Power Game

by Hedrick Smith

  And different political styles: Kemp is new breed, Dole is old breed; Kemp is preeminently an outside politician, Dole is preeminently an inside politician. Within the Republican party, Kemp represents the New Right and Dole the old guard. Theirs is a generational difference, though age is not the key—Dole is in his mid-sixties and Kemp is in his early fifties—the key is the different images they project.

  Tall and handsome, Dole gracefully carries the scars of personal misfortune. During World War II, he was raked with machine-gun fire while leading an infantry charge on a German gun position. His right arm and shoulder were shattered, his neck was broken, and he lost a kidney. Some doctors feared he might not walk again or even survive, but he endured thirty-nine months in hospitals and a slew of operations. Even now, Dole plunges into crowds with his good left arm out shaking hands and his right arm held back, as if in a sling, and he has trouble buttoning shirts.

  Kemp, by contrast, has the aura of a golden boy, born with a silver spoon. He exudes star quality, the electric energy of a former Super Bowl pro-football quarterback for the Buffalo Bills and the San Diego Chargers. His blow-dried, brush-backed sandy hair evokes the all-American good looks of Jack Kennedy, and Kemp happily nurtures that subliminal linkage—with refrains about American renaissance, an echo of Kennedy’s 1960 campaign theme.

  But the main difference between Dole and Kemp—the one that afflicted Reagan’s coalition game in 1985—is ideological: Dole is an archetypical orthodox, budget-balancing Republican preoccupied with the deficit, and Kemp is the ardent apostle of the supply-side creed that derides traditional austerity and gives far higher priority to tax cutting and economic growth.

  As the Senate Republican leader, who worked his way up the committee system, Dole is a supremely talented inside politician. Trim and witty, Dole also has a natural flair for television, the outside politician’s medium. But he has taken seriously the less glamorous task of making government work and he has won respect from Democrats as well as Republicans. As Finance Committee chairman, charged with handling tax bills, he was taunted by Newt Gingrich, a firebrand Young Turk ally of Kemp, as the “tax collector for the welfare state.” In rebuttal, Dole ridiculed Kemp’s faction as a minority with the luxury of guerrilla tactics and airy theorizing but without the responsibility of governing. During a parade of prospective Republican candidates in Michigan in 1986, Dole took a jab at Kemp: “Some people deliver speeches. Some deliver votes. It’s the votes that count.”

  As a traditional, farm-belt Republican from Kansas, Dole was deeply concerned by deficits and felt that tough antideficit policies were realistic and responsible. He protected his farm constituents, but he was gutsy enough to propose unpopular measures such as an oil-import fee, or freezing pensions, and then face the objections head-on. On a swing through his Kansas farm country in 1985, I heard him defend a controversial one-year freeze in Social Security cost-of-living adjustments that most other politicians did not dare to tackle so directly.

  “It’s not because we’re out after senior citizens,” Dole told an audience at Fort Hays. “We froze everything: veterans’ pensions, civil service, the military, black lung, every federal pension program. It’s pretty hard to freeze the others if you don’t freeze them all. We also froze defense spending for a year. I understand Social Security is a very hot political issue. Some people in office won’t even mention it. I think we have to mention everything. You have to reconcile everybody’s problems.”

  Kemp is poles apart from Dole. What Dole proclaimed as realism on the deficits, Kemp attacked as wintry pessimism. He kept insisting that the old guard were “on the wrong side of the issue,” trying to make Republicans the party of austerity and gloom. Deficit politics, Kemp boomed, are “root-canal politics”—painful political dentistry, sure to alienate the voters and destined to perpetuate Republicans as the minority party.

  When Kemp first won his congressional seat from Buffalo in 1970, he ran as a traditional Republican, but to survive in a blue-collar, industrial, and largely Democratic district, he realized he had to change. “I realized there was no way I could get reelected as a balance-the-budget-at-all-costs Republican,” he told me, flying to a campaign outing in Pennsylvania. “The old approach of the Republican party, which was associated in the public mind with the country clubs and big business, was not going to win in Buffalo. I was looking for change. I had to survive. It was very pragmatic. I had to be more jobs-oriented because my district was interested in jobs.”38

  Ever since his political conversion to growth-oriented, free-enterprise economic advocacy, Kemp’s goal has been to broaden the reach of the Republican party with a new message. He does not fit political stereotypes. He is a self-proclaimed populist in the party of big business, a Republican partisan who deals with Democrats (Senator Bill Bradley of New Jersey and Congressman William Gray of Philadelphia), and an entrepreneur’s son who urges his party to go for blacks and blue-collar voters.

  In eighteen years in Congress, Kemp has become leader of the House Republican Conference, fourth in line. But he is no power broker, no legislator’s legislator. Critics call him a show horse, not a workhorse. Actually, Kemp has worked in recent years at crafting legislation and developing alliances in Congress. But at heart, Kemp, like Reagan, is a political salesman: a marketer of ideas and themes, ricocheting his influence off the media and the voters back into Congress. Kemp is intense and evangelical, words gushing out like a waterfall as he preaches a gospel of growth, patriotism, and optimism. In 1981, he had an important influence on policy, pushing Reagan to go for a major tax cut.

  In 1985, Kemp’s formula was to beat the deficit by growing out of it, and that meant putting tax reform ahead of budget cutting and not squeezing too hard on popular programs. “Tax reform has the potential of a realigning issue,” Kemp proclaimed, suggesting it could bring a tidal shift of blue-collar voters and others to the Republican party. Kemp urged Republicans to “stress the economics of growth rather than stability, the politics of hope rather than preservation.” That put Kemp at odds with Dole—and left White House coalition makers caught in the crossfire.

  Coalition in Search of a Leader

  President Reagan was tantalizing and elusive in his handling of the budget coalition in 1985—and that is ultimately why that coalition fell so far short. Reagan preferred rhetorical leadership to active leadership. His constant theme was the need to make war on the deficit. But when his own budget was set aside by Congress as unrealistic, Reagan blamed congressional procedure for the lack of progress. His cures for the budget morass were a constitutional amendment to balance the budget and presidential power to veto individual “line items” (programs) in the budget. But the main obstacles were not institutional; they were political. A real attack on the budget deficit required a bipartisan approach. Reagan could not get either Democratic or Republican leaders in Congress to agree with his formula for curbing the deficit; and he would not agree to theirs.

  For starters, Reagan left it to Bob Dole to forge a coalition—one that involved high political risks for Senate Republicans. Reagan gave Dole his blessing. But when Dole produced an impressive antideficit package, Reagan backtracked and sabotaged it, rather than using it as leverage for forging a grand coalition with Speaker Tip O’Neill.

  Dole filled the leadership vaccuum left by Reagan because he saw political danger for Republicans in Reagan’s economic program. He knew that while the public in 1985 credited Reagan and Republicans with producing economic recovery, Republicans would probably be saddled with blame for the deficits if the economy turned down—and there would be dire consequences for Republican control of the Senate in 1986. So Dole, who is a political gambler, a poker player who improvises as the cards are dealt, boldly staked his own fortunes on making deep cuts in the 1986 budget, hoping to reduce the risks of an economic downturn.

  Dole’s strategy was both courageous and risky. First, the task of taming the deficit was monumental, and he was going after $50 bill
ion in budget cuts—more than Reagan had gotten from Congress in 1981. Second, his strategy meant getting the president to accept restraint on defense spending and probably some tax increases, both of which Reagan opposed. Third, Dole had to risk the ire of millions of voters for he was convinced that the deficit could be curbed only with a one-year freeze on COL As for Social Security and various middle-class pension benefits. With Don Regan’s help, Dole got the president to swallow his package, even the unpleasant medicine on the Pentagon budget and Social Security.

  Dole’s performance in the Senate was a tour de force in coalition building. Any coalition needs the cement of a driving idea, and in the Senate—especially among Republicans—it was passionate concern about the deficit. On that base, Dole built a coalition Lyndon Johnson-style, horse-trading with various groups and ultimately with individual members, vote by vote. Conservatives recoiled at pinching the Pentagon, but they liked Dole’s entitlement freeze. Dole corralled moderates and farm-state senators by using big billions cut from the Pentagon to keep alive programs they wanted, such as Amtrak and the Small Business Administration, and by adding funds to other programs such as education, research, and programs for the handicapped. He wooed farm-state Republicans by plugging in modest funds for farm credits, farm exports, and rural electrification.

  Like Howard Baker, Dole used Senate rules to give him control of the climactic debate, and Democrats again yelled “Steamroller.” Dole’s tactical weapon was an “amendment tree”—a structure of Republican amendments that effectively blocked Democrats from changing Dole’s package. It granted wavering Republicans a chance—with Dole’s advance approval—of offering amendments to go on record as protecting their pet programs. But when that show was done, Dole wiped out their amendments and restored his package with one final amendment—one up-or-down vote, as in 1981. Then Dole pressured Republicans to toe the line; he called Vice President Bush home from Phoenix to be ready to break a tie. And he lined up Pete Wilson of California to come from the hospital after an emergency appendectomy.

  Dole’s high-wire act reached a climax in the wee hours of May 10. He got forty-eight Republican votes, plus Democrat Edward Zorinsky. Pete Wilson was rolled through the Senate’s double doors in a wheelchair, clad in hospital pajamas and a brown bathrobe. To standing cheers, he cast an aye vote. Bush broke the tie. At 1:48 A.M., the budget carried 50–49, including both a freeze on Pentagon spending and on Social Security COLAs.

  Senate Republicans were euphoric; their coalition had cut the budget deficit by $56 billion. Coming back from Europe, President Reagan proclaimed it a “victory for spending restraint and no tax increase.” Some might attack specific provisions of the Senate package, Reagan said, but he endorsed it—underlining “the importance of sending a signal, not only to the world but to our own business and financial communities, that we are determined to deal with [the] deficit problem.”

  But suddenly, the Republican coalition had a problem at its core: the President and Don Regan. A major White House push was needed to work the budget through the House, where neither Democrats nor Republicans liked Dole’s tough budget. Instead of taking charge, or striking a grand compromise with O’Neill, Reagan became a reluctant, passive leader. On Regan’s advice, he began zigzagging. They let go the partnership with Dole.

  Dole and Regan were not natural allies. In the first term, Regan as Treasury secretary and Dole as Finance Committee chairman had worked on tax bills together. They respected each other’s force and intelligence, but temperamentally, they mixed like oil and water. They were two strong-minded, outspoken personalities. During his sixteen years in the Senate, Dole had developed more of a sense of teamwork and of what was politically possible than Regan had. But neither one was disposed to take a back seat.

  “I think there’s a basic sense of distrust between Dole and Regan,” one well-placed Republican commented to me at the time. “The personal chemistry is bad. The Jim Baker–Howard Baker relationship was two guys who could sit down and figure out a compromise and how to get there. The Dole-Regan relationship is two guys who are stubborn and neither one wants to bend. So they keep hitting head-on.”

  Privately, Regan spoke with Irish bluntness of Dole as brilliant: “One of the sharpest minds in Washington,” he told me, “and one of the sharpest tongues. At times he can be acerbic. He can be impatient. At other times, he can be the most congenial person in the world. He gets mad—not mad, that’s the wrong word—he gets upset if the president doesn’t devote ninety percent of his time to the budget.”39

  Dole blew hot and cool publicly toward Regan. In private, some of his comments were unprintable. Dole became enraged by what he saw as Don Regan’s double cross on the budget.

  While the budget was bogged down in the House, Kemp moved to cut the White House away from Dole. Kemp and his faction had no enthusiasm for the Senate’s deep budget cuts. Moreover, Kemp had no interest in seeing Dole’s budget cutting succeed while his tax reform languished. Kemp hit Dole’s formula at its most vulnerable point: the freeze on Social Security COLAs.

  Secretly, Kemp and Trent Lott, the House Republican whip, met with Regan on June 27 to sink the Dole package. Their specific goal was to get Regan to have the president back off his support for a one-year freeze on Social Security COLAs and other entitlements. Without that freeze, the Dole budget package collapsed; about half its budget cuts were gone. Kemp and Lott told Regan that House Democrats would never accept the COLA freeze, and House Republicans were afraid to support it for fear of handing Democrats a 1986 campaign issue. It was an obvious point that Regan should have anticipated before backing the Senate Republican package. Now, belatedly, Regan flip-flopped. He agreed with Kemp and Lott—without telling Dole. The president took the same zigzag, secretly abandoning Dole and the Senate coalition.

  Reagan still got a chance to create a bipartisan coalition, picking up where Dole had left off, by striking a deal with Tip O’Neill. The issue came to a head on July 9, a sweltering, sticky afternoon, when Reagan met under the oak tree on the South Lawn with bipartisan leaders from both houses. The group sat around in armchairs on the lawn—some in shirt-sleeves, Reagan kept on his jacket. White House stewards passed iced tea and Coke. Tip O’Neill sat next to Reagan, and Dole was a couple of chairs away. Their talk was drowned out from time to time by airliners making the final approach to National Airport.

  The test issues at the oak-tree meeting were the Social Security freeze and whether to go for some kind of tax increase now being pushed by some Senate Republicans. O’Neill had recently made a gesture toward compromise, a willingness to increase taxes on Social Security benefits. But Reagan was haunted by the 1984 campaign, almost as if he had lost—not won—it. Democratic attacks had made him gun-shy on Social Security, and Kemp’s prodding nudged him to move away from freezing COLAs. And obviously Mondale had gotten under Reagan’s skin with his campaign declaration that he—Mondale—was honest enough to tell the country that beating the deficit required a tax increase and that Reagan would have to do it, too, but Reagan would not admit it. That hot July afternoon, Reagan lashed out at Mondale.

  “I answered Mondale,” Reagan declared. “When Mondale said what our country needs is a tax bill, I said, There’ll never be a tax bill as long as I’m president of the United States.’ ”40

  Then wheeling on O’Neill, he trumpeted: “Do you think I am ever going to have a tax bill? Never! Do you think I’m going to let Mondale say, ‘Look, I told you I was right?’ Never!”41

  On Social Security, there was confusion about precisely what Reagan said because a plane droned over at the critical moment. Reagan said he did not want to touch Social Security. Dole thought he heard Reagan add “assuming” House Democrats could come up “with some offsetting savings” elsewhere in the budget.42 But O’Neill, sitting next to Reagan, told me he had not heard any such qualifier and happily told reporters that the president “has taken Social Security off the table.”

  The president had dealt a
severe blow to the Republican coalition and to chances for big reduction in the deficit, though both Reagan and O’Neill professed interest in a modest cut. Senate Republicans erupted in fury, feeling betrayed. Warren Rudman protested that they had taken the risk of “kamikaze pilots only to be shot down by our own leader.” Dole remarked bitterly: “You know, we were left hanging out there. We marched up the hill and across the ravine, just right up to the cliff, and then they pushed us over.”43

  Still, so many senators were alarmed by the skyrocketing deficit that they gave Reagan another chance to form a bipartisan coalition. To make him feel less vulnerable to partisan attacks on taxes and Social Security, three Democrats joined three Republicans to devise a new Senate plan with major impact—to trim deficits over three years by $300 billion. It had everything—cuts in social programs, a one-year freeze on defense and Social Security, and $59 billion in new revenues. No taxes were specified, but the idea was to delay the tax-indexing plan adopted in 1981—putting off a tax reduction rather than raising tax rates, to meet Reagan’s objections to a tax increase. But when they put their package to Reagan in late July, the president was so angered that he slammed his glasses on the table.44

  Dole and Budget Chairman Domenici tried one final tack: a five-dollar-per-barrel fee on oil imports, thinking that was not literally a tax. Dole, Domenici, and Paul Laxalt were leaving Dole’s office to seek a House-Senate compromise with Tip O’Neill on July 29, when the phone rang. It was President Reagan: thumbs down on the import tax. Dole went to see O’Neill anyway, thinking a bipartisan deal would be irresistible to Reagan. But he did not reckon on how far the White House would go in slapping him down.

  As Dole, Domenici, and Laxalt were talking with O’Neill, White House spokesman Larry Speakes went before TV cameras at 9:28 A.M. to disclose Reagan’s phone call to Dole. Reading a statement, Speakes emphasized that Reagan would “not support a tax increase in the form of an oil-import fee … a change in Social Security COLAs … [or] a change in tax indexing.” Chris Matthews, the speaker’s press aide, took a news bulletin to O’Neill. The speaker read it and handed the paper to Dole.