Give Reagan His Due - On Tax Reform and the Budget
Editor's Note: This piece originally appeared on Aug. 20, 1996.
Congress left town last week to the usual mixture of cheers and catcalls. The members and their families really should try to enjoy their August vacations, because September is going to be awful for them.
When they come back, with their elections just 60 days away, they have to face decisions on the basic federal fiscal plan for next year -- spending decisions that can make few voters happy but can no longer be postponed. Their only consolation is that they will get to put their final stamp of approval on the tax-revision bill that will be remembered as the major accomplishment of this 99th Congress.
If you ask yourself why Congress has done so well bringing off a massive and overwhelmingly constructive overhaul of the tax system but has bogged down so badly on the routine budget and appropriations bills, one answer leaps out. In the first case, Congress had the president's cooperation, but in the second it has been fighting against Ronald Reagan every step of the way.
No other explanation holds water. Chairmen Dan Rostenkowski (D-Ill.) of the House Ways and Means Committee and Bob Packwood (R-Ore.) of the Senate Finance Committee are astute politicians. They deserve the praise they are getting for bringing off the biggest redesign of the tax system since World War II. Along with such early flat-tax advocates as Sen. Bill Bradley (D-N.J.) and Rep. Jack Kemp (R-N.Y.), who intervened at crucial moments to keep the effort from failing, they negotiated the measure past all the traps that industry, economic, regional and ideological pressure groups designed to block it.
But no one, I think, would claim that Packwood and Rostenkowski are better legislative craftsmen or more diligent workers than the chairmen of the two budget committees, Sen. Pete V. Domenici (R-N.M.) and Rep. William H. Gray III (D-Pa.). Domenici and Gray forged agreements inside their committees on spending plans for the coming year every bit as sound and workable as the tax plans Packwood and Rostenkowski devised. Left to themselves, they could agree readily on the fiscal blueprint for next year.
The difference -- the crucial difference -- is that Reagan was aboard the tax plan, and he has blockaded the budget-spending blueprint.
A president cannot legislate. But he can either prepare the ground for the hundreds of small accommodations that are at the heart of the legislative process, or he can plant so many booby traps of his own that legislation becomes almost impossible.
Reagan set the stage for the September triumph on taxation with his own original proposal, 16 months ago. It was a bold and sweeping design, keyed
to the clear, economically sound and socially desirable principle that rates could be lowered dramatically for everyone if privileged persons, corporations and categories of economic activity were made to pay their fair share of the tax burden.
Behind all the technicalities, Reagan was laying down a powerful principle that propelled the tax legislation past all the predictable roadblocks: fewer breaks for the privileged, lower rates for everyone.
In the budget he submitted to Congress last February (as in its four predecessors), Reagan did exactly the opposite. His budget was not only false in its economic assumptions and spending calculations, it was flawed in its fundamental concept.
Instead of saying no to special privileges, Reagan actively sought privileged status for his cherished military buildup and the politically popular Social Security benefits. Because of their size, protecting these two categories of spending dictated politically impossible and socially objectionable reductions in unprotected domestic programs -- which Congress had to reject.
Another great difference: where Reagan properly laid down the principle that the tax bill should be revenue-neutral, neither raising nor lowering
the overall federal receipts, his budget once again proposed not fiscal neutrality, but massive deficit spending. Not once since he became president has Ronald Reagan come close to suggesting that the people of this country should pay for the government services, defense and domestic, he has recommended. Not once.
Sometime in September, there will be a tax-bill signing ceremony at the White House, where Reagan, Rostenkowski, Packwood, Kemp, Bradley and others will praise each other for what they have done. And all through the month, the White House will be criticizing Congress as it struggles fitfully -- and probably futilely -- to untangle the budget mess.
Please remember that Ronald Reagan is just as deeply -- and vitally -- involved in the budget stalemate as he is in the tax-bill triumph. He made the tax victory possible. And he also made a budget fiasco inevitable.