Power Game

by Hedrick Smith

  Baker and Darman used one well-tested power-game ploy to lure back some rebels: Lott and Cheney wanted no compromise, but Michel, like other Republicans, was stunned to see Reagan humiliated, and wanted to help him. So did Kemp, who needed tax reform kept alive as the banner for his presidential bid. But Kemp and Michel required some fig leaf to justify Republicans’ switching back to Reagan’s side. The ploy used by Baker and Darman had worked well on other tough votes, such as the AW ACS sale to Saudi Arabia in 1981 and various contra- aid votes. With Kemp, they crafted a letter containing pledges from Reagan to placate House Republicans. If they would let Rostenkowski’s plan pass, Reagan pledged to pressure the Senate for a better version. He promised to veto any bill with an individual tax rate over thirty-five percent and lacking a $2,000 personal exemption (a Kemp proviso), and he made some nice-sounding but spongy promises about protecting incentives for capital-intensive industries. In congressional lingo, that provided “cover” for vote switchers.

  But the key to reviving the tax-reform coalition was to change the issue—from the contents of the tax bill to saving the president. Not only was Reagan immensely popular with Republicans, but they were counting on him to help them in the 1986 elections. It was stupid for them to mortally wound him now, and the White House played that theme hard.

  Reagan himself was the trump card. In a week of relentless lobbying, the final move was Reagan’s journey to Capitol Hill to plead for support. It was a big gamble. Failure to produce the fifty votes O’Neill demanded would have permanently disabled Reagan. But he had no choice; he was already wounded. Except for Kemp, the House leaders did not really want Reagan at their conference, because that trapped them between loyalties to their president and to their own troops. But the White House insisted, knowing Reagan’s emotional pull on other Republicans. They also knew it was vital symbolically for the president to make a pilgrimage to his members. That gesture helped salve the wounds of neglect.

  The fifty-minute session in the Rayburn Office Building crackled with tension. Reagan said little. He made no opening speech—to avoid any appearance of lecturing. Mostly, he listened as House members vented their spleen at Rostenkowski’s bill and at being cut out of the bargaining, and he promised to “keep in better touch in the future than we have in the past.” He admitted disliking parts of Rostenkowski’s bill, but he pointed out that killing it would “doom our efforts.” And if the Senate did not make improvements, he promised to use his veto.

  On the spot, Kemp broke with the rebellion and announced he would “vote for the bill to keep the process going.” After the session, a secret poll showed forty-seven votes with Reagan. By that night, Reagan’s men had found their fifty votes.

  Events unfolded with surprising swiftness the next day. Seventy Republicans voted for the rule to bring up the tax bill; defeated just six days before, the rule now passed by a large margin, 256–171. That cleared the logjam for consideration of the tax bill, and it passed by voice vote without any debate in a moment of total Republican confusion. After the routine voice vote, the normal procedure was for Republicans to demand a roll-call vote. But the Republican leadership was so disorganized after the rule vote, no one made a move. Before Republicans knew what happened, the action was all over. The next day, Republican backbenchers accused their leaders of conspiring to avoid a roll-call vote. Michel denied it, insisting he had voted for the rule to help the president but had wanted a chance to speak and vote against the tax bill because it hurt his district.

  Kemp was the target of heavy fire. He had gotten caught in a squeeze—between his dream of using tax reform to bring about political realignment for the Republican party and his leadership position among House Republicans opposed to the Rostenkowski bill. Kemp got squeezed between the inside game of influence in Washington and the outside game of running for the presidency, with tax reform as his banner.

  For days, Kemp’s own Young Turks (Vin Weber and Newt Gingrich) charged him with betrayal, and with greater interest in his presidential ambitions than in his role as a House leader. They charged him with having violated the Republican Conference instructions ordering the party’s leaders to do all in their power to defeat the bill. Kemp parried, saying he had met that obligation by voting against the first rule, and then by getting Reagan’s promise to veto an unsatisfactory tax-reform bill.

  “We have to decide whether we’re going to be a business party or a people’s party, whether we’re going to be a party of tax breaks for corporate America or whether we’re going to be a party that is aimed at all the people,” Kemp replied to his Republican critics. Much later, he told me: “That was a key moment in the history of our party. Tax reform has never been popular in the Republican party and I see it as a big issue, a realignment issue.”50

  In fact, Reagan had barely won a patched-up victory in the House. This was not the stuff of realignment. The Republican rebellion and Reagan’s obvious dependence on Democratic support, on Rostenkowski and O’Neill personally, had undercut claims that tax reform was a Republican-created boon to the middle class.

  For coalition building, the long-term lesson was that the original base must be protected, in this case a bipartisan base. Knowing the risk of losing hard-line probusiness and supply-side Republicans, Reagan’s team should have been doing more to stroke and satisfy Republican moderates earlier in the game. But Rostenkowski made it tough, because he insisted on Reagan’s noninterference and because his idea of the coalition game was actually creating two separate partisan coalitions: his on the Democratic side and Reagan’s on the Republican side. The problem was that Rostenkowski’s way of winning Democrats made it harder for the White House and Treasury to hold many Republicans. Rosty did not appeal to some higher good to rally both sides; in only a few cases did he really draw Republicans into the process, and provisions used to gain Democratic support went down hardest with most Republicans, especially Reagan’s partisans.

  A Genuine Bipartisan Core

  The real genius in forging a more genuine bipartisan coalition for tax reform turned out to be Bob Packwood, the maverick moderate Republican who became Finance Committee chairman in late 1984. More than any committee member except for Democrat Bill Bradley, Packwood mastered the substance of the tax bill. But for several weeks, he lost control of the bill in his committee, and neither President Reagan nor Jim Baker could rescue him. Various special business interests had gotten senators to add one provision after another to protect them; the bill had lost its reform flavor and its appeal. Don Regan told me that by mid-April 1986, the White House regarded the tax-reform bill as dead in the Finance Committee because special interests had overwhelmed Packwood.

  Alarmed by his predicament, Packwood suddenly reversed field. Although business interests kept pretty much of what they had already gained, Packwood outflanked his committee by reaching for a more daring reform on individual tax rates than either Reagan or Rostenkowski had attempted. He chose one central concept to overcome special interests, excite popular support, and revive the notion of reform; it was precisely the kind of bold maneuver needed to pull together a coalition, for any successful coalition requires a single, fairly simple driving idea to attract support from a variety of factions: In 1981, Reagan’s budget bill rode on the idea of cutting government; his 1981 tax bill rode on the idea of cutting taxes; Dole’s 1985 budget bill rode on cutting the deficit; Reagan’s tax bill, on cutting top individual tax rates and making business pay; and Rostenkowski’s tax bill, on cutting middle-class tax rates and making the rich pay.

  Packwood electrified Congress by going Reagan and Rostenkowski one better. He proposed to cut the top individual tax rate from fifty percent—not just to thirty-five percent as Reagan had proposed, but to twenty-five percent. He would finance that rate by raising $50 billion over five years through shutting down tax dodges for the rich and by raising another $150 billion over five years by ending the special capital gains tax rate, another boon to well-heeled investors. This was the stuff for
a very broad coalition, for it appealed to both political extremes. The basic concept was so stunning that it attracted right-wing conservatives as well as liberals and moderates. The liberals had long wanted tax loopholes closed and conservatives liked driving the tax rates way down to twenty-five percent. After some initial press scoffing, Packwood’s plan—borrowing heavily from the earlier Democratic bill of Bill Bradley and Dick Gephardt—had a magnetic effect on Congress.

  In putting together his coalition, Packwood was ingenious enough to form a bipartisan core group with Democrats such as Bill Bradley, Daniel Patrick Moynihan of New York, and George Mitchell of Maine; moderate Republicans such as himself, John Chafee of Rhode Island, and Jack Danforth of Missouri; and a right-wing conservative such as Malcolm Wallop of Wyoming. As Moynihan told me, it was the millionaires—Chafee, Danforth, and Bradley—who were most fed up with the old tax loopholes. With a bipartisan core at the outset, Packwood avoided the kind of partisan revolt that took place in the House.

  As it turned out, the tax books would not balance unless the top individual tax rate was taken up eventually to twenty-eight percent (with a hidden thirty-three-percent rate added later). Each rise caused some hesitation. But the sudden promise of bringing the top rate below thirty percent captured the popular imagination and generated unbeatable momentum in the Senate—the same coalition ingredients that had worked for Reagan in 1981. Packwood deftly worked the “soup kitchen” to dole out favors to gain more votes, one by one, and suddenly there was a bandwagon effect. His bill got unanimous approval from the Finance Committee; it sailed through the Senate. And after some long bargaining with Rostenkowski, a modified Packwood plan got passed by Congress.

  In this final legislative round in 1986, President Reagan was not a central player—certainly not the coalition leader. He was mostly at the sidelines, encouraging Packwood and working near the end to make sure the House Republicans did not upset things. Actually, it is not surprising that a moderate Republican such as Packwood, rather than Reagan, had taken the lead. Grand coalition politics come more naturally to a moderate, centrist Republican such as Packwood than to Dole, a more partisan Republican, or to Reagan, an ideological conservative. A centrist such as Packwood lives by compromise, throwing his weight first to one flank and then the other. In this case, Packwood pulled the two flanks to the center. Reagan was very lucky, for his own strategists did not know how to rescue the tax bill. Packwood not only brought it back to life but redeemed Reagan’s promises to the House Republicans.

  What Packwood demonstrated, as Reagan himself had done in 1981 with his budget and tax cutting, was that the vision of a simple idea—in this case a dramatic cut in personal tax rates—was enough to overcome the opposition of special interests. To make the tax coalition work, it took that vision, some masterful committee bargaining by Rostenkowski as well as by Packwood, plus the tenacity and flexibility of Jim Baker and Dick Darman in improvising the politics of the bipartisan coalition, and Reagan’s tenacity. Whatever the issue, any future president will need these same basic ingredients to pull together a governing coalition across party lines—as our system so often requires.

  14. The Opposition Game: Fighting, Swapping, and Remodeling

  I had to be tough. I had to be what they call bitterly partisan.

  —Speaker Thomas P O’Neill, Jr

  In the pantheon of twentieth-century Democratic politicians, Sam Rayburn stands for many as the model speaker of the House. Rayburn helped Franklin Delano Roosevelt in 1941 extend the prewar draft and enact many wartime measures. Rayburn helped Dwight Eisenhower in 1955 pass the Formosa Resolution, formally throwing American protection over the Chinese National Government on Formosa. Rayburn gave young jack Kennedy a vital hand in 1961 in curbing the power of the House Rules Committee, the obstructionist bastion of conservatives. During forty-nine years in the House starting in 1913, Rayburn came to symbolize authority and cohesion. Rayburn, son of a Confederate cavalryman from Flag Springs, Texas, was physically intimidating: stocky and bull-like, with a strong, bald skull, penetrating eyes, and a barrel chest. He was known for a bristling temper, scolding younger members or punishing them like a schoolmaster. To his troops, he seemed stern, remote, imposing, powerful.

  But the Rayburn legend is a bit misleading, for with presidents and other major power brokers, Rayburn was more accommodating than his wary scowl suggested. When Rayburn became speaker in 1938, Franklin Roosevelt was worried that Rayburn was too cautious by nature and delivered him a patronizing pep talk, lecturing Rayburn that “it is better to go down fighting than it is to accept defeat without fighting.”1 Over the years, senior committee chairmen sometimes defied Rayburn; he repeatedly shied away from dramatic confrontations with the Rules Committee, often acquiescing when it killed bills that he or the president wanted. And Rayburn worked at collaboration with the White House, no matter which party was in charge.

  During the presidency of Dwight Eisenhower, Speaker Rayburn and his fellow Texan, Senate Majority Leader Lyndon Johnson, became renowned for cooperation with the Republican administration. They profited by the appearance of collaboration with the popular Eisenhower, who was a national hero and mostly a nonideological, nonpartisan president. As my colleague John Finney of The New York Times recalled, Johnson was fond of pulling from his pocket a card with a list of legislative achievements and bragging, “Look what I’ve gotten done for Ike.”2

  As leaders of the opposition, Rayburn and Johnson practiced bipartisanship—with a definite partisan twist. Unlike the Opposition leader in the British Parliament, who leads a minority, Rayburn and Johnson had real power; they led majorities in both houses. They knew Eisenhower needed them. They would go to the president’s living quarters in the White House every few weeks and, in Johnson’s homey image, “sip bourbon and branch water with Ike.” The president told them what he wanted, and they would tell him the most he could expect from Congress. Basic deals were struck. Back on Capitol Hill, Rayburn and Johnson would shunt aside Democratic alternatives to Ike’s pet legislation. Their tactic was to take White House bills (a massive highway act, a civil rights bill), leave the Republican label on them, and then remodel the contents to give them Democratic flavor. That was their way of playing the opposition game: cooperating and remodeling. Seen from the partisan 1980s, that was a halcyon period of bipartisanship.

  Whenever a party loses the White House but controls one or both houses of Congress, its congressional leaders have a choice of opposition game. They can go for Rayburn-Johnson-style collaboration with the White House, or they can take on the president in head-on confrontation. After Richard Nixon’s election in 1968, for example, House Democrats under Speaker John McCormack fought Nixon tooth and nail on domestic spending. Nixon’s defiant stand that he did not have to spend all the funds that Congress voted for social programs left McCormack and company little choice but to fight to protect the institutional powers of Congress. The showdowns over federal spending grew so heated that Congress finally passed the Budget and Impoundment Act of 1974 to force future presidents to abide by congressional appropriations.

  Changing the Role of Speaker

  When Ronald Reagan took over the presidency in 1981, Speaker Tip O’Neill had a choice of strategy, and his decision assumed even greater importance for the Democratic party than Rayburn’s role under Eisenhower. For in Eisenhower’s day, there had been Democratic leaders in both houses to share national party leadership. But in 1981, with the Republicans controlling the Senate, O’Neill stood alone as the nation’s top-ranking Democrat, second in line of succession after the vice president.

  O’Neill was suddenly thrust into performing as the voice of opposition, as spokesman as well as strategist for the Democratic party for six years—except during four months in 1984 when Walter Mondale was Reagan’s official Democratic challenger. This high-profile role was not a function for which O’Neill, an old-fashioned, behind-the-scenes legislative tactician, had been trained. But circumstance demanded that O�
��Neill change, and he did; in the process, he altered the office of speaker, modernizing it for the media era. This Irish pol, long shy of cameras, became a far more visible national figure, better known to ordinary people than Rayburn and earlier speakers had been. His increased visibility and popularity gave him more leverage in the opposition game. At first, O’Neill was far outclassed by Reagan, but before he retired in 1987, O’Neill had fared surprisingly well.

  In 1981, O’Neill had ambivalent feelings about how to play the opposition game; his strong partisan instincts were tempered by reverence for the presidency and the weakness of his political position. “I am the Opposition,” O’Neill liked to thunder. But O’Neill had been tutored by Rayburn, who revered the nation’s highest office; O’Neill picked up that reverence. Many times, I have heard O’Neill refer not merely to “The President” but more elaborately to “The President of the United States.”

  Nor is this mere verbal genuflection. For as speaker, Tip O’Neill believed it was his responsibility to make the process of government work. Despite the carping of liberal Democrats, he was determined to give Reagan’s program a fair chance to stand or fall in 1981 and not to sabotage it by parliamentary obstruction. Early on, he gave Reagan his word that Reagan’s main economic program would be voted on by the August recess in 1981. “I’ll give you your right,” he told Reagan—then adding with partisan exasperation, “but, Jesus, don’t push me.”3 That commitment, kept by O’Neill, was a great boon to Reagan’s presidency. Had the Democratic Congress given Jimmy Carter as firm a legislative schedule in 1977, Carter’s record and reputation would have been far different. The Senate stalled Carter fatally.

  Reagan’s popularity and the national mood of economic crisis made it risky for O’Neill to obstruct the Reagan program; the 1982 recession could have been blamed on Democrats had they blocked the new president’s first move. As a New Deal Democrat, O’Neill opposed many specifics of Reagan’s program; but as speaker, he felt a parliamentary duty to give Reagan a fair shot.4 For example, O’Neill was wary when Reagan phoned him in June 1981 to ask for a second try to toughen up the budget resolution (his first had passed but had been watered down). Nonetheless, O’Neill arranged the second chance. “Hey, I allowed the president of the United States to put it on the table,” he declared to me one day. “My power is to stop things. I had all my ultraliberal friends saying, ‘Jesus, you shouldn’t let the son of a bitch get it on the floor.’ But he’d just had an election that he’d won, and that isn’t the way democracy works. You give him his opportunity to get his stuff on [for a vote].”5