New Budget Gives Darman Chance to Leave a Legacy

Not long ago, shortly after one of a series of meetings on next year’s federal budget, President Bush was chatting with a small group of reporters. “Darman just walked out,” he said, “and when you see him walking out, I go through a period of about 60 minutes of gloom.”

Richard G. Darman, Bush’s budget director, often makes people here gloomy.

It is certainly understandable. As keeper of the books of a federal government still deeply in the red, it is Darman’s job to just say no to requests for higher spending. That doesn’t win him many popularity contests.

But the widespread animosity here to Darman runs deeper, back to his early days as a master of intrigue and infighting as a relatively obscure White House assistant to President Ronald Reagan. Over the last decade, as Darman has amassed power and influence, he has left in his wake a trail of aggravated colleagues and embittered political rivals.

Senate Majority Leader George J. Mitchell (D-Me.) was asked recently if Democrats resented Darman after last year’s budget and tax imbroglio. “You’re damn right!” he replied.

In the heat of Bush’s unsuccessful campaign last fall to force a capital gains tax cut through the Senate, Darman even turned on his own allies outside the government.

“We had a meeting at the White House and he lashed out at us,” said one of several business lobbyists supporting the capital gains effort. “What he essentially said was: ‘If we lose, it’s your fault.’ ”

For all that, however, Darman has emerged as the Bush Administration’s central player in domestic affairs, economic policy-making and congressional maneuvering.

Arrogant but intimately familiar with Washington’s ways, Darman is responsible for shaping much of Bush’s rather limited domestic agenda. Brusque but brilliant and witty--he charmed Bush during the presidential campaign by putting on a tank helmet while playing Democratic rival Michael S. Dukakis during a debate practice session--he will have the job of shepherding Bush’s budget through an increasingly restive Congress.

Facing Sternest Test

Now Darman, 46, is facing his sternest test. The budget the White House will present to Congress on Monday--Bush’s first full-scale presentation of his governmental priorities--is Darman’s vehicle for his far-from-hidden ambition to leave a lasting public legacy by improving America’s long-run economic prospects.

In a written introduction to the budget, aides disclosed, Darman characteristically confronts Congress with the demand “to be serious” and not fall into “Wonderland . . . fantasies” about spending the “peace dividend” on domestic programs or cutting Social Security taxes through a “superficially attractive proposal” advanced by Sen. Daniel Patrick Moynihan (D-N.Y.).

Adding fuel to the fire, Darman also goes after his critics by calling the federal budget under today’s political system “the Ultimate Cookie Monster,” a reference to the “Sesame Street” character who gobbles up every treat in sight. The budget’s “massive presence might be understood as little more than a compilation of cookies received, cookies crumbled, and crumbs spewed forth,” Darman says in the introduction.

Challenges to Congress notwithstanding, Darman had better get moving. Last year, the pragmatic Darman got off to a quick start by forging an unexpectedly strong alliance with White House Chief of Staff John H. Sununu, a hard-core conservative. Together they wielded a free-market influence over nearly all aspects of Administration domestic affairs.

But even Dick Darman, for all his legendary energy and guile, is finding it hard to overcome this Administration’s general policy inertia. And he barely made a dent in his central mission of closing the budget deficit.

“We will succeed at deficit reduction,” Darman declared with his characteristic hubris almost a year ago. “But if that’s all we do, we won’t have done much.”

Although Darman hardly deserves all the blame, it didn’t even come close to working out that way. Any hopes in 1989 of reaching a longer-lasting deficit-reduction compromise with Congress were dashed in the bitter partisan wrangling over Bush’s proposal to cut taxes on capital gains.

The stalemate that resulted was familiar. Congressional Democrats remained opposed to any serious spending reductions as long as Bush refused to back away from his “no new taxes” pledge.

Without a budget fix, Darman’s broader agenda for encouraging a stronger work ethic and less of a “buy-now, pay-later” mentality remains mostly empty rhetoric.

Still, the rhetoric is powerful. In his only major speech last year, Darman unveiled a harsh attack on what he characterized as the self-indulgent greed of the 1980s.

Implicitly criticizing the enormous federal deficits of the Reagan years, Darman accused Americans of being engaged in a “cultural now-now-ism.” Our “collective shortsightedness, our obsession with the here and now, our reluctance adequately to address the future” threaten the economic prosperity of later generations, Darman told the National Press Club last July.

“Like the spoiled ‘50s child in the recently revived commercial,” Darman added, “we seem on the verge of a collective now-now scream: ‘I want my Maypo; I want it NOWWWWW!’ ”

Darman, in a bit of shortsightedness of his own, played no insubstantial role in creating the deficits he now abhors.

Stockman Memoir

David A. Stockman, Reagan’s first budget director, in his book “The Triumph of Politics,” recalled a moment in 1981 when both he and Darman agreed privately that a political bidding war had pushed Reagan’s tax-cutting program out of control. Stockman asked Darman whether the threat of huge budget deficits justified an effort to stop the tax cut from passing Congress. According to Stockman, Darman replied: “Let’s get at it. We win it now, we fix it later.”

Although Darman has denied the exact quote, he has acknowledged that the statement accurately reflected his thinking at the time. Darman declined to be interviewed for this article despite repeated requests over a two-month span.

Despite the chinks in Darman’s own armor, there is no question that his beliefs, as expressed even earlier in a 1987 speech about America’s “leisure ethic” and “materialistic values,” spring from a deep well of puritanism in his own character. In a city of back-slapping, party-hopping political figures, Darman stands apart. He neither smokes nor drinks and only rarely socializes outside his family and friends.

And in a city where the revolving door carries most government officials into lucrative private-sector jobs at a dizzying pace, Darman stands out as one who has devoted most of his career to public service.

“Darman is a self-admitted workaholic who neither drinks nor smokes and seldom takes vacations,” said Jeff Bell, a conservative analyst of the political economy who heads the economic forecasting and consulting firm Bell Mueller Cannon here. “His view of the economic shortcomings of the American people appears to be that they should become a lot more like him.”

That seems on target with Darman’s own view of himself.

In a brief essay penned for his 25th Harvard College reunion last year, Darman mused on life with his wife and two sons in an “idyllic setting, overlooking the Little Falls of the Potomac. . . . The river works its way peacefully over the falls and riffles around a woodsy island through the Chain Bridge narrows and then on into the familiar wide mud-basin of Washington--a wholly different world.”

Darman added that he still asks “all the adolescent questions: Why does the river flow the way it does? Why does one move downstream and back? The allure of such simple questions is as great for me today. . . . The only difference seems to be that I’m now a bit more willing to settle for answers that seem simpler, less profound, sometimes even trite. But only a bit.”

Jeff Darman, a cousin who spent his early years growing up with Dick in New England, traces both Darman’s “demanding perfectionism” and a “certain kind of flamboyance” to his grandfather, whom Jeff calls “an extremely interesting man” who was the “elder statesman of the family.”

Dick’s grandfather, Arthur Darman, was a Russian Jew who escaped with his parents to the United States as a young boy in the 1890s. Joining a circus at age 14, Arthur Darman eventually settled in Woonsocket, R.I., and built a thriving wool business. He became a prominent civic leader and philanthropist whose love for entertainment and acting continued in his adult efforts to foster local theater.

Darman, who generally disdains talking about his family and his past, once offered Time magazine Washington correspondent and author Lawrence Barrett a rare insight into his roots:

“My grandfather was a perfectionist and made one of my father,” Darman recalled. “It was expected that I would succeed in everything I did. I expected it too. I don’t think it’s wrong for an individual always to think he must try to be No. 1 in performance. Anyway, that’s the way I lived.”

For all his brilliance and talent, Darman’s rise in Washington reflects in part his ability to attract the attention of powerful patrons, who have helped smooth his climb to the top. He was tapped from the bowels of the bureaucracy in the early 1970s by GOP patrician Elliot L. Richardson, then-secretary of health, education and welfare. Richardson took Darman with him as he went on to head the Justice and Defense departments in the Richard M. Nixon Administration. Similarly, during the Reagan years, Darman was James A. Baker III’s trusted right-hand man at both the White House and Treasury Department.

In those positions, the notoriously insecure Darman was always acutely conscious of his status. He hated it when anyone referred to him as simply a “Baker aide.”

A telling incident occured in September, 1985, at the Plaza Hotel in New York, where economic policy-makers from around the globe were gathered to put the finishing touches on a landmark economic agreement on the dollar. David Mulford, an assistant Treasury secretary, was sitting next to Baker going over some details when Darman, who as deputy secretary outranked him, returned to the room. Darman immediately tapped Mulford on the shoulder and forced him to yield his seat.

Now that he is much more on his own, Darman has tried to tone down his image of arrogance. After some news reports last year referred to the new “Charmin’ Darman,” his staff gave him a roll of the similarly named toilet paper.

But the transformation has been less than fully successful. He is still prone to insulting his staff, aides say, and some key lawmakers are still steaming over various miscues last year. Darman has been frequently at odds with Bush’s high-profile environmental chief, William K. Reilly, whom Darman once dismissed as a “global rock star.”

And when stories circulated about Darman’s wearing a gorilla suit at Bush’s birthday party, one economics expert who has dealt with him frequently gibed: “How could they tell the difference?”

“There’s no kinder and gentler Dick Darman,” said David Mathiasen, a career OMB official who left recently to join the General Accounting Office.

Better Control

Those close to Darman say he is learning to control his overbearing nature. “He still doesn’t suffer fools gladly,” said one top budget official. “I don’t think he was ever as bad as what they said about the old Dick Darman, and he’s probably not as good as the supposedly new Dick Darman.”

If Darman has left a healthy number of critics in his wake, he has won loud plaudits from many conservatives. They once suspected him of trying to undermine Reagan’s sweeping tax-cutting program and doubted that he would stick so closely to Bush’s anti-tax stance. But they doubt no longer.

“Put me down as a real Darman admirer,” said Sen. Phil Gramm (R-Tex.), probably the leading force in Congress for free-market economics policies. “He’s done a very effective job.”

And Jude Wanniski, a leading advocate of supply-side economics, thinks Darman did far better than he thought possible in pushing Bush’s capital gains tax cut through the House last year before it was stalled in the Senate.

“He’s been a real advocate of free-market views up and down the range of domestic policy issues,” Wanniski said. “And the main reason we’re likely to get capital gains (tax reduction) this year is because Darman was such a superman. I even sent him a picture of him as a hero in red pajamas and he faxed right back that Superman wore blue tights.”

For now, Darman’s principal challenge remains the task of bridging the wide gap between Bush’s professed support for a variety of worthy causes--such as education reform, environmental improvement and rebuilding Eastern Europe--and his reluctance to raise additional money to pay for them.

But if anyone can thrive in such an environment and make the best of it, it is probably Darman.

“Despite all the stories saying how smart Darman is, he really is smart,” said David Smick of Smick-Medley Associates, a well-connected Washington international economics consulting firm and publisher. “Unlike most people in Washington, he knows what he’s doing. My advice is: Never underestimate Dick Darman.”