Dean Ruled From the Fiscal Center in Vermont

Soon after he won his first election as Vermont’s governor in 1992, Democrat Howard Dean summoned his party’s leadership to his Capitol office here and delivered a lecture worthy of any tightfisted Republican.

The financier-turned-physician-turned-politician sternly warned that whatever lofty goals the legislators had in mind -- expanding preschool education, providing universal health care or toughening environmental laws -- none of it would happen if voters did not trust them with their money.

“He told us that the No. 1 concern for Democrats was how we handled the public purse,” said former state Rep. Dick McCormack. “In many ways, that defined his whole administration.”

Now that he is leading the pack of Democratic presidential contenders, Dean’s gubernatorial record is facing intense scrutiny. Opponents, led by Rep. Richard A. Gephardt of Missouri and Sen. John F. Kerry of Massachusetts, charge that Dean balanced his state’s budget by scrimping on key social programs for old, needy and disabled Vermonters.

Dean and his defenders dispute these allegations, insisting that no benefits were taken from anyone while he ran the state for almost 12 years, and that overall, spending on social services increased by a third. Dean and his supporters say the criticism obscures the complex choreography of balancing a state budget and overshadows a record that left Vermont in better fiscal shape than most states in recent years.

“It is just not accurate,” said Sean Campbell, Dean’s former finance commissioner. “We are a state of 600,000 and we have managed to support social services at levels that are remarkable compared to other states. What John Kerry and Dick Gephardt need to do is look at what programs were in Vermont when Dean took over, and what programs were there when he left.”

The Vermont Constitution does not require a balanced budget. But starting with his determination to eradicate a $70-million deficit he inherited, Dean made economic stability his top priority. More than anything else, this focus on fiscal responsibility characterized his record.

Unlike the ideological presidential candidate who first distinguished himself by condemning the war in Iraq, Dean as governor was a pragmatist who ran his state with the blunt efficiency of a CEO. As a pro-business centrist, he was so out of step with the liberal Democratic majority in the Statehouse that he had to recruit a team of other legislative allies to make sure his budgetary goals would pass. To the consternation of many, he all but ignored issues such as civil unions for gays and lesbians as he steadfastly based decisions on the bottom line.

He demanded that department heads slice their own budgets. Sometimes, as a means of not-so-friendly persuasion, he threatened to sacrifice cherished programs, even in the areas that meant the most to him: children and the environment.

The former family-practice physician surrounded himself with a mostly female Cabinet that cynics dubbed “the nurses” because they so obligingly followed his orders. Often, Dean lapsed into lectures.

“He very much considered himself smarter than the rest of us,” said McCormack, an admirer. “You learned to live with that.”

With the governorship the most common path to the White House in recent decades, Dean’s executive experience offers a glimpse of how he might govern the country, said UCLA political science professor Richard Rosecrance.

“As president, he would more likely bring his style as governor than to approximate his style as candidate,” Rosecrance said. “The centrism that we have seen from him in Vermont is likely what we could expect from him as president.”

After four years in the state Legislature, Dean was serving as lieutenant governor when Republican Gov. Richard Snelling suffered a fatal heart attack in 1991. Dean learned of Snelling’s death while examining a patient in his office outside Burlington. He finished the exam and drove 45 minutes south to Montpelier.

In a state with two-year governor’s terms -- a legacy of the Colonial fear of tyrants -- Dean soon won election in his own right. The course he then struck was so relentlessly moderate that Democrats ribbed Republicans about “their” governor. Harlan Sylvester, his chief economic advisor, said Dean responded by sticking firmly to the middle.

“He made the far right and the far left irrelevant,” Sylvester said. “He just did it.”

But Dean knew if he wanted a balanced budget -- not to mention leftover funds for children’s issues and environmental protection -- he needed help. So he rounded up a handful of Democrats willing to buck their own party to support his fiscal agenda.

A local journalist dubbed these 15 or so state legislators the Blue Dogs, the nickname chosen by a faction of conservative Democrats in Washington about the same time. The Blue Dogs formed a coalition that championed Dean’s budgets by siding with Republicans.

“We were considered his enforcers,” said retired state Rep. Michael Flaherty. “We would meet with him periodically, go over the budget, go over the things that could and couldn’t be done -- and then we would carry the ball for him.”

From Snelling, Dean inherited what at one point was the country’s highest surcharge on upper-level state income taxes. Dean wanted it to end, but Democratic lawmakers moved to reinstitute the surcharge. Dean beckoned the Blue Dogs -- and prevailed.

“It was kind of scary, meeting those pale blue eyes of his,” recalled McCormack, who favored the tax. “I remember him saying, ‘Dick, for your sake, please don’t underestimate my resolve on this subject.’ ”

Dean also cut the state income tax twice, removed sales tax on most clothing, reduced long-term debt and established a rainy-day fund. Under Dean, Vermont’s bond rating also rose to the AAA level, the highest in New England.

But in battling with the Legislature, Dean came close to cutting out programs he cared deeply about, said Kathleen Hoyt, his former secretary of administration. Those proposals are at the root of many of the attacks on him now.

The state’s first prescription drug program for seniors, known as VScript, was covered until 2000 by federal funds. When the Legislature balked at increasing the state’s cigarette tax to finance VScript, “the governor suggested we cut it out completely,” Hoyt said.

The legislators relented, boosting the cigarette tax enough to expand the program.

Hoyt said that in the mid-1990s, Dean also made the decision not to increase state funds for aid to the elderly and disabled. Another year, he reduced the state’s contribution to the teachers pension fund. But that action did not diminish individual pensions awarded that year, Hoyt said.

“It was very much a give-and-take,” Hoyt said. “Sometimes he would propose a cut in a popular program that he knew the Legislature would not let get through so they would come up with something else.”

By far the most contentious issue to surface during Dean’s tenure was the nation’s first legislation allowing civil unions, or marriage-like status, for same-sex couples. The landmark 2000 law grew out of a state Supreme Court decision that required the Legislature to extend a wide range of rights and responsibilities to homosexual couples.

The debate lasted more than a year, roiling the small state. Dean stayed aloof, but pledged to place his name on any measure the Legislature produced.

“During that whole debate, Howard stood in the background. He never put his fingerprints on that bill, never once,” said Michael Vinton, a former Democratic state representative who was one of the Blue Dogs. “On the day of the signing [of a bill legalizing civil unions], my liberal friends were calling him Howard the Coward.”

But Vinton said that when dealing with the Legislature, Dean did not shy from confrontation. “If he didn’t like what we said on the floor, we got a little note passed to us: ‘The governor wants to see you,’ ” Vinton said.

Even when dressing someone down, Dean kept a cool detachment, Vinton said. “It was never personal -- never,” he said.

Grudges, in any event, do not play well in a small state where leaders and voters rub elbows daily in the grocery store, the post office or while pumping gas. Instead, partisan discord often is resolved in spirited hockey games featuring Democrats versus Republicans.

Dean was known on the ice for his “cut and thrust” technique, said Willard Sterne Randall, a professor at Vermont’s Champlain College. The same determination marked his style as governor, Randall said.

“Dean is a bulldog,” he said. “He keeps after things. He is driven, and he knows just what he wants.”