Preferred Citation: White, Joseph, and Aaron Wildavsky. The Deficit and the Public Interest: The Search for Responsible Budgeting in the 1980s. Berkeley New York:  University of California Press Russell Sage Foundation,  c1989 1989.

Six Gramm-Latta 1

Gramm-Latta 1

The February 18 message impressed but did not please the Democrats. "They've put a giant-sized package together in 30 days," said Tip O'Neill. "Are there inequities? You can bet there are inequities." Democratic interest groups, particularly labor, minced no words: "It is a soak the poor and give it to the rich proposition," said Steelworkers' President Lloyd McBride; Albert Shanker of the American Federation of Teachers called the plan "Robin Hood in reverse."[1] Labor Department programs had been cut drastically, from $34.5 billion in the Carter budget to $26.7 billion. Nearly all the remaining activities of the department, in addition, would be directed by friends of business.[2]

Some Democratic intellectuals, however, approved many of the cuts. Stockman had harpooned many beasts, such as Impact Aid and dairy price supports, that budget analysts had been attacking for years. In an article that blasted many cuts as inequitable, the New Republic nevertheless agreed "that the present federal budget is full of fluff and waste and needless subsidy…. Those who hope for a greatly expanded government role, as well as those who want a greatly reduced one, should be happy to see the Republican administration clean up the Augean stable." Reagan's argument for better targeting a number of programs seemed right to many observers; Carter himself had tried to reduce the school lunch "middle-class subsidy." Many programs attacked–for example, CETA, EDA, and rent subsidies—were, in the New Republic's words, "badly conceived, or redundant, or top-heavy with administration, or otherwise not cost-effective." For liberals the problems with those reductions was that "all of Reagan's proposed cuts, taken together, don't rationalize government largesse—they simply reduce it."[3] These reformers would have liked to replace those programs with something better.

The Democrats also sensed the public mood to cut spending; Senator


Pryor reported that his Arkansas constituents were even willing to see farm mortgage programs reduced.[4] Massachusetts liberal James Shannon found that his constituents largely believed that federal programs had benefited the undeserving poor at the expense of hard-working middle-class citizens.[5] Therefore, on February 20 when they replied to the president's speech on a television show, Democrats avoided a frontal attack on spending cuts. Jim Wright declared that Congress would support "refurbishing the nation's defenses, encouraging private investment to modernize America's industrial machinery, lifting the burden of unnecessary government regulation, cutting expenses, and restoring more local control over the schools"—in other words, "us too!"[6] Instead they attacked the tax cuts. Senator Gary Hart suggested a one-year trial for the plan; and Chiles declared that it would be no favor to send the taxpayers "a tax refund written in red ink."[7]

Early in March Senate Minority Whip Alan Cranston summarized the Democrats' options:

1) give [Reagan] everything he wants, on the theory it will prove disastrous and the Democrats then would benefit politically from Reagan's failure; 2) propose a complex substitute for the Reagan package; 3) give Reagan most of what he wants, but fight tenaciously against the worst of his cuts. Cranston dismisses the first as "irresponsible," the second as impractical and "not politically bright," which leaves him with the third.[8]

Throughout this period there were rumors that the Democrats would take the first approach—roll over, play dead, and hope for the best. But that made little sense. If they wanted Reagan to get the blame for failure, Democrats would have to oppose him. There was no way to vote secretly.

The first test of Democratic strategy came in March, when the Senate Budget Committee reported out reconciliation instructions before a budget resolution, as a way of locking in support for spending cuts. Democrats submitted a blizzard of amendments; they all failed. Baker and Domenici attained virtually unanimous Republican support on every key vote. In the face of this unprecedented GOP unity, Democrats had little hope of winning. Yet they were handicapped further by their own divisions.

A GOP aide recalled that "there were individual [Republican] defections. But there was a hell of a lot of reliance on conservative Democrats to make up for them…. You knew you would lose Hatfield on defense, but you got Stennis and Nunn." The package was designed to appeal to the southerners; as another put it: "Sure, we wouldn't screw with TVA, Impact Aid, farm programs; we wouldn't cut a lot out of dams—Bennett (Johnston) was ranking minority on Energy and Water. Tennessee-Tombigbee, Clinch River—we had our eyes open, we knew


what we had to do." All the Senate Democratic Policy Committee could do was keep a list of embarrassing votes for campaign use.[9]

Back in the House, Jones kept trying to assemble a plan that could unite the party. Stockman, who watched Jones through the eyes of new Budget Committee member Gramm, was impressed by Jones's performance.[10] The new Budget chairman, however, had trouble with his own party. Much of the leadership still distrusted him. Jones's personal style did not help; one experienced staffer commented that Jones "was pretty good at communicating with people but not good at making people feel they'd been communicated with." This perception was shown in another aide's comment that "the problem with Jones was, he held things tight to his vest. You never knew what he was going to do."

Yet Jones was heading in the same direction as two groups of his colleagues who were drafting their own proposals. These two groups—the 1980 Mineta, Panetta, Wirth, and Gephardt "Gang of Four," and liberals Steven Solarz and Thomas Dowhey of New York, Paul Simon of Illinois, and Les Aspin of Wisconsin —merged, worked out a detailed scheme, and then arranged to meet with Jones. At that meeting on April 2, the participants discovered their proposals were quite similar. A centrist Democratic consensus was forming.[11]

A Pause for Public Opinion

As they looked at policy to see what they could bear to concede, the Democrats watched public opinion to see what they would have to concede. The polls showed some support for the Democrats' skepticism about the tax cut. A CBS New York Times poll taken in late January pictured the public more interested in budget balance than a tax cut by an overwhelming 70 percent to 23 percent margin. Respondents (52 percent) preferred a smaller tax cut to either a larger one (24 percent) or none at all (16 percent). As many as 61 percent of respondents wanted to spend more on defense, but a Time poll taken a little earlier showed respondents doubtful that tax cuts and defense hikes could be combined with a balanced budget; when forced to choose, respondents preferred budget balance. Both polls evinced little enthusiasm for any spending cuts save welfare.[12]

Legislators had other barometers of opinion; Reagan's speeches generated a flood of mail to Congress that, combined with their own soundings back home, made them leery of opposing him. The Speaker reported that his mail and his constituents showed strong support for Reagan. But, as time passed, the margin of support in letters and from constituents diminished.

Opinion soundings told a mixed story about Reagan's own popularity,


which is what mattered if the issue were posed as for or against the president. He was quite popular, but not by the standards of new presidents. A Gallup poll showed Reagan's disapproval rating of 24 percent to be far higher than for any other president at a similar period; his 59 percent approval, moreover, was lower than that for any previous new administration.[13] Reagan's pollster, Richard Wirthlin, concluded that people were polarizing, with a strong majority favorable to the plan.

Through most of the winter Speaker O'Neill was relatively quiet. He didn't want his party to seem to be obstructing the new administration, but he did encourage hearings on the budget proposals to focus attention on their consequences. Majority leader Wright took a more public stance against the Economic Recovery Program, but he also wanted to have it both ways: accepting budget restraint but criticizing specific cuts. Some liberal Democrats saw in the Speaker's quiet and in Wright's and Jones's compromise positions "a timid leadership and a runaway Budget Committee chairman determined to sell us out in the false hope of gaining conservative votes."[14] They would criticize the leaders throughout the battles of 1981 for not allowing the chips to fall where they may. Tip O'Neill cared too much about programs not to try to save some, but knew he couldn't save them all. And so he temporized, partly due to the lingering shock of the election and partly out of a political veteran's sense that, in politics, timing is everything. Anti-Reagan trends had to be nursed, not assumed. Why not see what Jones could do?

On March 12 Jim Wright, citing poll data, wrote to his Democratic colleagues: Reagan did not really have a mandate for the policies he was proposing; the Reagan plan imposed "a grossly unfair burden on those least able to carry that burden, those Mr. Reagan describes as the 'truly needy'"; and "the people want Congress to be cooperative. They do not want it to be supine."[15] By the end of March, Democrats were rallying around the idea of a comprehensive budget alternative that would reduce the deficit by reducing the tax cut, cut spending but protect some social programs. On April 6 Jones unveiled his plan, which was supported by the double quartet of members who had been working separately on their own plans. The rationale for the alternative came two days later in a Statement on Economic Matters adopted by the House Democratic Caucus.

"For half a century," the caucus statement declared, "the Democratic Party has been an engine of equity and progress in America…. The Democratic Party has seen our American government not as an enemy, not as 'the problem,' as President Reagan said it was in his Inaugural Address, but as a necessary instrument for achieving vital public goals." Although inflation had many causes, Democrats argued that reducing spending would help and would also bring down interest rates. They


accepted the need for lowering taxes raised by inflation bracket creep, but they would not "join in any program of fiscal control that puts the main burden of fighting inflation on the backs of middle- and low-income workers [through spending cuts] while providing unprecedented benefits for the privileged few [through tax cuts]." The tax program, they argued, "is inflationary because it will stimulate demand before supply, creating enormous deficits in the process." They wanted to stimulate investment but did not trust the holders of capital; they therefore wanted business tax cuts to be more strictly targeted than in the 10-5-3 plan. They justified individual program cuts as helping curtail inflation, not as freeing market forces. The caucus statement made clear that the ultimate stake of the battle, the point where conservative Democrats like Jones and moderates like Gephardt most differed from Reagan, was the role of government. Throughout American history, "private enterprise has been strengthened, rather that hindered, by government-aided research and development, development of basic transportation facilities, and aid to small business, urban areas, and farmers."[16]

The missing piece was willingness to attack Ronald Reagan head-on. As events turned slightly in their favor in March, Democratic leaders gained confidence. The Speaker, deciding it was time to take the gloves off, scheduled a major attack in a speech before the AFL-CIO Building and Construction Trades Council, which met the week of March 30. But it didn't happen.[17]

The president spoke to the Council on March 30. As Reagan left the Washington Hilton that afternoon, a young man named John W. Hinckley, Jr., emerged from the crowd, pulled a pistol, and began firing. Once again, violence slashed into our political body, as with John and Robert Kennedy, Martin Luther King, Jr., and George Wallace. But this time the victim lived; and, unlike George Wallace, Reagan emerged from his ordeal, not hobbled, but larger than life. The nation held its breath, and Speaker O'Neill cancelled his speech.

A mad gunman, as the courts concluded, came within an inch of ending the Reagan revolution. Hinckley's story and his motives need not concern us here. The assassination attempt alone serves to remind us of the tenuousness of history. The scene was confusion; the president himself did not know that he had been shot, though he was in "paralyzing pain." Three unintended victims were seriously wounded—Secret Service Agent Tim McCarthy, patrolman Thomas Delahanty, and White House Press Secretary James Brady. Both the operation to remove the bullet from the president's lung and the subsequent recovery period were far more dangerous than the White House let on.[18] The president and his staff worked to paint a picture of stability and strength; hints of confusion and weakness, it was feared, would encourage challenge overseas.


They did not want to lose the initiative in their fight to change American government.

To demonstrate that the president and his administration were still in charge, Baker, Meese, and Deaver (on April 1, the morning after the shooting and the three-hour operation) brought Reagan the dairy price-support freeze legislation. "Hi, fellas," greeted the president, "I knew it would be too much to hope that we could skip a staff meeting."[19] He shakily signed the legislation.

Reagan used humor to reassure himself and those around him; his staff, and doctors, relayed his jokes to the general public for the same reason. "Please tell me you're Republicans," he quipped to the surgeons as he was being wheeled to the operating room; when told by Lyn Nofziger that the government was running normally, he responded, "What makes you think I'd be happy about that?"[20]

The shooting, and his brave reaction to it, garnered Reagan an extra dose of not just sympathy but also respect and awe. At a time when the polls showed his popularity beginning to slide, he received a new wave of personal support. This was not just a movie-star president but a heroic president. His pollster concluded that the event made a permanent impression on the public, creating a reservoir of good will that would go on protecting him even when his policies were controversial.[21]

As Reagan convalesced, his administration's lobbying effort had to slow, for its most effective lobbyist had to take it easy. His opponents were equally disarrayed because it would be bad form to attack a recuperating president. A muted tone would not help the Democrats rally their supporters.

The Republicans: Some Victories, Some Doubts

In some ways it is easier to understand the Democrats in 1981 than the Republicans. The Democrats fought in the open, as is their wont. Most Republican maneuvering went on behind the scenes.

Howard Baker called the whole program a "riverboat gamble." At a luncheon meeting at the Post on January 7, Senate Finance Chairman Robert Dole presented not Kemp-Roth but instead the much more limited previous year's Finance Committee bill. Dole said it was his job to guide the Reagan program through the Senate, but he doubted that it would survive undiluted. Around the same time Barber Conable, ranking Republican on Ways and Means, was saying "I don't think for a minute that if the president proposes a flat-rate cut, Congress will agree. Congressmen have other measures, the cost of which will be a trade-off against the tax cuts."[22] He was right about "other measures," wrong about the tradeoff.[23]


The lobbyists were not about to wait for a second bill. As one of them put it, "the judgment around here is that there won't be a second bill or that it won't move in Congress. We're going to have to make every effort to get onto that first bill."[24]

The president was very sure of his position. A presidential adviser recalled:

You look at all the stories being published about backing and filling and they give the impression that Reagan was changing back and forth. That's wrong. The people around him were changing, or some of us were. We were having doubts, and the news coverage reflected that. Reagan hardly moved at all. At one meeting [in January] Reagan got a little impatient with us. He said, "Listen, you guys are talking to each other and no one is asking me what I think. I'm sticking with it [the 10-10-10 approach]."[25]

Republican economists were divided over the merits of the emerging package, but former Federal Reserve Chairman Arthur Burns was unusual in saying that "if I were an economic czar there would be no personal income tax cuts at all this year. We need to be very cautious about adding to the swollen budget deficits that are already in prospect."[26] No one really knew how the markets would react to the tax cuts; most preferred not to attack their own side.[27]

Republican politicians, even more than economists, hesitated to criticize the new administration.[28] This was their chance to govern; criticism was aid to the other side. Members of the administration like Darman and Baker, with backgrounds in other wings of the Republican party, had to show their loyalty to conservative ideals. Dole and Baker were in a similar spot, having both lost the nomination to Reagan; if they were critical, they could be suspected of trying to make the president look bad.[29]

The remarkable unity of Senate Republicans throughout 1981 resulted both from this desire to govern and careful efforts by the administration and Howard Baker to nurture the notion that they were all working together. In December Baker gathered Stockman, Regan, Jim Baker, Anderson, Dole, Hatfield (chairman of Appropriations), Domenici, and Jake Garn (chairman of Banking) to begin working out the program and strategy. Baker met with Reagan two or three times a week, and the White House lobbying staff was instructed to defer to his wishes. Every Tuesday Baker met with the Senate's committee heads, coaxing them toward unity. Although some Republicans had doubts, Senate Majority Whip Ted Stevens reported, they agreed to maintain public silence "because we realize that if one Senator tries to break down an agreement, then the others will do so."[30] Consultation and unity were enhanced by the fact that Reagan was loyal to his troops as well. When Baker announced


on March 26 that the executive committee of the Senate Republican Policy Committee had agreed to postpone considering "social issues" to 1982, he was blasted by the New Right. Reagan immediately told the Post that he agreed with the decision.[31]

Unity was easier on spending cuts than on tax cuts because, to a certain point, spending cuts fit both the Republicans' preferences and all politicians' perception of the public mood. Thus, Newsweek reported "private agonizing" by the nation's governors at their national conference but, by 36 to 2, they announced they were "prepared to accept budget cuts."[32]

An even better example of the mood came when Congress in March froze the price support for dairy products, preventing a scheduled increase worth $147 million in FY81 and $1.1 billion for FY82. There is a lot of money in milk, and it flows both ways, from Congress and to Congress. When Agriculture Committee Democrats in the Senate caucused about the issue, they began by talking about how to kill the proposed cuts but were soon discussing how bad it would look to be on the wrong side. "I would have found it very difficult," said David Pryor of Arkansas, "to vote for that particular program and then go home over the weekend and give speeches about the need to cut spending."

The Senate Budget Committee's maneuver in reconciling first, before a budget resolution, was designed to maximize both unity and spending cuts. It also seemed to accommodate the need to demonstrate spending reductions so that the tax cut would look more plausible. In SBC and floor action through March and into early April, the strategy seemed to succeed brilliantly. Republican unity on the Senate floor was overwhelming. Yet not all was as it seemed.

The most dramatic event went unreported until much later. Both protagonists have written about it. David Stockman writes,

A warm fire was crackling in Howard Baker's office, when we arrived at 9:30 a.m. on March 17. The Senate Republican leadership and Budget Committee members were already assembled…. Reagan led off with an Irish joke, and the meeting got down to business: their proposal to attack nearly one quarter of a trillion dollars in indexed pensions, affecting roughly 36 million Americans.[33]

In defiance of Stockman's plan, Domenici and his GOP allies had decided to attack the COLAS. As honest budgeters, interested not in policy revolution but in restraining spending per se, Domenici, his staff, and Democrats like Hollings and Chiles believed that spending control had to include a diet COLA. Domenici told of the incident in an op-ed piece for the Washington Post on January 21, 1986. Its title, "Ghosts of Deficit Forever," conjures up Dickens's Christmas Carol . The scene in Howard Baker's chamber is the last revealed to the guilty politicians by the Ghost


of Budgets Past. The end, revealed by the Ghost of Budgets Future, is collapse under Gramm-Rudman-Hollings. That should give the flavor of how Domenici felt about the scene he described:

The president leans across the table and tells the 12 Republican members of the Senate Budget Committee that he will not support a bipartisan attempt in that committee to freeze cost-of-living adjustments for Social Security recipients as part of a deficit-reduction plan. He asks them to join his opposing effort. In front of the senators is a sheet showing savings from a one-year freeze on the COLAs—$88 billion over five years, and more than $24 billion in the year 1986 alone.

The senators relent. They go back to committee and vote against the move to freeze the COLAs. Social security, although larger than all domestic non-entitlement spending programs put together, is protected in future budget battles; it comprises almost 25 percent of the non-interest spending in the federal budget.

Jim Baker did not think Republicans could ever touch social security; Howard Baker had helped arrange this meeting as a way of slowing down Domenici and his troops. The president told the group, "I promised I wouldn't touch Social Security. We just can't get suckered into it. The other side's waiting to pounce."[34] Stockman writes that the senators wanted to cut the COLA so they could put money back into other programs. That ascribes to the senators a quite remarkable lack of political acumen.[35] Rather, the meeting on March 17 became part of the long-term price of 1981, grounds for resentment and recriminations when the deficit blew up.

Republicans Shot Down

Besides social security, Senate Budget Republicans attempted and made only a few changes in the administration's domestic cuts. On the Senate floor, the major test of unity occurred on March 31.

Five veteran Republican senators were a liberal remnant within their party. Those senators were Charles Mathias of Maryland, John Chafee of Rhode Island, Lowell Weicker of Connecticut, Robert Stafford of Vermont, and Mark Hatfield of Oregon, who as the new chairman of Appropriations was really on the hot seat. At Mathias's instigation, the group began meeting regularly soon after the election. All were longtime party loyalists, but all had ideological and constituency problems with the administration. They hoped to use their pivotal position, given their party's slim Senate margin, to moderate policies. None had any relations with Reagan, but all five were close to Howard Baker and wanted to help him control the Senate.


Torn between party and belief, Hatfield and company faced the blizzard of Democratic amendments. An aide recalls that it was

this Draconian thing. There was a Metzenbaum amendment on child vaccines, all sorts of terrible votes. They were all "people" sort of votes, like AFDC, and the Republicans all in lockstep were voting them down. Chafee, Stafford and Weicker were all up in 82 and they got very nervous. Their advisors were saying, "These are your constituents, they elected you in the past, you're taking this Republican stuff too far!"

Chafee decided to offer an amendment restoring funds for programs of particular interest to northerners and urbanites, such as home heating assistance, Urban Mass Transit, Urban Development Action Grants, and education funding. Because the increase in the deficit would be limited to just that package, the administration would be protected; moderates could use the Chafee amendment as evidence that they were representing their constituents and to excuse voting against all the Democratic changes.

Greider reports that "Stockman had no objection. The amendment wouldn't cost much overall, and it would 'take care of those people who have been good soldiers.'"[36] But if Stockman did not really mind, other Republicans did. At the least, the administration's opposition was muted, and Domenici seemed willing to go along. Then Domenici decided to try to beat the amendment. Putting a little back into the basic package "made it easier" for fence-sitting moderate Republicans. As a symbol of the vote's importance, Vice President Bush was in the Senate chair if necessary to break a tie.

Chafee lost 40 to 59. Majority Whip Ted Stevens of Alaska admitted he was voting against Chafee reluctantly, adding that "many of us have been saying no not only to programs we supported in the past, but sometimes to programs we initiated."[37] Eleven Republicans still stood up for Chafee. Hatfield, as a member of the leadership, could not join his "Gang of Five" colleagues; but John Heinz and Arlen Specter (Pa.), William Cohen (Maine), David Durenberger (Minn.), Mark Andrews (N.D.), John Danforth (Mo.), and Charles Percy (Ill.) joined Stafford, Weicker, Mathias, and Chafee. Those Republicans, however, were more than balanced by the seventeen mostly southern Democrats who opposed the amendment.

The Chafee failure showed there would be no coalition of moderate Democrats and liberal Republicans. "Chafee was the one shot we had at making inroads," said Chris Dodd (D-Conn.). "When that failed, any hope of making additional inroads went out the window."[38] The vote also dramatized the situation of the northern "gypsy moth" Republicans of the House and Senate.


Moths, Weevils, and the Unexpected

Any plan that slashes domestic and increases defense spending is necessarily biased against the Northeast and the Midwest. The military and its contractors flock to the sun; but old, decaying industry lives near the great water sources of the North, especially the Great Lakes states. Also, northern Republicans come from a different ideological tradition than did Reaganites: a Protestant activism that Daniel Elazar has called a moralistic or "commonwealth" view of society.[39]

The commonwealth ideology gave rise to movements of conservation and government reform that reflect a hierarchical view of noblesse oblige and proper procedure. Leaders in society have special obligations to give back—to sacrifice for the whole.[40] Ronald Reagan's radical individualism was not congenial to those who believed in a nurturing role for government. Nevertheless, these gypsy moths fundamentally were defenders of authority, uncomfortable with the Democrats' egalitarianism. Trapped between their policy preferences and their identity as Republicans, they were particularly susceptible to appeals for preserving the party's ability to govern.

The Chafee vote showed that, in the Senate, where representation by state favors the South and the West, gypsy moths could not find enough Democratic allies to triumph on the floor. In the House, however, they could tip the balance. There were about half as many Republican gypsy moths as Democratic boll weevils (the other set of potential defectors)—just enough, between the groups, to balance almost perfectly the two sides. In general, the gypsy moths ran well ahead of Reagan in their districts. If they were to be pulled toward the administration, therefore, the attraction would be less electoral incentives, although they might worry about their financial backers and party organizations, but more desire either to be part of a governing team or to avoid being one of a few Republicans who had handcuffed a new president of their own party.

In the early months of maneuvering, the moths, like the rest of their Republican colleagues in the House, had little to do. They had to wait to see the Reagan package, but then they also had to wait to see what alternative Representative Jones would devise. The stage was set for the battle over the first budget resolution.

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


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


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


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


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,


"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


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


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:


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]


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]

Social Security

Victory on the budget resolution did not win over the moneymen whose judgments were so crucial to the administration's economic goals. The president might appeal to the public with his call for daring, but bankers, looking at the numbers, were unconvinced. Stockman conceded in his private conversations with William Greider,

that his own original conception—the dramatic political action would somehow alter the marketplace expectations of continuing inflation—had been wrong…. They don't think that it adds up…. I take the performance of the bond market deadly seriously. I think it's the best measure there is. The bond markets represent worldwide psychology, worldwide perception and evaluation of what, on balance, relevant people think about what we're


doing…. It means we're going to have to make chances…. I wouldn't say we are losing. We're still not winning. We're not winning.[73]

The early bond market rally that Stockman had predicted in his Dunkirk memo had not arrived. Interest rates on bonds, after edging slightly downward in January, were slowly climbing.

There was some good news: the economy seemed to head off on a boom in the first quarter, leaping forward at least at a 5 percent annual rate of growth. Perversely, that growth, if anything, raised inflation fears, so the administration had to downplay the good news to maintain the sense of urgency needed to justify that "something new" in economic policy was required. In spite of the growth, employment was stagnant; interest rates were edging back up from a March low of 17.5 percent for the prime rate. On the day that the House passed Gramm-Latta, a Wall Street Journal headline read, "Wall Street Is Greeting President's Program With Jitters, Turmoil."

"We're in the midst of a very strange financial crisis," says Peter Solomon, managing director of Lehman Brothers Kuhn Loeb Inc. "You'd think Wall Street would be happy. The President is doing just what you'd like him to. Congress is about to give him his budget cuts. Oil prices are falling." But the financial markets are nervous.[74]

Donald Regan argued that it was a case of different horizons—the administration looking toward fiscal 1982, the markets looking at the "disaster" of existing financial conditions. That meant Stockman's theory of expectations wasn't working.

Alan Greenspan declared that the administration had to prove it would curb inflation by cutting the deficit further. That meant taking on social security. Institutionally and ideologically disposed toward budget cutting, Stockman agreed. Independently, that program's difficulties were bringing it stage front within the administration.

The new secretary of Health and Human Services (HHS), Richard Schweiker, was determined to use his position to help solve the impending crisis in social security financing. High payments and low collections in recent years, due to the greater growth of prices than in wages, had left the trust fund in danger of running dry in 1982 or 1983. (The nature and causes of social security's difficulties will be discussed in a separate chapter.) In the meantime, J. J. (Jake) Pickle (D-Tex.) was holding hearings in his Ways and Means subcommittee, developing a bill, and asking the administration for reactions. He made some tentative proposals the administration would not accept, and he pressed them to make their own suggestions.

Democratic leaders' fondest dream was that the administration would


only be so dumb. "I was praying and working to see if I could get them first committed to gutting Social Security in some fashion," one Democrat recalls. They could never have dreamed, however, that they would succeed as quickly as they did.

April 9, the day Gramm-Latta was unveiled, was also the day Pickle announced his modest reform plan. Even as Stockman pushed to pass Gramm-Latta or something like it, he felt that continued skepticism in the markets required bigger savings, quickly. Pickle's plan could help, but it made up for only a "tiny fraction" of the budget gap Stockman thought was freaking out the markets. "I did desperately need a reform plan that saved a lot more than Pickle's paltry proposal."[75] Stockman hoped that "the impending insolvency of the retirement fund would be a handy cattle prod" to force politicians to cut the most sacred of cows.

In an April 10 meeting, Stockman and Martin Anderson insisted that Schweiker develop proposals to close the gap by reducing benefits rather than increasing coverage. (The standard way of handling fund crises had been to include a new category of worker, in this case government employees, who begin paying immediately but do not collect for a couple of decades.) Anderson and Stockman saw many benefits as unearned and unjustified. Stockman's goal was the proposal he had brought with him to OMB and then held out of his original package: raising the penalty for retirement at age sixty-two to a point where there was no actuarial difference between retiring at sixty-two or sixty-five. Schweiker's staff warned that the changes Stockman wanted would never fly on Capitol Hill. In particular, the rules could not be changed suddenly on retirees; rule changes could not be used for significant, short-term savings. Stockman dismissed that as the bureaucracy's standard inertia. Like many political administrators, the budget director refused to believe that civil servants could help him by telling him things he did not want to hear.[76]

On May 11 the issue was brought to the president who, following his own inclinations, vetoed the coverage expansion as a tax increase and accepted the early retirement changes on the grounds that the existing provisions were one reason why "I've been warning since 1964 that Social Security was heading for bankruptcy." Martin Anderson praised Reagan's courage in choosing to "honestly and permanently fix Social Security." An enthusiastic Reagan signed off, then and there, on a package whose major component was an immediate, major retrenchment of the government's biggest program, changing the rules in midstream on millions. The Legislative Strategy Group was left to work out the plan's presentation and sale.[77]

The political aides, particularly Baker, Deaver, and Darman, were horrified. One recalls,


I heard about the Stockman and Schweiker proposal only on the Friday or Saturday before the decision. I asked how the Social Security package could be bipartisan just because you had one subcommittee chairman saying something should be done, but the train was a long way down the track by then….

[We] spoke to [the President] for a long time but I guess we decided that it had gone a long way—maybe we could surface it?

In retrospect I wish we had been more forceful. We got killed on it. We Republicans can't lead the charge because anything we do or say is interpreted as a reduction in benefits.

Right, particularly if it is a reduction in benefits. While the basic retirement age was sixty-five, people had been able to retire at age sixty-two with around 80 percent of their benefit. The Reagan plan would reduce that rate to roughly 50 percent and then gradually raise the proportion to 80 percent at sixty-three years, eight months. People would have to either delay retirement or retire on much less. If retirement at age sixty-five was the basic promise of the system, then the proposal violated no promise. Chiefly it caused the expected total payout to any recipient to remain virtually unchanged whatever the age of retirement, a sound principle of insurance practice. But for anyone who had planned to retire at age sixty-two, the proposal meant a major change. Along with other changes, it also promised to save between $82 billion and $110 billion over the next five budget years.[78]

The political aides, unable to protect the president from himself and Stockman in the morning, were determined to limit the damage when the Legislative Strategy Group met that afternoon. Baker and Darman insisted that the package was a Health and Human Services initiative. Schweiker, hearing the limb being sawed out from under him, tried to show that the political alignments were not so threatening. "This is a bipartisan initiative, bipartisan, " he insisted. "Damn it, I spent twenty years in Congress. I should know how things work."[79] Jim Baker had spent no years in Congress, but he had a pretty good idea. He ignored Schweiker's argument that, "if there's any doubt as to where the President stands, this'll be dead on arrival when it gets to the Hill."[80] Both Baker and Darman figured it would he dead, no matter what. Stockman argued the package was integral to Reagan's economic plan; Baker and Darman said it was deadly to Reagan's plan, and his popularity. So Baker, as chief of staff, ruled that the announcement would come from HHS in Schweiker's name.[81] Darman wanted the announcement to come from Social Security Administration headquarters in Baltimore (i.e., as far away as possible). The next day Schweiker had his press conference. Then the roof caved in.[82]

People anywhere near age sixty-two were furious. The reaction was


immediate—a deluge of cards and calls to Congress followed by a Republican retreat. Just to make the point clear to their leader, Senate Republicans on May 20 brought to the floor a resolution pledging to protect social security; it passed, 96 to 0. Rob Dole exclaimed, "They threw a life rope to Tip O'Neill."[83] Senator Moynihan imagined what Republicans were thinking: "My God, the Democrats have an issue here that will confirm every doubt anybody has ever had about us for the last fifty years—that we are going to tear up that social security card."[84]

How could Stockman, Schweiker, Reagan and company—sophisticated politicians all—have thought they could get away with this? Well, politics is the science of the inexact. The target was tempting (think of all one's problems solved with a single cut) and the uncertainties sufficiently stimulating (think of how Stockman learned bit by bit that the unfeasible was becoming feasible) to tempt even grown men. Presumably, if no one dared, nothing new ever would be done. Of course, one should remember also that one who dares too much may never get to do anything ever again.

Believers in budget balance could not afford to be amused. The feeling that "they ought to have known better" gives only a temporary feeling of superiority, a feeling that fades fast when the appropriate counterquestion is raised: How can the budget be balanced if its largest programs can never be cut?


Six Gramm-Latta 1

Preferred Citation: White, Joseph, and Aaron Wildavsky. The Deficit and the Public Interest: The Search for Responsible Budgeting in the 1980s. Berkeley New York:  University of California Press Russell Sage Foundation,  c1989 1989.