK]

2. See Robert J. Samuelson, "For the Economy, Unanswered Questions," National Journal, August 8, 1981, pp. 1405-10; News Roundup, in Wall Street Journal, July 31, 1981, p. 1. [BACK]

3. See John S. DeMott, "Sky-High Interest Rates," Time, May 18, 1981, pp. 64-65; Council of Economic Advisers, "Economic Indicators," various months; and Greider, Secrets of the Temple, pp. 381-93. [BACK]

4. See Lindley H. Clark, Jr., "Mixed Picture: Inflation Slows Down, But So Does Economy; Joblessness May Grow," Wall Street Journal, July 1, 1981, pp. 1, 20. [BACK]

5. Ibid. [BACK]

6. John M. Berry, "Fed Decides to Lower Key Money-Growth Target," Washington Post, July 14, 1981, p. E1. [BACK]

7. Ibid. [BACK]

8. Ibid. [BACK]

9. John M. Berry, "Banking Panel Attacks Volcker on Tight Money," Washington Post, July 22, 1981, p. E1; Robert J. Samuelson, "The Narrow Presidency," National Journal, August 1, 1981, p. 1387. [BACK]

10. Stockman, Triumph of Politics, p. 272; interviews. [BACK]

11. Ibid., p. 269; and Barrett, Gambling with History, p. 172. [BACK]

12. Barrett, Gambling with History, p. 172, 340. [BACK]

13. Ibid., pp. 170-72; Peter Goldman, "Budget-Cut Blues Ahead," Newsweek, August 17, 1981, p. 28. [BACK]

14. Stockman, Triumph of Politics, p. 277-78. [BACK]

15. See description in ibid., pp. 279-81. [BACK]

16. Peter Goldman, "An Ax Over the Pentagon," Newsweek, August 31, 1981, pp. 19-20; Kenneth H. Bacon, "Budget Blight," Wall Street Journal, August 12, 1981, p. 1. [BACK]

17. With only a 5 percent tax cut, scheduled payroll tax increases coming on line in January, and the spending cuts, policy was going to be no more stimulative in either a supply- or demand-side sense than in 1981. [BACK]

18. Barrett, Gambling with History, pp. 176-77; Goldman, "An Ax Over the Pentagon"; Stockman, Triumph of Politics, pp. 282-88. Our account of most of these internal debates relies heavily on Stockman. Barrett, however, tells essentially the same story, and this was confirmed in our interviews. The reader who would like an extremely vivid account should see Triumph of Politics. [BACK]

19. Barrett, Gambling with History, pp. 177-78; Tom Morganthau et al., "Reagan's Confidence Gap," Newsweek, September 21, 1981, p. 27. [BACK]

20. Morganthau et al., "Reagan's Confidence Gap"; Albert R. Hunt and Dennis Farney, "GOP, Upset by High Interest Fees, Returns to Congress with Talk of Credit Controls," Wall Street Journal, September 10, 1981, p. 3. [BACK]

21. Harry Anderson, "Reagan's Ailing Economy," Newsweek, September 7, 1981, pp. 18-20. [BACK]

22. Greider, Secrets of the Temple, chap. 11, pp. 351-404; also 405-31. [BACK]

23. Stockman, Triumph of Politics, p. 291. [BACK]

24. Ibid., pp. 290-92. [BACK]

25. Barrett, Gambling with History, pp. 178-80; "Snipped," The Economist, September 19, 1981, p. 21; Morganthau et al., "Reagan's Confidence Gap"; Stockman, Triumph of Politics, pp. 295-99. [BACK]

26. Stockman, Triumph of Politics, p. 299. [BACK]

27. Ibid., pp. 304-6. [BACK]

28. Ibid. [BACK]

29. Ibid., p. 316. [BACK]

30. Ibid. [BACK]

31. Ibid., p. 323; Barrett, Gambling with History, pp. 182-83. [BACK]

32. Timothy B. Clark, "Reagan's Balanced Budget—One Step Closer, One Step Further Away," National Journal, September 26, 1981, pp. 1712-16; "Reagan's budget plans generate tepid support, plenty of confusion," National Journal, October 3, 1981, pp. 1751, 1778-89. [BACK]

33. Tom Morganthau et al., "Running to Stay in Place," Newsweek, October 5, 1981, pp. 24-26. [BACK]

34. "Reagan's budget plans generate tepid support." [BACK]

35. "A Reagan Retreat," Time, October 5, 1981, p. 10. [BACK]

36. "Things That Go Bump," The Economist, October 3, 1981, pp. 11-13. [BACK]

37. For a good description of gypsy moths at this time, see Richard E. Cohen, "For the Gypsy Moths, the Goal Is to Change GOP Policy, Not Bolt the Party," National Journal, October 31, 1981, pp. 1946-49. [BACK]

38. CQA 1981, pp. 332-33, 338-39; Richard E. Cohen, "Reagan's budget plan faces high hurdles, shortage of time," National Journal, October 24, 1981, pp. 1887, 1915. [BACK]

39. These decreases included $40 billion in entitlement cuts, and $30 billion from reductions in other spending and, because of less borrowing, in interest payments. "You Pay Your Money, You Take Your Pick," p. 1997; and Richard E. Cohen, "Lots of Movement, Little Action on Closing the Deficit," pp. 1971, 1997, National Journal, November 7, 1981. [BACK]

40. Michael Reese, "Goodbye Balanced Budget," Newsweek, November 16, 1981, p. 34. Time reported this as "I didn't come here to balance the budget. I was elected to reduce Government intrusion in the economy." Ed Magnuson, "Bye, Bye, Balanced Budget," Time, November 16, 1981, pp. 26, 31. [BACK]

41. Barrett, Gambling with History, p. 185; Magnuson, "Bye, Bye, Balanced Budget." [BACK]

42. Timothy B. Clark, "The GOP Is Looking Over Its Shoulder At the Specter of High Interest Rates," National Journal, November 7, 1981, pp. 1972-77; Kenneth H. Bacon and Dennis Farney, "Embattled GOP: Reagan's Vow To Stick To Economic Program Saps Base in Congress," Wall Street Journal, November 17, 1981, pp. 1, 19. [BACK]

43. Stockman, Triumph of Politics, p. 351. [BACK]

44. We quote Greider's Education of David Stockman and Other Americans liberally in our history; it contains the original article plus Greider's description and interpretation of the flap that followed. [BACK]

45. Tom Morganthau et al., "Et Tu, David Stockman?" Newsweek, November 23, 1981, p. 40. [BACK]

46. For a similar judgment, see "Mr. Stockman's Future," editorial, Wall Street Journal, November 16, 1981, p. 22. [BACK]

47. Stockman, Triumph of Politics, p. 5. For the cartoon, see Pat Oliphant, Ban This Book! (Kansas City: Andrews and McMeel, 1982), p. 71. [BACK]

48. Stockman, Triumph of Politics, pp. 1-3. [BACK]

49. Barrett, Gambling with History, p. 189. [BACK]

50. Ed Magnuson, "A Visit to the Woodshed," Time, November 23, 1981, pp. 10-13. [BACK]

51. The bill funded the legislative branch for the entire year. [BACK]

52. The Defense Department appropriation to be reported by the House Appropriations Committee; conference reports on the Interior, HUD, and Agriculture appropriations; House-passed bills for Military Construction and Energy and Water; House-passed bills or fiscal 1981 levels, whichever was less, for Commerce, Justice, State and Judiciary, for Transportation, the District of Columbia, and for Labor, Health and Human Services—Education; the House-passed or Senate-reported bill, whichever was less, for Treasury, Postal Service; the fiscal 1981 or budget request levels, whichever was less, for foreign aid. CQA 1981, p. 295. [BACK]

53. Ibid. [BACK]

54. Ed Magnuson, "After the Lost Weekend," Time, December 7, 1981, pp. 16-19. [BACK]

55. CQA 1981, p. 297. [BACK]

56. "For taxonomy freaks," an OMB official commented on reviewing our manuscript, this "was called a four percent cut with a Baker floor. Our inability to price out this very amendment was the initial impulse leading to the development" of a new OMB budget scorekeeping system. [BACK]

57. Magnuson, "After the Lost Weekend." [BACK]

58. CQA 1981, pp. 300-301. [BACK]

59. Magnuson, "After the Lost Weekend." [BACK]

60. CQA 1981,p. 301. Pages 294-301 are the major source of this story. [BACK]


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