Clinton’s Plan: Time for a Deal

With victory on its deficit-reduction plan in hand, the Clinton Administration began to hear strange sounds emanating from Washington’s power corridors--faint echoes of praise for finally getting its act together. Not yet a roar, and with big questions about the political wisdom of the plan, Washington at last began to give some credit to the gang that couldn’t shoot straight. With this victory, however close, Bill Clinton has put his spring of discontent behind him. The Clinton presidency has come of age.

Do not let cynics underestimate the magnitude of this legislative victory. It is a huge tax increase with painful cuts in social programs passed amid voter discontent so severe as to frighten the most seasoned legislators. It passed with no, repeat no, bipartisan support. It passed in a Senate where 21 Democrats face reelection (compared with 13 Republicans), several of whom are in real political trouble back home. It passed despite the worst press bashing a President has received since Richard M. Nixon’s Watergate years. It passed in the House late Thursday after a tumultuous debate, underscored by some of the most painful arm-twisting in that chamber’s history--and then by only two votes, coming from people who had voted against the package only weeks earlier.

So, you ask, how could a President whose political-capital account looked like a late ‘80s Texas savings-and-loan balance sheet do it? The answer can be found in a combination of factors:

Clinton is, if anything, a quick learner. After the Republicans beat him badly on his economic stimulus package, Clinton and his people licked their wounds and learned valuable lessons: don’t get on the defensive; stay focused;use the power of presidential largess, and know your opponents’ game plan.

For most of the spring, the Republicans, led by Senate Minority Leader Bob Dole of Kansas, had Clinton on the defensive. The old saw “tax and spend” still had a few strokes to it. The stimulus package helped the Republicans prove at least the “spend” part of the mantra. The package was rife with dubious spending proposals, many of them political payoffs to big-city mayors who helped Clinton get elected. (Remember how the GOP used the recreation center/swimming complex in South Los Angeles to make the point?) The public never bought into the Clinton Administration line that this package would create jobs.

So the short-term battle won by the Republicans over the stimulus package did a great deal to help Clinton win the larger battle over his deficit-reduction package. The “tax and spend” argument got old fast. The public began to ask the Republicans, “If not this, what?” Something had to get done. So, when the Republicans had Clinton on his heels, the public waited for the alternative. It turned out to be a joke. The various Republican “alternatives” never had credibility. They all promised no new taxes and real deficit reduction. The public didn’t bite.

Dole & Co. forgot that the public had heard this in the Reagan years. Back then, they bought into the supply-side concept that lower taxes would mean lower deficits. By the ‘90s, they realized they’d been had. The middle class saw little improvement in their own lives, massive gains for the wealthiest 2%, and a deficit so out of control that their children’s future was in jeopardy. So they listened one more time to Dole--heard the echoes of Ronald Reagan--and said, in effect, kiss off.

It was the opening Clinton needed. Putting travelgate and haircuts behind him, Clinton sensed the public skepticism toward the GOP alternative and went on the offensive. Sure, he said, no onewants new taxes, but the deficit needs to e controlled and, yes, he got the message and agreed to some real spending cuts, even when directed at his base (Medicare cuts and higher Social Security taxes).

Credit George Stephanopoulos and David R. Gergen for keeping the President focused on the campaign for his program--even at the G-7 meetingin Tokyo. Clinton used the gathering as a platform to sell his deficit-reduction program. Jobs, he said over and over. It’s time to go forward, time to make the wealthy pay. Sweet music to the electorate back home. His daily schedule for weeks now has continued to keep him focused on the campaign to pass the package. It’s the economy, stupid!

Through it all, Clinton & Co. knew the GOP game plan. After all, Republicans had shown their cards during the stimulus package debate. Most important, the Administration knew it would have no Republican votes come judgment day. That made targeting easier.

The Republicans focused their attack on the BTU tax, a tax directed at the middle class. After a campaign promise by Clinton to cut taxes for the middle class, this was a juicy target. Here the GOP had Democratic allies from oil-producing states. Sensing that the BTU could bring the package down, Clinton let his allies in Congress, specifically Rep. Dan Rostenkowski of Illinois, move to a gasoline tax, while the whole time saying publicly that he still wanted an energy tax.

Finally, Clinton knew he had to cut deals with wavering Democrats. At some point in every President’s term, he learns that political deals, no matter how offensive to lofty policy goals, are needed. I remember my White House years as chief lobbyist for the Panama Canal Treaties. My President, Jimmy Carter, hated political deals. You proposed them at your own peril. But needing six to eight votes and being seven short forced even Carter to recognize the need to deal. As a result, a few selected states were rewarded with presidential largess. Which states? The states with seven votes, stupid.

And so, when the time to deal came, Clinton played. To Dennis DeConcini of Arizona--a cut in proposed taxes on wealthier Social Security recipients. Ever notice the average age of shoppers in Scottsdale, Ariz.? To liberals in both the House and Senate--a further shot at the wealthy in order to restore some cuts in Medicare. The rich still aren’t paying their fair share? OK, let’s make their tax hikes retroactive to Jan. 1. They deserve it. To Herbert Kohl of Wisconsin--a cap on the gas-tax increase at 4.3 cents. To conservative House Democrats--a commitment to hold a congressional session in September to consider more spending cuts. Back to DeConcini (a crucial vote after David L. Boren of Oklahoma jumped ship)--a Rose Garden executive order signing ceremony committing tax increase revenues specifically to deficit reduction. Finally the last hold out, Bob Kerry of Nebraska--a commitment to find additional cuts before the end of the fiscal year.

Curiously, the last bit of help Clinton needed to put the plan over the top came from the great whiner himself, Ross Perot. Perot spent the last several months and several million dollars attacking the Clinton plan. Finally, last weekend the press (credit mostly Tim Russert, David Broder and Al Hunt on “Meet the Press”) refused to buy Perot’s usual glib bull and demanded specifics of Perot’s alternative. It was laughable. The little guy had no clothes and no plan, giving Clinton the chance to go on national television and make the political case that it was his, Clinton’s, plan or nothing.

The country wanted action on the deficit--though still hated the idea of more taxes. The Republicans only offered more gridlock, Perot offered more hot air. Clinton had a plan--however flawed. The climate was right for the Democrats. They couldn’t let Clinton fail lest they be accused of business as usual. They will rise or fall together. If the economy gets better and the deficit is indeed cut, Clinton and his colleagues will be rewarded. If not--well, we’ll know next November when the voters cast their vote.