Reality Check

For those who think Congress and the White House have been seized by hustlers and cowards, the news in “Mirage” is that a few brave public servants have been trying to balance the federal budget since the era of burgeoning deficits began in the early 1970s, only to be punished mercilessly for their efforts by political opponents and an ungrateful public.

In an era of blossoming budget entente, this volume’s subtitle may seem wildly pessimistic. Yet even after the historic budget agreement this spring between President Clinton and Congress, the White House and GOP leaders began edging backward toward their accustomed redoubts--Democrats accusing Republicans of expecting too many tax cuts and Republicans accusing Democrats of trying to shoehorn their social agenda into the budget negotiations. While for now both parties have found it in their interests to act like deficit hawks, they still disagree harshly about the role that the federal government should play in American life. Regardless of whether the budget agreement holds, and most observers believe that it will, the account of political stalemate in “Mirage” is a vivid reminder that business as usual in Washington, especially as it relates to the budget, is typically no business at all.

George Hager of the Congressional Quarterly Weekly Report and Eric Pianin of the Washington Post have spent years covering Washington’s budget wars. Their account of political dealings reveals, in dispiriting detail, the “hopeless cycle of revenge” that has prevailed in Washington ever since the budget deficit became a hot issue during the 1980 election. Yet this book provocatively places the ultimate blame on the voters themselves rather than politicians.

Although the complexity of the material sometimes forces this account to meander, it is rich in anecdote and drama. Highlights include thumbnail sketches of Bob Dole, Senate budget committee chairman Pete Domenici and House chairman John Kasich. Hager and Pianin praise Dole who, out of a bedrock sense of Midwestern fiscal prudence, worked “as hard as anyone else in Washington to drive deficits down, repeatedly taking enormous political risks that finally blew up in his face.” Try as Dole and other deficit hawks would, “Serious efforts to reduce the deficit seemed to bring only woe.”

To battlefield scribes like Hager and Pianin, the carnage looked different at the front from what most Americans saw on their television screens from the luxury of their living rooms. Do you think, for instance, that Ronald Reagan was a fiscal conservative? Check again: In 1981, still flush with victory after defeating Jimmy Carter, Reagan put defense and entitlements such as Social Security and Medicare--68% of the budget altogether--off limits to his own administration’s budget chief, David Stockman, who believed that reducing these big-ticket items held the key to fiscal responsibility. A Domenici aide called Reagan’s gesture that “immense, inconceivable ------up, that terrible political error.” (Then in 1985, he flip-flopped and scuttled a suspension of Social Security cost-of-living hikes for which Dole, his Senate leader, had fought and bled prodigiously.)

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With Social Security expected to face red ink within 14 years and with the deficit expected to be $400 billion by 2070 (four times the current federal deficit), we may yet rue the two times when the old cowboy blinked first and caved-in to big government. Reagan did, somewhat anomalously, inspire a new generation of conservatives, some of whom may be willing to assay the Social Security crisis before retiring baby boomers bust the system wide open. You remember how George Bush broke his “read my lips” pledge of no new taxes? To the authors, Bush’s budget deal in 1990 was a “towering achievement” that was hidden from history by the fiscal impact of the savings and loan crisis of the late 1980s and the 1990-1992 recession.

You think Newt Gingrich is a tough guy? Only when it comes to moderate Republicans. His opportunistic repudiation of the 1990 deal helped destroy Bush--for whom criticism from the right for breaking his “no new taxes” pledge was more damaging in his 1992 reelection bid than criticism from the Democrats--and propel the Republicans toward their 1994 triumph in the House and Senate. But when Gingrich sits down with Democrats to talk about the budget, his colleagues fret. During the 1995 Clinton talks, which ended in a government shutdown that the president exploited to the hilt in the 1996 campaign, one senior Republican said, “[Gingrich] should never be involved in a negotiation. He’s just too willing to trust the other guy and give too much. Newt will give, give, give, give, give.”

You think the speaker of the House and his troops were out to destroy Medicare in 1995? Hager and Pianin believe that “from a strictly good-government, balance-the-budget point of view, the Republicans were right about Medicare reform. . . .” But if they were right policy-wise, they were wrong politics-wise because Democrats would savage them for their proposals in the 1996 elections--just as Republicans savaged Clinton for his tax increases in 1994. In each case, the authors argue, Washington was playing by the iron rule of deficit politics: “When you’re in power, vilify the deficit; when you’re out of power, vilify the other guy’s solutions. Cynical and irresponsible? Of course. But it works.”

While “Mirage” is a useful primer on the history of deficit spending, it fails to provide a direct and detailed answer to the simple question, “Why can’t each agency be given just a smidgen less each year--3%, maybe even 1% less?” Along with the politicians they admire, Hager and Pianin abandon the hunt for a simple answer and are content to portray the interlocking smidgen less each year--3%, maybe even 1% less?” Along with the politicians they admire, Hager and Pianin abandon the hunt for a simple answer and are content to portray the interlocking interests, procedures, checks and balances that make enacting the simplest cut a Sisyphean task.

It may sound astonishing, but that’s how most Americans want it. Last year, a Democratic president and a Republican Congress were reelected. Then, this February, asked in a Los Angeles Times poll how much progress they thought government would make solving major problems, 85% of respondents answered “only some” or “not much.”

And so the culprits, conclude Hager and Pianin, are you and I and everyone else--a population that wants low taxes, balanced budgets, big government services and divided government all at the same time. This ambivalence keeps fooling responsible politicians into trying to balance the budget, only to get their hands slapped when their opponents incite whatever segment of the public comes closest to losing something in the process.

The lesson of “Mirage” is that, so far, deficits matter only when people and politicians decide that they do. As Hager and Pianin note, a deficit results in higher interest rates and a higher cost of debt services. But with interest rates still acceptably low and the economy strong, who cares? So long as voters capriciously demand a government that is simultaneously generous and frugal, politicians may freely wage their internecine ideological battles. With 50 cents of every budget dollar now going to support the massive, teetering postwar entitlement system, Rome may yet burn or, rather, drown in red ink.

Will we rally in time? If we do, it will only be because courage was exhibited both by the leaders and their disciples. “Mirage” leaves the frightening impression that democracy’s most dangerous flaw is that, in championing what people say, it is often impossible for politicians to communicate to those same people what they desperately need to hear.