by Alan Murray
The ultimate measure of the speech’s success was taken by the Postal Service. More than seventy-five thousand people responded to Rostenkowski’s plea to write “Rosty, Washington, D.C.” One person sent a wooden two-by-four beam to help the chairman beat back the special interests. Another envelope contained a yards-long, computer-generated banner that read MY PARENTS NEED TAX REFORM. “Write Rosty” buttons and bumper stickers were printed quickly, and everyone from Treasury Secretary Baker to Bill Bradley wore them proudly in public appearances. A photo in Sherman’s office showed a WRITE ROSTY sign on the front of a parked limousine.
In a single eleven-minute four-second performance, Rostenkowski, the consummate inside player of the dark, back corridors of the U.S. Congress, transformed himself into a kind of folk hero of federal taxation. His speech stirred something deep inside a skeptical public, and put the Democrats—and Rostenkowski—back on the tax-reform map. “I really took over the party on that ‘Write Rosty’ speech,” Rostenkowski says—with a touch of hyper-bowl. “I took over the direction of the Democratic party.”
“I must admit,” the chairman said the morning after the speech during a breakfast interview at The Wall Street Journal’s Washington office, “I am on a high.”
Ever since Treasury I emerged from the inner sanctum of the Treasury Department in November 1984, the Ways and Means chieftain had been forced to define a position for his committee, and his party, on the tax-reform front. That position, at first, was ambivalence. Rostenkowski tentatively embraced reform but said that it should not divert Congress from its main priority: deficit reduction. “Tax reform is a noble cause,” he said soon after Treasury I was unveiled. “Deficit reduction is a demand.”
The House leadership was skeptical of reform, and Rostenkowski also had his doubts. But President Reagan had locked the Democrats into a wrenching dilemma. Reform had always been a Democratic battle cry—they were supposedly the party of the little guy, the working man, the middle and lower classes; the Republicans were the party of privilege, the country-club set, the fat-cat corporations. In an attempt to usurp the Democrats’ party-of-the-people mantle, President Reagan and the GOP were now turning things upside down.
Many of Rostenkowski’s friends urged caution, but Rostenkowski did not believe he had the luxury to say no. He thought he had to defend tax reform, which he regularly called “the biggest plank in the Democratic platform.”
“I thought Ronald Reagan was trying to outpolitic us,” Rostenkowski says. “I’m not a reformer. But I’m a Democrat. And if the Democrats are for reform, then I’m a reformer.”
Staking out the territory of reform-mindedness was especially important given the Democrats’ drubbing during the 1984 presidential election. Walter Mondale’s promise to raise taxes had hurt the party and enabled President Reagan to seize the initiative on the tax issue. Many Republican strategists were arguing that tax reform could turn the tables and make their party the majority party for decades to come. They thought they could make the Democrats the party of special interests and the Republicans the party of the average American. It was a threat that serious-minded Democrats could not ignore.
Though Treasury I was widely regarded as politically inept, it was such pure reform that it was difficult for Democrats to debunk on political grounds. “How can you put a Democratic stamp on something that’s so fucking Democratic with respect to reform that if you go further to the left, you’re a Communist?” Rostenkowski asked. Indeed, one of the staunchest liberals on the Ways and Means panel, Representative Charles Rangel, Democrat of New York, introduced a slightly altered version of it under his own name as a bill in the House. “You could go to the bottom drawer of the most liberal reformers, you could take out all their lists, and few would eclipse Treasury I,” said Sherman of Rostenkowski’s staff. “Democrats were just stunned.”
The chairman and his staff gradually realized that even though Treasury I stood little chance of enactment, it made tax reform into a major issue that was not likely to go away. As Ways and Means chief counsel Joseph Dowley put it, “The genie was out of the bottle, and there was no putting it back.”
The backing of tax reform by the conservative Ronald Reagan gave Democratic reformers a shot at accomplishing what they had sought for decades. It was the sort of unexpected gesture, like President Nixon’s 1972 trip to Communist China, that dramatically altered the politics of the issue.
After Treasury I was unveiled, Rostenkowski and his people flew to Chicago for a day. At a downtown hotel, Rostenkowski convened a round-table meeting of his businessmen buddies, people he had known and grown up with in Chicago politics. On that gray December day, he and his aides witnessed a near explosion of outrage. The real estate developers were particularly incensed, and their vehemence took the Rostenkowski crew by surprise. They knew that businessmen would not like the Treasury plan, but they had not imagined the depth of their feeling.
The experience showed Rostenkowski that tax reform would be a perilous undertaking, but he also believed the reaction presented a unique opportunity. “I started to realize that, brother, I’ve got a lot of friends in the business community. I realized at that point that I was their salvation, because I wasn’t going to move as far as Treasury I.” Like Baker and Darman, Rostenkowski saw that the original Treasury plan gave him a rare chance to be a reformer and a friend to business at the same time.
The chairman unsheathed his newfangled reformist streak gradually. He first put the business community on notice in a speech in late February to the Economic Club of New York. There at the New York Hilton, looking distinctly uncomfortable in black tie, the hulking Ways and Means chairman said: “To those who are preparing to stand against the change, I have a warning: Don’t underestimate the public; demand for reform is growing.” At that speech he also withdrew his earlier insistence that Congress focus on deficit-reduction before turning to reform. Instead, he said that all tax breaks, “even the most popular,” must be on the table for possible elimination.
The tax-reform bill was the greatest challenge that the chairman had ever undertaken. The effort would entail cracking open the entire tax code and rearranging its delicately balanced choice of winners and losers. Every interest blessed with a benefit would be forced to defend it to the death. Every interest that wanted a break would have a chance to create it. Rostenkowski’s decision to answer Ronald Reagan with a yes incited the income-tax equivalent of world war.
No one, not the president, not his aides, not Rostenkowski himself, fully appreciated the difficulty of this task. Ways and Means top tax lawyer Robert Leonard tried to give a hint. He approached his chairman several times in early 1985 bearing a copy of the Internal Revenue Code of 1954, the standard text at the time. It was hundreds of pages in small print. “Boss,” Leonard told him, “that’s what we’re going to change.” After he had done that a couple of times, Rostenkowski said, “It began to penetrate this thick skull. I said, ‘Holy Jesus, this is a monstrous task.’ But by then we were already in it; you get to the point of no return.”
Notoriety had come late to Rostenkowski. He was fifty-seven years old when he delivered the “Write Rosty” speech and had already served in the House for twenty-seven years. His career to that point had been marred by setbacks and disappointments. He had been laboring under a particularly dark cloud ever since he assumed the chairmanship of Ways and Means in 1981.
That year, he planned a party to celebrate the passage of his first tax bill, but the bash turned out to be more of a wake. The usually ebullient chairman left the House floor grumbling bitterly after his committee’s bill was clobbered by a different measure backed by President Reagan. In 1982, Rostenkowski was dealt an even larger blow. The Senate Finance Committee, led by Robert Dole, managed to approve a tax increase, while Rostenkowski was unable to get his own members to act. In 1983, yet another Rostenkowski tax bill went nowhere, killed on the floor of his own chamber, the victim of a procedural vote.
With tax reform i
n 1985, Rostenkowski saw his chance to shine, to avenge his earlier losses. In 1983 he helped pass a bipartisan overhaul of Social Security, and in 1984 he managed to get a big deficit-reduction package through Congress, but those were not imposing enough achievements. He needed a big win to reestablish himself and his committee as legitimate legislators. Tax reform was the Big One. It was Rostenkowski’s opening.
In pushing reform, he was taking a huge gamble. If he lost, his already tarnished reputation, and that of his committee, probably would be sullied for good. If he allowed the bill to die in the House, President Reagan and the Republicans would never let the Democrats, who were in control there, live it down. What’s more, the chance for Democratic-style tax reform probably would be gone for decades. So Rostenkowski decided to work with the president. “I laid my reputation on the line,” he said later.
If Rostenkowski had not been a politician, he might have been an excellent ball player. At St. John’s Military Academy in Delafield, Wisconsin, the young Dan Rosten, as he was known in high school, won fourteen letters in four sports. He liked baseball best, and in 1949 was invited by Connie Mack, owner and manager of the Philadelphia Athletics, to try out for the team. But that did not last long. Rostenkowski’s father called him home to return to school and join the family business—politics. His grandfather was a Polish immigrant who ran once for local office. His father, Joseph, was an alderman and ward committeeman from the same “Polish corridor” region of Chicago that his son still represents. When Poles fresh in town from the old country were asked who was the president of the United States, they would sometimes say, “Joe Rostenkowski.”
Rostenkowski’s first post was virtually inherited from his father. He became the Thirty-second Ward committeeman, a post he still held during the tax-reform debate. At the age of twenty-four, he became the youngest member of the Illinois House. At twenty-six, he became the youngest member of the State Senate. He was elected to the U.S. House from the Eighth District in Illinois in 1958 at the age of thirty.
Rostenkowski’s decision to leave the Windy City and go to Washington was unusual for a machine politician. He came from a tradition where politicians bided their time and worked their way up the local-party ladder until someday, perhaps, they could reach the pinnacle of public service—mayor of Chicago. Cook County Democratic dinners looked like wedding cakes, with the local dignitaries stacked up at the top in a strict hierarchy. Only aged and retired politicians ever left to do service in Washington. Rostenkowski had to do some persuading to convince his mentor, Mayor Richard J. Daley, the virtual despot of the city, that he could use a young man in the nation’s capital.
As Daley’s “errand boy,” Rostenkowski drove to Chicago every Thursday night to brief the mayor on political happenings and tell him what he was learning as an eager backbencher in the highly stratified world of Congress. Rostenkowski and an aide would manage the 11½-hour overnight trip by alternating naps on a mattress in the rear of their station wagon. Daley would tease Rostenkowski by referring to him as the “speaker of the House.” But Rostenkowski’s briefings did not take on great significance until 1964, when he was appointed to the influential Ways and Means Committee.
Then, as now, Ways and Means wrote tax law, but more important to Rostenkowski and his mayor, it also made committee assignments for members of the House. Rostenkowski’s job was to help dispense committee seats, a potent form of patronage that he and Daley well understood—and utilized.
In that same year, 1964, Rostenkowski was chosen by Lyndon Johnson, a Rostenkowski hero, to second the televised nomination of Hubert Humphrey as Johnson’s vice president at the Democratic National Convention in Atlantic City. Johnson called him over and said, “That nice, long Polish name on the screen, ‘Dan Rostenkowski.’ Smart move, wasn’t it Dan?” It was Rostenkowski’s first major television success, and it helped encourage him twenty years later when he was asked to answer the president’s tax address.
The next nominating convention in 1968, however, would nearly be Rostenkowski’s undoing. In his own hometown of Chicago, the Democratic party was torn apart by protest over the war in Vietnam. While police and students battled in the streets, the convention also was unruly. It was too much for the man in the chair, Representative Carl Albert of Oklahoma, to handle. So Lyndon Johnson telephoned Rostenkowski, who was sitting on stage, and told him to rein in the convention. In front of the television cameras that had been his friend four years before, Rostenkowski wrested the gavel from the diminutive Albert and hammered the throng to order.
Albert never forgot. When House Speaker John McCormack of Massachusetts retired in 1970, Albert succeeded him. Rostenkowski was the choice of Hale Boggs, the new majority leader, for the position of Democratic whip, the top vote-counter in the House. But Albert vetoed Rostenkowski, and instead, chose Tip O’Neill. Adding insult to injury, Rostenkowski was upset that same year in his fight to remain chairman of the Democratic Caucus in the House, a leadership position he had held since 1967.
Eventually, after Boggs died in a tragic plane crash and Albert retired, O’Neill moved into the job that Mayor Daley had teased his young disciple about one day holding—speaker of the House.
In 1976, Rostenkowski’s world changed, and he emerged again as a force in the House. He was a key vote-getter for Representative Jim Wright, a moderate Democrat from Texas, who was elected majority leader after a fierce four-way fight. Rostenkowski was compensated for his role with the job of chief deputy whip. On Ways and Means that year, Rostenkowski, for one of the first times, concentrated on tax matters. The panel had lost its power to make committee assignments during a congressional reform movement in 1974. Rostenkowski was no tax technician, but during a crucial House-Senate conference, he stayed up late one night studying a portion of the tax code. He was finding arguments to defeat an amendment by Senator Abraham Ribicoff of Connecticut that benefited several insurance companies in the senator’s state. To the surprise of almost everyone, Rostenkowski marshalled this newfound knowledge and managed to win enough votes to kill the provision.
Rostenkowski’s excursion into tax policy, however, was not done for the good of the code. Rather, the Chicagoan was settling an old score. During the 1968 convention, Ribicoff had criticized the “gestapo tactics” of Mayor Daley and his riot-helmeted police, and Rostenkowski never forgot. “I went in the room and just kicked the brains out of them,” a grinning Rostenkowski told The Washington Post some years later about the Ribicoff tax break. The incident contributed to Rostenkowski’s image as a politician who plays hardball.
In later years, Rostenkowski became well-known for his long memory and his eagerness to wreak revenge. In 1981, Ways and Means Representative Kent Hance, Democrat of Texas, led a revolt that ultimately defeated Rostenkowski’s own tax plan on the House floor. In the following weeks and months, Hance became a committee pariah. During a committee trip to Baltimore, he was assigned a seat in the back of the bus, behind the staff. The chairman also refused to allow him to travel with the rest of the committee to China. Even during committee meetings, Hance was humiliated. He was, quite literally, grounded; Rostenkowski made sure his chair, unlike the others’, did not have wheels. “If you cross Danny Rostenkowski,” Representative Trent Lott, a House Republican leader, warned a colleague, “he’ll get your ass!”
The pivotal event of 1976 for Rostenkowski came at the tail end of the year, far away from the intramural intrigue of Capitol Hill. On December 20, Mayor Daley died. The man who had become synonymous with the city, who controlled it for more than two decades and molded it to his personal style, was gone. It was a particularly painful blow to Rostenkowski, who learned his craft at the feet of the master and served loyally as his eyes and hands in Washington for so many years. At the mayor’s house after the funeral, Daley’s widow pulled Rostenkowski aside and pressed her husband’s money clip into his mitt-sized hand. “He wanted you to have this,” she said. Rostenkowski still carries it with him.
The death,
in a way, liberated Rostenkowski. Instead of stripping him of his power, it allowed him to become his own man, to come into his own as a leader in the House. It was the passing of an era and the start of a new one. Rostenkowski began to pay more attention to Ways and Means and to focus more on the lessons he had learned over the years from its influential chairman, Wilbur Mills of Arkansas. “I am at his knee,” Rostenkowski would say years later of Mills. From Mills, Rostenkowski learned some basic legislative skills: the art of controlling a committee, of angling always to win. Indeed, one of Rostenkowski’s most central goals was to get and maintain control. Some critics charged that Mills never took gambles, always played it safe. He worked under weak speakers, and had the luxury of “closed rules” on the House floor that prevented amendments on his bills. The chairmen who came after him did not have it so easy. Nevertheless, Mills became a model for Rostenkowski and taught him some important lessons that came in handy during the wrenching battles for tax overhaul.
In 1980, the Reagan landslide swept many senior Democrats out of office, and Rostenkowski was faced with a critical choice. He could move up from his position as deputy to become Democratic whip, using his well-honed skills of vote-counting, arm-twisting, and log-rolling; or he could take the chairmanship of Ways and Means, which was vacated by the defeat in Oregon of Al Ullman. Rostenkowski, it turned out, was not ready to settle down, was not willing to allow himself to be branded as a political hatchet man, a palooka from the Illinois Eighth. To the surprise of many, he chose the more cerebral, and challenging, job: He chose to enter the big-time world of Ways and Means, one of the nation’s least known but most important centers of power and influence.
Ways and Means stands at the vortex of two worlds. One is the world of government and its awesome power of taxation; the second is the business world, in which the whims of Ways and Means can mean the saving—or losing—of millions, even billions, of dollars a year. This fact elevated Rostenkowski, as chairman, to the equivalent of American royalty. Everywhere he went, he was fawned over and fêted, hosted and pleaded to, sought after and feared by the best, the brightest, and the richest of the capitalist elite. Maître d’s, lobbyists, and hangers-on of all sorts would clamor to assist “Mr. Chairman.” He rarely had to pick up the check, and in fact, attracted hundreds of checks of a different sort. One of the ways Rostenkowski kept the loyalty of his Ways and Means members was simply to attend their fundraisers. Wherever he went, thousands of dollars of campaign contributions followed. For some people, merely being seen in his presence would count as money in the bank.