Musical Chairs

In spite of the incentives to fudge, Congress still had to find some serious deficit reductions—just to match those of Stockman. The centrist budgeters wanted to zap everybody—an equitable "three-legged stool" (social spending, defense, taxes) of deficit reduction. A general deficit-cutting mood may allow politicians to assemble a vast number of small changes that otherwise no one would trouble to put together. Recipients might accept small cuts on the grounds they could be recovered later. In 1982, however, the deficits looked so big and cuts in 1980–1981 had been large enough that any useful cuts on the deficit were sure to be resisted. Thus, everyone would oppose a broad package that hurt everyone.

Budgeters who hoped the public interest in deficit reduction would overcome interests in specific government activities, or in the private activities lost to a tax increase, faced two fundamental difficulties. First, people value what they have more than what they might have. They will object far more strenuously to giving up their benefits than the value of those benefits might suggest.^[15] Second, the pain of deficit reductions would be obvious and immediate; the supposed benefits were indirect, slower, and dubious. For both reasons, any group that contributed its fair share to deficit reduction would feel it was contributing too much and resist.

Synoptic rationality—one mind imposing order on a system—might yield a pattern of shared sacrifice. Political rationality, a process of groups bargaining and struggling, was more likely to resemble a game of musical chairs, in which the slowest (weakest) player was left standing. That was what Representative Corman had predicted in 1980, what largely occurred in 1981, and what the Democrats feared would continue: the poor, particularly the working poor, would be least able to save their place in the budget.

But politics is not just every man for himself. No one imposes order, but players do watch, help, and hinder each other. A group's success depends not only on its own resources but also on how others see it, in short, on its enemies. Therefore, Stockman's distinction between weak claims and weak clients is inadequate. If a claim is seen as questionable, opposition to the claim can render its supporters relatively weak (as befell dairymen in 1981). The elderly were strong not only because of their own resources but because they had few enemies; almost nobody opposed their social security claim.

Now, if any claim were really opposed by majorities, it probably would not be there. A program of interest only to a minority is not opposed by everybody else; the majority generally just does not care. Farmers

want farm programs; city dwellers do not object so long as they are getting something they want, say, housing or mass transit subsidies. People object not to other people getting benefits but to somebody getting too much. The normal practice of incremental budgeting, a kind of rolling agreement on resource allocations, marginally altered each year, creates notions of "fair shares." Participants are most concerned with their own shares; they will care about others' shares only if they seem to be getting out of line.

The Reaganauts justified their policies to other players by arguing that defense had fallen below its historic share and most domestic programs had risen above it. Many 1981 cuts were in programs—housing, nutrition, CETA—that had grown recently. Their share had not been ratified as normal through the passage of time. The very process of rearranging in 1981 (and 1980) created a new history. Domestic spending that survived was more obviously accepted. At the same time a new set of beneficiaries—corporations and the military—had done extraordinarily well. Nobody is entirely neutral; everybody has something to which he is committed. Politicians of the center looked for ways to reduce the deficit; meanwhile, the norms of fair shares, which inhibited taking from last year's victims, favored taking from those who had just done well. Moderate Republicans like Dole and Baker felt the working poor had paid enough; even Robert Michel was telling the administration to slow its defense increase.

These Republican budgeters' notions of fair shares, liberal Democrats' ideology, and the tax experts' disgust with the 1981 auction combined to place corporate taxes high on the deficit reduction menu. Defense also could not do as well as the president wished, but there was still broad support for a substantial increase.

Despite the recession, the rejection of social spending stimulus and fear of budget deficits that we saw under Jimmy Carter had been intensified by huge deficit projections. Even the AFL-CIO executive board, at its annual meeting in February, called only for maintaining social programs at existing levels. Labor had long supported defense spending; but the Reagan budgets forced unions to ask if they were willing to build up defense at the expense of social spending. The answer was "no."^[16]

Business interests, as an alternative target, asked how much it was worth to build up defense at the expense of a higher deficit. A wide variety of business representatives, including the National Association of Manufacturers, the Chamber of Commerce, and the Business Roundtable, felt that the military buildup was too rapid in two ways: too expensive and too fast for the defense industry to be capable of supplying new weapons at the rate demanded. Paul Thayer of LTV Corporation,

David Packard of Hewlett-Packard, and Reginald Jones of General Electric were among the leaders of major defense contractors who believed the defense increase could be slowed.^[17]

Even if the president's budget were not acceptable, assembling a majority in Congress would still be difficult. At one end were those who wanted to reduce the deficit solely through defense and tax changes, maybe even adding some social spending for sectors of the economy in bad shape (for example, housing). At the other end were those who wanted to reduce the deficit through smaller tax and defense changes and larger social cuts, particularly in universal entitlements. Speaker O'Neill led the defenders of social spending; Senator Domenici led supporters of larger deficit reduction.