Worthy Fights: A Memoir of Leadership in War and Peace

by Leon Panetta

  Conversion began in the early 1990s, and my role in it changed in 1992, when President Bill Clinton named me as director of the Office of Management and Budget. One of my first calls upon accepting the assignment was to Barry. “You’re going to read something about me in the paper tomorrow,” I told him from Little Rock, where I’d gone for the announcement. “Don’t worry about it. This could help.” I assumed, rightly, that it wouldn’t hurt our project for it to have the enthusiastic support of the president’s budget director.

  The school was dedicated on September 4, 1995, by President Clinton—who by then had been my boss twice, first during my time as budget director and then as the president’s chief of staff. When the president agreed to attend, he asked for just two favors in return: He was planning on returning that weekend from Pearl Harbor, so he asked that he be able to fly from that ceremony to Monterey. And then he wanted to get in a round of golf at Pebble Beach on the morning of the dedication. We arranged for those, and the university’s first class of incoming students was welcomed by the president of the United States.

  Today, Cal State Monterey Bay is home to fifty-six hundred students, as well as the Panetta Institute for Public Policy. Other portions of the base are still being developed, and there’s plenty of work yet to do, but already the reused base is generating more economic activity than Fort Ord did. And the future of the region is far less tied to a single entity, so the district today is better positioned to weather changes in the economy than it was when so much depended on the army’s presence. It wasn’t easy, but converting Ford Ord turned swords into plowshares and brought lasting benefit to my district.

  • • •

  The most far-reaching of my duties in Congress began in my second term and increasingly dominated my service through the 1980s and into the early 1990s. That was my work with the House Budget Committee, which I joined in 1979 and chaired from 1989 to 1994. At first the challenge was serious but more of management than conflict. That’s because the Carter budgets were reasonable and fairly balanced, though stressed by the struggling economy. In my first term or so, my focus was on broadening some of his proposed budget cuts to include defense, which he had excluded for political reasons but where I was convinced we could find savings. I was also determined to look for waste in programs popular with my fellow Democrats, including Medicare and Medicaid and some areas involving veterans. In all, my goal was to find about $4 billion in so-called legislative savings, cuts from programs that were added to the president’s budget by Congress and that I felt we needed to show greater discipline about.

  As with the ethics questions I raised early in my first term, these weren’t always popular, and some of my colleagues questioned why I was so determined to bring down the federal deficit. Then and now, I have two answers. The first is personal. My father was forcefully frugal. He never carried any debt, and once blew up at me when he discovered I was using a gas card. From as early as I can remember, he impressed on me and my brother the importance of paying our bills. Debt placed the debtor at risk, and saddled him with interest payments, both of which my father abhorred. With my father’s voice thus ringing in my head, deficits struck me as irresponsible, especially in the context that the federal government accumulates them, effectively allowing one generation to borrow for its own prosperity while pushing off the repayment of that extravagance onto its children and grandchildren. My father was determined not to leave his children in debt; I saw no reason why my responsibility to the country should be any less.

  Then there was the more policy-driven reality. Deficits over time create debt, and that debt has to be serviced. Every federal payment that goes toward debt service represents money taken out of today’s economy. That is—or ought to be—as offensive to liberals as it is to conservatives, because money spent on debt service could otherwise be spent just as easily on education as on national defense, food stamps, missiles, or the post office. Debt service advances no policy or ambition. It is merely the price of having borrowed in the past.

  As I learned the procedural niceties of Congress and the Budget Committee, I also discovered a tool just waiting to be used in the service of reducing deficits. Known as “budget reconciliation,” it allows the Budget Committee’s subcommittee on Reconciliation to direct the authorizing committees to make cuts in order to bring their budgets into conformance with the overall budget resolution—“reconciling” the budget resolution with the individual spending authorizations, which can only be done by decreasing the proposed spending. That sounds technical, and it is, but it boils down to this: The chairman of the Reconciliation subcommittee can tell the chairs of the authorizing committees how much to cut, and if they refuse, that subcommittee chairman can effectively make the cuts himself by including them in a reconciliation bill for the entire House to consider. That strips the authorizing committees of their power and shifts enormous authority to the Reconciliation subcommittee chair. In 1981, as Ronald Reagan came to office, the authorizing committees of the House included some of its most veteran and venerable figures. The chairman of the Reconciliation subcommittee was me.

  I spent much of that summer shadowing the work of House and Senate conference committees as they worked to hash out their differences and bring down the size of the budget deficit. I rarely spoke, but appeared often, sitting on the edge of the room and by my presence reminding the conferees that they’d better do the cutting or I’d do it for them. What’s more, neither the budget resolution nor the reconciliation bill can be filibustered, so my power to oversee reconciliation wasn’t subject to some of the more time-tested means of obstruction.

  Nevertheless, it didn’t go easily. As I told a reporter at the time, “Nothing in four and a half years compares to the time commitment and the totally consuming challenge” of implementing budget reconciliation that year. And much of my struggle was with fellow Democrats, who were fighting to preserve domestic programs while Reagan axed them to make room for his tax cut. I remember paying a visit to Billy Ford of Michigan. Ford had been in Congress since 1965—when I was still in the army—and he chaired the Post Office Committee that year. I showed up one day with Ralph Regula of Ohio, my Republican Party counterpart on the Reconciliation subcommittee, and warned Ford that if he didn’t make the necessary cuts to his budget, we’d make them for him.

  “Are you kidding me?” Ford asked, incredulous. I assured him we meant it. He made the cuts. By the time we were done, we’d cut roughly $38 billion from the budget, and I’d used my authority to deliver on those reductions while wherever possible avoiding devastating cuts to the programs most vital to the poor, sick, and elderly, those most in need of the services of their government.

  Soon the press was calling me the “chief enforcer” of federal budget cuts, and I began to be referred to as a “rising star” of the Democratic House.6 Martin Tolchin of the New York Times in late 1981 included me as one of a “new generation of Democratic leaders” coming into our own in the Capitol. Tolchin generously said of me, “He is one of the best-liked men in Congress. He gained the esteem of his House colleagues whom he cajoled, wheedled and occasionally bullied last spring as chairman of a budget task force responsible for making House committees comply with budget cuts ordered by Congress.”7 The story was accompanied by a picture of me with an armful of documents and a big grin on my face.

  I learned a couple of lessons in those months. First, the budget controls everything in Washington, and yet very few members of Congress really look carefully at it. Instead, members focus on their areas of interest and leave the big picture to others. By attending all those meetings, I genuinely knew the budget in a way few others did. That gave me the power of knowledge. In addition, I discovered the inherent power of reconciliation, and recognized it as a tool that could be used explicitly to override authorizing committees but implicitly to force others to act for fear that I would act for them. That gave me the power of position. In Congress, mastery of rules and inf
ormation can trump position or tenure, though not many members understand that.

  Finally, I realized that authority is best wielded with a smile. Rarely did I have to lecture or wag a finger in those months. I mostly listened and put my foot down only when I had to. I don’t believe I ever used the power at my disposal to settle a score or get something solely for myself. For the most part, I had good relations not only with Democrats but also with Republicans. We were united in our conviction to get things done, and that actually did overcome our differences, at least most of the time.

  When Reagan was elected in 1980, I braced for the worst politically. But President Reagan turned out to be less ideological and partisan than he appeared (and than he is remembered). A sort of residual bipartisanship persisted in those years. Despite the posturing and elbowing for advantage, eventually the leadership got to the deal, and the members generally fell in line.

  I also soon realized that Reagan brought to the presidency something Carter had lacked—the ability to relate to the American people. When Carter spoke to the nation, the response was a yawn. When Reagan gave an Oval Office address urging support for one of his initiatives, our phones in Congress would ring off the hook with constituent calls.

  As I noted earlier, he proposed a large tax cut and, with the support of conservative Democrats, got it. When he proposed a budget that cut some favorite Democratic programs, it passed over the opposition of many of my colleagues. With it came a requirement that put me, as chairman of the Reconciliation subcommittee, in a difficult position. Would I simply refuse to enforce the Reagan budget, or would I work with the leadership and the Republicans to implement reconciliation in the best way possible? I decided to be a chairman, not a partisan. It was a difficult challenge, working with Democratic chairmen who had to cut spending on programs many of them had authored. But I urged them to recognize that they, and they alone, could best minimize the damage from these cuts. Fortunately, Republicans in the Senate largely agreed with many of the priorities of Democrats in the House. The result was the largest reconciliation savings ever enacted by Congress. The effort held down deficits, though nothing could eliminate them in the face of Reagan’s tax cuts and increased spending on defense. Always gifted with the personal touch, Reagan called me himself to thank me for my work on the budget, a courtesy Carter never showed me.

  As time went on, Reagan and his staff developed working relationships with important Democrats, such as Tip O’Neill and Dan Rostenkowski. Together, those unlikely allies reformed Social Security, immigration, and the tax code. Reagan had his beliefs, but he was pragmatic enough to understand that bipartisan support would produce successful legislation. Yes, we had differences, but I recognized his gift for governing.

  As the Reagan presidency wound down, Bush moved to succeed him, but Republicans were skeptical. Until his association with Reagan, Bush had represented the moderate faction of the party. He had supported abortion rights as a younger politician—his father was an early and vocal supporter of Planned Parenthood—and he had grown up as a privileged son of Washington, hardly the kind of outsider that Reagan had seemed to be. Tacking to reinvent himself, Bush announced his opposition to abortion. He also endorsed prayer in public schools and new federal death penalties. That positioned him correctly among social conservatives, but economic conservatives, the other demanding faction of the party with doubts about Bush, continued to view him as untrustworthy. Bush responded by trying to portray Bob Dole and later Democratic nominee Michael Dukakis as favoring tax increases. By contrast, Bush described his commitment to Reagan Republicanism with the most quoted and remembered line of his political life, his declamation on taxes: “My opponent now says he’ll raise them as a last resort, or a third resort. But when a politician talks like that, you know that’s one resort he’ll be checking into. My opponent won’t rule out raising taxes. But I will. And the Congress will push me to raise taxes, and I’ll say no, and they’ll push, and I’ll say no, and they’ll push again, and I’ll say to them, ‘Read my lips: no new taxes.’”

  The delegates to the convention in New Orleans responded wildly to that promise, but Bush knew better—or at least he should have. Not long after his election, but before he was inaugurated, he invited me up to the vice president’s house, and we talked about the budget challenges that he would face as president. I was candid with him. “If you’re serious about dealing with this, ultimately you’re going to have to move away from the whole ‘Read my lips,’” I said. He answered, “Look, I know. I’ve taken that position, but my hope is that after a little time here, I may be able to adjust that position.”

  It wasn’t that I was determined to raise taxes; rather, it was that I’d learned that serious attempts to balance the budget required that everything be on the table, including tax increases, cuts to discretionary spending, and reform of entitlement programs. We continued to talk it over, and I gave him my standard lecture on deficit reduction, one that appeals to leaders of both parties. “This is about resources,” I said. “It’s about whether you, as president of the United States, are going to have the resources you need to be able to invest in whatever your priorities are. Because if you allow these deficits to grow, they’re going to rob you of your resources.”

  Bush stood firm for a while, but with the economy sluggish and deficits rising, he recognized that a responsible budget package needed more revenue. In May 1990, he convened a domestic budget summit at the White House, inviting twenty-one congressional leaders to join with his administration in trying to produce a budget that would stem rapidly growing deficits. Our goal was to cut the spending gap by $50 billion.

  On June 26, 1990, Bush released a short statement on the status of the budget summit. Based on the talks, he said, “It is clear to me that both the size of the deficit problem and the need for a package that can be enacted require all of the following: entitlement and mandatory program reform, tax revenue increases, growth incentives, discretionary spending reductions, orderly reductions in defense expenditures, and budget process reform to assure that any bipartisan agreement is enforceable and that the deficit problem is brought under responsible control. The bipartisan leadership agree with me on these points.”8

  The reaction was immediate and withering. His next news conference was dominated by the breaking of his pledge—the first question he faced was whether his endorsement of new revenue represented a “betrayal.”9 To his credit, President Bush did the right thing for the country when he agreed to make tax increases part of that year’s negotiations, and he defended his decision, at first, in just the way I would have argued it. “Good politics,” he said, “is rooted in good government.”

  Bush’s popularity plummeted in the months after he endorsed a tax increase, and Congress eventually passed a budget that did raise taxes on the wealthiest Americans. I thought then and still think that Bush could have ridden out the criticism from within his party, particularly because his numbers rebounded after the beginning of the Iraq war. But his reversal of his memorable pledge encouraged opponents to regard him as beatable, and he now faced an uprising on his right led by the unlikely candidacy of columnist Pat Buchanan. Bush defended the increases for a while, then got cold feet and began apologizing for them. It’s glib to say that reneging on his promise cost Bush the 1992 election, but it certainly weakened him by reinforcing questions about his convictions and demoralizing the Republican base. Any group of voters willing to seriously consider Pat Buchanan for the presidency is, by definition, desperate. All of that created an opening for Bill Clinton, and he made the most of it.

  Years later, I was a guest of President Bush at his library, and in a private moment I complimented him for having done the right thing on the budget that year. “It was,” I told him, “one of the most important steps toward arriving at a balanced budget.” I faulted him only for apologizing for it. “I know, I know,” he said, “but I was concerned that I’d have a hard time at reelection if
I didn’t back off.”

  History has treated Bush’s promise—and his reconsideration of it—harshly, but he demonstrated courage when he had to, and he put the country first. As the economy began to improve, and as Clinton took his own steps to bring down the deficit further, eventually the budget was balanced. Bush deserves his share of credit for that turnaround.

  My years in government have given me many satisfactions. There have been opportunities to lead, to fashion policy, to see ideas translated into programs, to build and defend the country that my parents chose. And each of my assignments has been different—and with different rewards. I must say, though, that there are few jobs better than serving as a member of Congress. In those years I had a staff that made me proud, my wife was my partner in our work, I was allowed to roam the landscape in search of ways to make a difference, and I had no boss but my constituents, for whom I worked happily. I made my own schedule and reported to no one. I never thought I’d want to do anything else. Until one day I did.

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