The corrosive effect of the Bert Lance affair within the administration is seen in this privately expressed judgement by a member of Jimmy Carter's subcabinet: "This is the first real test to show just what kind of President he really is."
Since this assistant secretary had informed his colleagues two weeks earlier that Lance simply had to go as Director of the Office of Management and Budget (OMB), the "test" in this official's mind was whether President Carter had the toughness to fire the Cabinet's strongman. Such talk promoting the fall of big Bert Lance, not always in expression of sorrow, is widespread among administration officials.
But there is countervailing bittness elsewhere in the administration that a decent man who has not yet been shown to have committed one illegal act is being crucified by the press, aided by officials in the Treasury and other departments. Partisans of Lance, then, see a very different "test" for the President: whether he will play Harry Truman by defying the press and the growing consensus within his administration.
Lance's fall, which now seems inevitable, would deprive the administration of its invaluable "deputy President" and its principal link to the business community. Following recent setbacks for the budget-balancers, the scuttling of Lance would signal more federal spending. But beyond this, it would bequeath animosity and suspicion among those left behind in the administration. From many aspects, then the Lance affair is not only President Carter's first crisis but his first calamity as well.
Lance's closest friends and allies here are convinced the interest in Lance's private financial affairs was partially fueled by non-friends of Lance inside the administration, and their suspicions concentrate on the Treasury.
Hostility within the Lance camp focuses on John G. Heiman, the new Comptroller of the Currency in charge of the Lance investigation. Heiman, a former New York State banking superintendent, was pushed successfully for the comptroller's post by Blumenthal against Vice President Mondale's choice, who had wider support. Heiman is regarded as very ambitious. When Heiman's office labeled Lance's Aug. 5 press conference as ill advised, OMB officials thought the comptroller was shooting at Lance's lifeboat.
High officials in other departments, while in no way sabotaging Lance, shed few tears over his predicament. Middle-level liberals who want higher, not lower, federal spending perceive Lance as the linchpin of the balanced-budget policy and believe the President will loosen federal purse strings without the big, soft-spoken banker from Calhoun County, Ga., at his side.
Actually, Lance's policy has been eroding over the last month. He failed to trigger an all-out presidential economizing drive against the Health, Education and Welfare appropriations bill. The new welfare-reform plan, expected to boost spending by more than the advertised $3 billion, was another Lance defeat; preoccupied by personal difficulties, he missed the key July 37 presidential meeting to consider welfare options.
Ever since he learned on Aug. 5 about that Manufacturers Hanover memo appearing to link a personal loan to Lance with deposits from his Atlanta bank, the normally high-spirited Lance has been deeply depressed. Usually the most accessible of men, he spent days at his summer home in Sea Island, Ga., declining to take calls even from friends.
Although some White House aides and Cabinet members privately insist that Lance has done nothing illegal, they worry that public perceptions, fed by a midsummer, dog-days press campaign, have frozen against Lance. Moreover, when Democratic senators who weeks ago gave Lance a hasty clean bill of health return from the August recess, they will be anxious to balance their ledgers by going after him - if he is still around.
So only Jimmy Carter can now save Lance. The barely credible claim that the two old friends have not even discussed the problems seem true. Nor, at this writing, has the President solicited opinions within the Cabinet. His principal contacts on the question are senior aides Hamilton Jordan and Robert Lipshutz.
All of this points to the departure of Bert Lance, probably quite soon. Less obviously whenever Lance leaves, the administration will crry deep internal scars not likely to heal soon.