When he was commenting more privately, around the office to staffers, Tip was forced to acknowledge the political muscle Reagan was displaying—and not just domestically. A massive contributor to both parties, Dwayne Andreas, the CEO of Illinois-based Archer Daniels Midland, was an influential international agribusiness figure to whom every senior politician paid attention. With multimillion-dollar deals that took him frequently to Moscow, he enjoyed regular contact with highly placed officials there. That summer, returning from the Soviet Union, he reported to Tip that the Soviet top brass had shared with him their healthy respect for the new president. The Russians, he said, credited Reagan, in contrast to his predecessors, with the strength of will to qualify him as a true leader.
• • •
As invincible as Reagan seemed that August, there were also trouble signs, certainly the kind a seasoned political watcher might have spotted. David Stockman, his budget director, had informed him he needed perhaps a half trillion dollars in additional spending cuts over the next years if he didn’t want to see the federal deficit balloon further. “If these numbers were out,” Reagan retorted, “Tip O’Neill would be wearing a halo.” By the time he got to his diary to record his thoughts, though, the president sounded more upbeat. “We have our work cut out for us. Our goal of balancing the budget by ’84 is doubtful. I’m still optimistic that we do it.”
Whatever the numbers seemed to call for, there was one program Reagan no longer had any intention of messing with: Social Security. The White House remembered the politically scarring push to cut early retirement benefits back in May. The House of Representatives had just voted overwhelmingly to restore the minimum $122 payment, another Social Security issue that had shown itself to be potential political poison. At the same time, the Speaker continued to bear down on Democratic colleagues who’d shown any inclination to pose further threats to America’s millions of beneficiaries.
This included those who, with the best of intentions, foresaw future problems with the system if it wasn’t fixed. When Texan Jake Pickle, the Democratic chair of the Social Security subcommittee, began work on a reform measure, Tip simply moved to stop him in his tracks. To accomplish this maneuver, he called on Missouri Democrat Dick Bolling, a loyalist and chairman of the Rules Committee, which controlled when and how legislation got to the House floor. “Jake, we are all proud of your work,” Bolling told Pickle, “but I want to say one thing. As long as I am chairman of the Rules Committee there won’t be any Social Security legislation in this Congress.” The decree had come directly from Tip O’Neill himself.
Reagan, never a slow learner, was now prepared to keep his hands, too, off the country’s most cherished program. “I’m withdrawing Soc. Security from consideration & challenging Tip & the Dems.,” Reagan wrote in his diary on September 23, “to join in a bipartisan effort to solve the fiscal dilemma of S.S. without all the politics they’ve been playing.” With the 1982 midterm election season soon kicking into gear, Reagan, intending to neutralize the issue, announced the creation of a Social Security commission the purpose of which would be to address the system’s financial health. There would be fifteen members: five chosen by the president, five by the Speaker, and five by the Senate majority leader, Howard Baker. It seemed the very essence of a Washington solution, this burying of an issue in another layer of bureaucracy, even if a bipartisan one at that.
But the truth for Reagan in this case was that he’d pretty much handed the issue over to the opposition. He could see no way to reclaim it to his advantage. If the failed May proposal to penalize early retirees and the June vote to eliminate the minimum Social Security benefit weren’t enough, Reagan’s own history of pushing to make the system “voluntary” in the 1960s had left a trail of cookie crumbs for the hungry Democrats, who’d have no trouble following it all the way to the Oval Office.
Suddenly came a tragedy—and all such horrific events arrive with no warning—that shocked the country: the assassination of Egyptian president Anwar Sadat. Two days after the PATCO strike was called, President Reagan had welcomed the Egyptian leader to the White House for what he saw as highly successful meetings. “I’m encouraged that between us maybe we can do something about peace in the middle east,” Reagan jotted down the night before Sadat’s departure.
The deadly attack took place as Sadat was reviewing a Cairo military parade that annually celebrated the Egyptian army’s crossing of the Suez Canal during the 1973 Israeli war. The assassin was an Islamic extremist serving in the Egyptian military. “It’s hard to describe the shock & sorrow . . . ,” Reagan wrote in his diary that night. “Even though their visit was short we discovered we had a deep feeling of friendship for them. Maybe it has to do with a state visit. You start out with knowledge of each other & immediately get into the problems you mutually want to solve.”
The afternoon the world learned of the assassination, I went with the Speaker to the National Cathedral. There we honored, in a hastily scheduled prayer service, the Egyptian leader who’d made peace with Israel, now slain on account of that extraordinary act. I remember well the Call to Prayer echoing through the Gothic nave of the mighty sanctuary. In the aftermath of Sadat’s death at the hands of a fundamentalist fanatic, to be sitting there amid the Christian prayers gave me a great deal to think about.
For four years, I’d served Jimmy Carter, the man who in 1978 at Camp David had brokered the historic deal between Sadat and Menachem Begin, Israel’s hard-nosed prime minister. Now I was working for Tip O’Neill, an Irish-American Catholic, mourning a Muslim who’d made the ultimate sacrifice as a result of what he’d dared to do. The mood in the cathedral seemed to me to embody a commitment to interreligious affection I could not have previously imagined. It was a moment when I have to say I experienced a feeling of being with my new boss in just the right place.
• • •
In the fall of 1981, after a spring and summer in which Republicans had dominated Washington with their promise of blue skies, the country’s barometer dropped. The political weather was about to change. The Democrats hadn’t lost just the presidency but also, effectively, control of Congress, and the ripple effect of that was making itself felt. Pounded by high interest rates, the tight-money economy began to slip downward. Whatever it was the Democrats were doing—shaking themselves off after a bad season of defeat and beginning to worry about the next year’s election—they weren’t quite prepared to see Tip O’Neill as their savior.
But anyone paying attention knew of the Speaker’s conviction that there’d have to come a reckoning, sooner or later. Given the swift passage of Reagan’s custom-built economic program on Capitol Hill, the president would have to shoulder a portion of blame for its alarming aftermath. “We haven’t obstructed,” Tip explained. “I think we fought a good fight as far as the Reagan people are concerned. We stuck to our timetable. We passed the largest tax bill and budget bill in history. It’s the president’s now. The ball is in his court—the deficits, the interest rates and unemployment.” He didn’t need to say any more; he’d made his point.
As the days passed and the warmth of the Republicans’ triumphant summer continued to fade in the chillier fall political climate, there continued to be no good news regarding the economy. Watching closely and feeling a certain satisfaction even as he lamented the increasingly difficult reality for his fellow citizens, the Speaker simply kept pressing his case. For example, the rising jobless rate: it certainly, he pointed out, could be laid at the administration’s door. “They got their cuts and said that America would be happy and go forward with a strong economy. It looks like a house of cards. . . . We understand that one million more people have been laid off. The pie-in-the-sky projections seem to be tumbling.”
With the president’s economic plan fixed in his sights, O’Neill zeroed in even more closely on a crucial notion: accountability. If Ronald Reagan had convinced the electorate that his fiscal agenda would be to their benefit, then it was the president’s duty to stan
d up and defend its effect when it wasn’t. “As an American, I hope it works,” Tip told the press. “After all, it is his baby now. . . . He would like to say it was left over for him, but the American people truly believe we have given him what he wants.”
Look what they get for it, he kept insisting. Take a family making $20,000 a year and due a weekly tax cut amounting to the princely sum of $2.34. In return, he said, they could easily find that their kids’ student loans had been cut, or maybe now they’d be billed more for school lunches, while, by necessity, state and local governments would be making up the difference for a wide variety of services by raising these already strapped families’ property taxes.
As mid-October arrived, Reagan made news by admitting publicly that the country could be considered in a “slight recession.” Days later, he was back in the headlines with a different, equally embarrassing confession: the balanced budget he’d promised to have in place by 1984 wasn’t going to happen. “Not probable” was how Treasury Secretary Donald Regan chose to describe the chances of achieving it, but the word choice fooled no one. The man who’d been swept into the White House a year earlier by a landslide majority was paying the price of his rousing legislative success. The veteran critic of government decision-making was now obliged to be its defender.
Timing is everything, as Tip liked to say. As the economy began its autumn slide, the public needed to assign blame. Had the Democrats spent the summer months pushing back on the Reagan agenda, they’d be taking the heat for the current bad news. Kirk O’Donnell, who’d been the one pushing the Speaker to keep the trains moving during the spring and summer, now felt confirmed in the strategy he’d counseled.
With the turnabout occurring, the Speaker seemed suddenly to have more spring to his step. In politics there’s a large divide between losing and being defeated, and now, it seemed to me, Tip was living the difference. Once it began to appear that President Reagan was wrong, it stood to reason that the man who’d been his chief critic, and mocked for it, would look right to have opposed him.
In November, Tip gave a speech to the alumni of the Fordham University Graduate School of Business, during which he shared one of his favorite stories:
Jakie Bloom was a good man, a poor but generous shopkeeper who allowed all his customers to buy on credit during the Depression. But now Jakie’s in his seventies, and he’s despondent because his dear wife has passed away. His friends take up a collection to help him out, and Jakie Bloom is gradually able to put his life back together. Over the next few months he becomes a new man. First he gets a hair transplant. Then he loses some weight and buys some fancy clothes.
Next, Jakie grows a beard, starts working out every day, and moves down to Miami. Soon he takes up with a beautiful lady half his age.
They walk along the beach, he with his new look and she in her red bikini. Suddenly there’s a tremendous storm, and Jakie is struck by lightning. A moment later he finds himself in heaven, where he demands to speak to the Boss.
“This isn’t fair,” he cries. “All I ever did was good, and now, in the twilight of my life, I’m finally having a little fun. How could you do this to me?”
“Jakie!” says the Lord. “I didn’t recognize you.”
Tip told that story for a reason. Its purpose was to spotlight the dangers of changing who you are. By late autumn of 1981, with a string of difficult, discouraging months behind him, he believed he’d weathered the worst. Most important, he’d managed it by sticking to the set of beliefs he’d held his entire political career. The self-description that he was a “big-spending liberal” satisfied him. Government, he had no doubt, should be there offering a hand whenever needed. Inseparable from this basic idea of such federal responsibilities was his conviction that they were best paid for by levying taxes on those who could well afford them.
With Tip O’Neill, there was no such thing as lip service, and he resisted any hollow rhetoric. He knew who he was and what he believed, and he had no need to fake it, ever. Crowd-pleasing for its own sake wasn’t a practice he had any use for, a stance rare for such an old-school pol. Once I drafted a statement for his daily press conference that took a hit at Reagan for increasing the deficit. “That’s not me,” Tip said, rejecting it. An admitted “big spender” for good causes like health and education, he refused to strike a pose with his grip tight on the federal purse strings.
• • •
In November, with the whole world watching, Ronald Reagan took a pie in the face at embarrassingly close range, thrown from inside his administration. The latest issue of the Atlantic brought an interview with his budget director titled “The Education of David Stockman.” In it the thirty-five-year-old former Michigan congressman revealed to writer William Greider what he described as the two deep secrets of Reagan economic policy. First, he explained, the current spending and tax policies didn’t—and couldn’t—add up to balanced budgets. The only way the deficit was ever going to be eliminated under Reagan, according to Stockman, would owe more to what one skeptical senator dubbed a “magic asterisk” than any honest math. The asterisk was Stockman’s audacious bookkeeping notation indicating deficits to be shrunk by spending cuts not yet identified.
The budget director’s other headline-making disclosure was virtually a gift, wrapped and ribboned, for Tip O’Neill. Over the past months, Reagan had said his tax cuts were intended to benefit Mr. and Mrs. Hardworking American, denying every inch of the way that they’d been designed to help the rich. Yet, according to his budget director, the actual goal of the Reagan plan was to cut the 70 percent bracket, the one at the top. The middle-income tax cuts were—in the words of David Stockman, there in black-and-white in the Atlantic—window dressing, included in the president’s program only “in order to make this palatable as a political matter.” The whole exercise, Stockman revealed, was a “Trojan horse” to bring down the top rate. He even unmasked Reagan’s “supply side” economics as the same old “trickle down” policy favored by Republicans, just with a new name.
Reagan’s shock at such disloyalty comprised a mix of disbelief, confusion, and anger. “If true,” he wrote in his diary, “Dave is a turn coat—but in reality he was victimized by what he’d always thought was a good friend.” So, what did the president mean by that? He seemed to be proposing that Stockman had shared his personal take on the Reagan cuts, and the economic agenda to which they belonged, with his journalist pal Greider, not realizing they’d be printed. Yet the revelations Stockman made and the misgivings he’d expressed obviously had their basis in his budget director’s very real concerns. Didn’t it bother Ronald Reagan that his top fiscal architect was worried that the structure he’d overseen seemed wobbly? Whether it did or not, though, wasn’t what mattered at this all-hell-breaking-loose moment: inside the White House the decision made by the president’s counselors was not to panic but to spin.
Up until now the story had been one of revelation. Thanks to Stockman’s whistle-blowing, Americans suddenly had a chance to peer at the inner workings of the Reagan economic operation. What they saw was a jerry-rigged mechanism built on principles of economic elitism and powered by manipulative bookkeeping. Troubling as this was, fixing it, or even promising to do so, wasn’t in the White House script. Instead, Jim Baker and his colleagues now quickly prepared a scenario intended to shift the media’s attention by offering what they tried to package as an even more devastating angle—betrayal from within. The Reagan team was pinning their hopes on being able to change the story from the bombshell Stockman had dropped to the spectacle of a treacherous young budget director who’d self-servingly put himself above the president. They were behaving like the Great Wizard of Oz when he attempted to again hide his gears and levers.
But the damage had been done.
As an exercise in spin, what now took place followed what I’ve discovered is the basic two-step familiar to any veteran news watcher. First, you admit you have a problem. Next, taking advantage of those precious moments when
you’ve won the public’s trust by coming clean, you then go all out with your preferred notion of what precisely the problem is. In this case, the White House team decided to make use of an old-fashioned but still familiar metaphor. After all, David Stockman wasn’t very old given the critical job he held, and given the fact that he’d grown up on a farm, the White House now scheduled him to be “taken to the woodshed.” In other words, he was expected to present himself at an officially arranged sit-down with the president of the United States, where he’d be dealt with severely and the appropriate punishment would be administered.
“You’re going to have lunch with the president,” Jim Baker told him. “The menu is humble pie. You’re going to eat every last motherfucking spoonful of it. You’re going to be the most contrite sonofabitch this world has ever seen. When you go through that Oval Office door, I want to see that sorry ass of yours dragging on the carpet.” Stockman was now not just a turncoat but a scapegoat, with little choice regarding the new role he’d been assigned.
Tip O’Neill naturally saw right through the White House ploy. The issue for him wasn’t that Stockman had talked out of school to a journalist but whether he’d believed what he’d told him. And if he didn’t, then what had been the point of the whole exercise? Since the Reagan economic program had seemed dubious to Tip from the beginning, he was perfectly able to accept what he’d read in the Atlantic as the plain truth straight from the horse’s mouth. Besides which, having known Stockman as a colleague during the two terms he’d served in the House before joining the Reagan administration, the Speaker thought of him not just as hardworking but also as straight-shooting.
Tip and the Gipper: When Politics Worked Page 16