7
ENERGIZING CONGRESS
In America, it is said, “The President proposes; the Congress disposes.” Almost uniquely among the world’s democracies, the U.S. Congress has two coequal divisions in a bicameral legislature, with a House of Representatives and a Senate. Each jealously guards its own prerogatives, generally takes a dim view of actions by the other, and certainly does not regard them as binding. The two chambers operate under radically different rules. The Senate’s are so notoriously convoluted that regional and even individual interests can gravely wound or even kill a bill that has passed the House with presidential support. The prerogatives of individual senators are almost sacred: A single senator can prevent a bill from even getting to the floor by placing a sometimes anonymous procedural hold on it. And individual senators can try to talk a bill to death with a filibuster that can be broken only by a supermajority, thus overriding the principle of simple majority rule.
Because of its larger numbers, the 435 members of the House operate under a tighter leash. The Speaker, the majority leader and their team of whips, generally one for each region of the country, exercise control through the Rules Committee, which sets the terms for debating and amending legislation that comes out of committees. The Speaker can exercise almost absolute authority by restricting amendments from the floor.
When Carter presented his energy plan, the Democratic leadership of the House was ready to help. Just as there was a new Democratic president, there was a new Democratic congressional leadership led by Speaker Tip O’Neill, who had moved up from majority leader when his predecessor, Carl Albert, retired, and wanted to make his mark by helping a Democratic president to succeed. A tall, rotund Boston Irishman, with a shock of white hair, a bulbous red nose, and an engaging smile, he was a politician’s politician bred in the rough-and-tumble of his Boston district. He was both beloved and respected on both sides of the aisle for his fairness and conviviality. Since his wife, Millie, never moved to Washington, he rarely socialized, shared a Capitol Hill apartment with his close Massachusetts friend, Representative Edward Boland, and spent almost every waking hour on House business, directly or indirectly. He also benefited from the post-Watergate reform of the House rules, enhancing his powers; and although committee chairmen now were elected by the entire Democratic caucus instead of ascending by seniority, the Speaker could set timetables for committee business and controlled the Rules Committee that was the traffic cop for the flow of legislation to the House floor. O’Neill took advantage of this shift of power to the fullest, using Carter’s energy plan as his first opportunity.1
The two Democrats could not have been more different, yet there was something deeply touching in the old pol and the young president. Carter was slight, appearing even more so next to Tip. He was the antipolitician who came out of a rural, one-party Southern tradition, and when a deal had to be cut with the generally pliant Georgia legislature to pass his major initiatives, he would leave it to Bert Lance, who would tell the governor about it later.
Tip was a Massachusetts liberal, a New Deal and Great Society Democrat who believed in the role of government to stimulate economic growth, create jobs, and work for social equality. Carter, by contrast, believed in effective but not big government, the first New Democrat in high office seeking to prune government programs, reduce federal regulations, and pull the Democratic Party from the left to the center. But he was also a populist with an affinity and concern for the poor and a deep commitment to equal rights for minorities and women, which created a bond of sorts with the Speaker. Where they truly parted company, however, was on the president’s personal abstemiousness and fiscal conservatism: O’Neill was raised on rewarding his supporters with patronage; Carter abhorred the concept.
But O’Neill was a savvy enough politician to realize that Carter’s nomination and election as a moderate Southern Democrat signaled a shift in the political winds, and that he had to accommodate to it as well.2 While some of the more liberal members expected a Carter presidency to pick up from where the Vietnam War had ended the construction of Lyndon Johnson’s Great Society, Tip knew that as much as he might welcome this, it was not going to happen. But what he and the vast majority of Democrats did expect after suffering two Republican presidents, was a kind of intimacy, a sensitivity to their special needs and projects, a personal rapport with a fellow Democrat. This they would also not receive from this cerebral Southern moderate, who neither honed these social and political skills in Georgia nor enjoyed them in Washington.
The Speaker was a master craftsman of the backroom deals and midnight compromises that are elements of the hands-on contact required for presidents to deal with Congress. This Irish Catholic speaker also employed two truly gifted apprentices, both observant Jews fresh out of college and still in their twenties, Ariel “Ari” Weiss and Joseph “Jack” Lew. Weiss turned out to be essential in guiding legislation through every parliamentary twist and turn (and would become prominent in Israel’s philanthropic community). Lew was an astute and intelligent draftsman (and would later hold senior positions in the Clinton and Obama administrations, finally as secretary of the Treasury). Tip did not feel that their youthful expertise was mirrored by the top staff at the White House, whose anti-Washington attitude he loathed, along with what he felt was their lack of respect for him and the institution he led. But he turned out to be immensely loyal to the president, who returned his support with respect and deference. I could not help but genuinely love Tip O’Neill, and I believe that in his cool way, Jimmy Carter did, too.3
Until he arrived in Washington, Carter never realized the fragmentary nature of the federal legislative process, the lack of party loyalty, and the hurdles faced by any comprehensive piece of legislation. “The governor is really much more powerful in Georgia than the president of the United States is in Washington,” Carter reflected.4 Because of the vast scope of the energy bill, it would normally have to work its way through seventeen House committees or subcommittees, a number that shocked Carter.
But O’Neill had a novel answer, which he had begun developing when he learned that energy would be a domestic priority of the new president. His solution to these overlapping jurisdictions, never used before or since, was to create an Ad Hoc Energy Committee; each of the numerous regular chairmen would be required to report their part of the bill on a tight timetable to this supercommittee, which was certainly not popular with the barons of the House. If there is anything that enrages committee chairmen it is an attempt to weaken their jurisdiction, which they rank with a sneak attack by a foreign enemy.
Although O’Neill could not get everything he wanted, he achieved more oversight than any Speaker before or since. He was unable to win the right for the supercommittee to change recommendations reported to the full House by the five standing committees. But this unique body could still recommend amendments from the floor to keep the omnibus bill stitched together, internally consistent, and as close as possible to the president’s proposal. The main idea was to shield the plan’s most controversial proposals on oil and gas pricing from being stripped out of the bill on its way to the floor, then wrap them up with more politically popular energy conservation measures and put the package to an up-or-down vote of the whole House.
To chair the unprecedented Ad Hoc Energy Steering Committee, the Speaker named his friend Thomas “Lud” Ashley, a good-natured, well-liked moderate from Ohio, and then stacked it with twenty-seven Democratic loyalists.5 When the president’s 283-page National Energy Act was introduced, the clerk of the House divided it in the traditionally byzantine manner among the Energy and Power Subcommittee of the Interstate and Foreign Commerce Committee; the Banking, Finance, Urban Affairs, and Ways and Means Committees; plus a minor proposal to save gas by pooling vans conveying federal workers to their jobs, which went to the Government Affairs Committee. Remarkably, almost all but the emergency gas tax and a three-cent increase in gasoline prices were piloted through Ways and Means by the Speaker’s
deadline. It even fended off efforts by Republicans and oil-state Democrats to return the wellhead revenues to the oil companies instead of to consumers. The conservation part of the program passed largely intact.
While Congress was digesting the energy plan, the president used the weekly cabinet meetings to put energy at the top of the agenda. During the spring and early summer, it was open season in Congress (and within the administration) for interest groups either to avoid the higher costs or obtain a larger rebate on the wellhead tax. As Bismarck could have predicted, it was not a pretty picture, and our uncertainty made it worse.
Economists generally wanted the money to help pay for tax reform, and Senator Daniel Patrick Moynihan objected to putting the energy package ahead of welfare reform.6 Consumer groups wanted to legislate a full rebate and also wanted gas priced according to the industry’s own costs and not the OPEC-managed oil price. Farm-state legislators threatened to band together and kill the whole package—and they had the votes to do it—unless the law exempted oil and gas boilers used in agriculture. Prospective developers of synthetic fuel—for example, turning coal into gas—wanted loan guarantees or government subsidies instead of the research and start-up grants. Transportation Secretary Brock Adams made a salient political point in demanding that some of the money from the energy taxes be siphoned into highway maintenance and mass transit, to give mayors and governors a stake in these funds, and develop a national constituency for Carter’s energy package.7 But it contained too many complex and financially uncertain components, and early on, I made a marginal note: “Overloaded circuits.”8
The Congressional Budget Office (CBO) then gave us what can best be described as a cold shower. The CBO specialists are highly professional, apolitical, and indispensable in providing Congress with analyses of all legislative proposals (as they did with devastating impact in 2017 to the Republican effort to repeal and replace Obamacare), and they informed me that their estimates of energy savings were considerably less optimistic than our own, although still considerable improvements over the current situation.9 Among other flaws, they said poor people with cars would be hurt.
It was obvious that our congressional opponents would throw the CBO’s more pessimistic numbers in our face, particularly their estimate that the plan would increase inflation by 1 percentage point and slow growth by seven-tenths of a point during its initial three years. However important our plan was for the nation’s energy security, their calculations would cut against the grain of the issue most important to Carter’s political standing—the state of the economy.
As we approached the House vote, we kept hitting speed bumps despite trying to avoid them. Even the tax credits passed by only one vote after our heavy lobbying. In June, Schlesinger began talking about fallback positions—raising the gasoline tax and dividing up the revenue among the states for highways, localities for mass transit, and a half-cent a gallon for research and development.10 Representative Vanik11 called to propose a similar allocation of that money from the wellhead tax. Here was an influential liberal Democrat reaching out to explore a deal, but Schlesinger never engaged in this kind of bargaining.
Les Goldman recalled that his phone rang around that time, and to his astonishment, it was the president, who said he had called Schlesinger to “come over and tell me what’s going on,” but his boss was out of town. Goldman literally ran across the alley from the Executive Office Building to the White House and told Carter it was important that he make half a dozen calls to help nail down an important vote. Carter said he would see what he could do, but “He really wasn’t interested in it.… It was so clear to me that at that particular moment he didn’t really understand how to get those guys [in Congress] on board.”12
Sometimes it seemed that the president felt he could spread the idea of energy conservation merely by the example of his own frugality. He tried to switch to a less-expensive presidential limousine and also declared at a budget meeting, “It makes me sick to see the waste of money on TVs and radios in the White House.”13 Mondale remembered that he even ordered the air conditioners turned off, until the insufferable Washington summers made it unbearable.14
Gradually, around mid-June, we began to see some flexibility. The president breakfasted with Democratic and Republican congressional leaders to seek cooperation, a gesture unimaginable in today’s polarized politics. He made a quite remarkable statement to the bipartisan breakfast: “Normally a Republican President is a restraining force on a Democratic Congress. But I will be a restraining force on a Democratic Congress in terms of spending,” citing the breeder reactor, where he would allow research and development to continue but save billions by not putting it into production. Byrd gave Carter some sound political advice that would ease movement on both sides by urging him to settle for 75 percent of the energy package now, come back for another 10 percent the following year, and then come back for more later.15
With the program moving through the heavily Democratic House by what Schlesinger described to the cabinet as “precarious votes,” I was called into the president’s study. He showed his populist colors by asking me to do an analysis of the oil companies’ special tax advantages because “We may need that to counter their lobbying.”16 He was beginning to learn how to fight hard, Washington-style.
* * *
We now were approaching the moment of truth in the House of Representatives. The Rules Committee, which sets the terms for any House vote, limited Republican amendments to a bare minimum and barred any motions to untie the package by striking out separate parts of it. The only way the bill could be defeated would be under an all-or-nothing vote. The climax began on August 1 with a floor debate on the whole package that emerged from the Ad Hoc Committee—O’Neill’s procedural brainchild. The Speaker wisely wanted to finish action before the August recess, lest members return home to be besieged by lobbyists trying to dilute or kill the bill. They targeted natural gas, which previous Congresses tried and failed to decontrol by increasingly narrow margins.
This led to some congressional exchanges well above the normal windbag level, thanks in part to Texas congressman Robert Krueger, who stood out in the exceptionally talented class of Watergate babies swept into office in the 1974 midterm elections. A handsome, curly-haired Rhodes Scholar with a doctorate from Oxford, he had just been named at the tender age of thirty-six as dean of arts and sciences at Duke University, where he was a Shakespeare scholar. But when his father came down with cancer, Krueger moved home to care for him and then ran for Congress from Texas to fight OPEC’s grip on America’s energy. Deregulating natural gas to encourage more domestic production was one way Krueger chose to retaliate. But after Schlesinger gave only lukewarm congressional testimony favoring eventual decontrol sometime in the future, the two faced each other at a White House briefing. Schlesinger said mockingly, “Methought the young Shakespeare professor had a lean and hungry look in the committee meeting earlier this week.” Krueger immediately recognized the allusion to Cassius in Shakespeare’s Julius Caesar and shot back, “You know, Jim, the next lines are, ‘He thinks too much. Men like him are dangerous.’” Bested in scholarly combat, Schlesinger turned away.17
But the actual backroom arm twisting was considerably more painful than this war of words, and the Ad Hoc Committee realized it was perilously close to losing a floor fight to Krueger and his allies. A key amendment aimed at peeling off members pressing for speedier decontrol was proposed by the liberal, eccentric Texas Democrat, Bob Eckhardt, who could often be seen wearing a light suit and broad-brimmed straw hat while riding his bicycle around Capitol Hill. But he was a serious legislator and was joined by a rail-thin, swaggering friend of the oil and gas lobby affectionately called Texas Charlie Wilson (to distinguish him from California’s Charlie Wilson) who had a seemingly inexhaustible supply of attractive blonde aides and secretaries in his Capitol Hill office. His legs were toothpick thin, all the more evident in the tight-fitting blue jeans and tall cowboy boots he often sported. T
he well-crafted amendment introduced by this incongruous duo would have liberalized the definition of “new natural gas” qualifying for higher prices. Although the real-world effect would have been minor, the political effect would have been major in helping to stave off full deregulation, desired by producer states, by providing more revenue to natural-gas producers, while preserving the administration’s plan to regulate the entire natural-gas market.
As the vote approached, I met with leaders of the consumer groups and likewise with the competing major business organization. Our plan was in the crosshairs of conflicting interests. Jim Flug of Energy Action urged us to stand firm against higher gas prices in any form.18 John Post of the Business Roundtable spoke for the largest American corporations in a more measured tone, and he was my favorite business lobbyist. Bald as an egg and with sad, drooping eyes, he was kind, thoughtful, and sensible. Big Business favored a compromise leading to eventual deregulation of natural gas but wanted certainty; he was flexible on the transition period because he wanted to avoid a drawn-out battle that would hold back investment.19
Soon the deregulation forces did an about-face and supported the compromise, including Krueger and others from oil and gas districts, They realized they could not carry the House for full deregulation, and the Eckhardt-Wilson amendment would mean more money for the energy industry, even if not as much as total deregulation. So what looked like a cliffhanger was adopted by a voice vote.
But the deregulation supporters were not giving up. They proposed yet a different complex path toward full deregulation. It was a time of high drama and stirring debate. O’Neill, who in the tradition of Speakers rarely took the floor to speak, lumbered to the well of the House chamber, waved his arms and slapped his hands together for emphasis. He urged his colleagues in his booming Boston Irish voice to vote against big oil: “Never have I seen such an influx of lobbyists in this town. America is watching this legislation more than it has watched any legislation in years. Will the House fail? Can the House act? Can the House pull together an energy policy?”20 Most Democratic members were mesmerized, then roared and applauded.
President Carter Page 22