In the privacy of his Camp David retreat, President Reagan had made one of the most significant decisions of his presidency. Now, in the Oval Office, he was hearing the first critical reviews of it.
His best political friends were telling him.
"We can't hide from the reality of this," Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) said candidly at one point, according to one official who attended Tuesday's meeting between the president and the Republican congressional leaders. "To the extent that you don't do it in military cuts, we have to do it in entitlements."
It was one of those sessions that was spirited and frank but, as meeting-goers say, not necessarily fruitful. The Republican leaders pressed News Analysis News Analysis their case that the fight to control spending requires larger cuts in the president's increases for defense spending, from the standpoint of what is credible and what is do-able. This is, one argued, "the last opportunity" to prove that the Reagan administration is adamant about balancing the budget by 1984.
The president found the line familiar. His own advisers, budget director David A. Stockman and White House chief of staff James A. Baker III, had used virtually identical words the week before in arguing privately for larger defense cuts. But he wasn't moved then, and he wasn't moved now.
He had made up his mind at Camp David. At that mountaintop retreat--where Lyndon B. Johnson went to seek respite from the war, where Richard M. Nixon went to find a way out of Watergate, and where Jimmy Carter went to discover our malaise--Ronald Reagan had gone to sort his way through the central conflict of his presidency.
He had to choose between a budgetary reality that had become the driving force of his economic policy for the next four years and a true-believing military theology that had been the gospel of his stump speeches for the last two decades.
In the end, despite all the arithmetic and advice, despite the arguments of his advisers and the anxiety of the marketplace, Reagan just could not bring himself to make significant cuts in his own defense budget.
Out of a $1.6 trillion defense budget for the next five years, he could cut just $13 billion. Out of the more than $16 billion in total new cuts that his advisers told him was necessary for fiscal year 1982, he could trim his large planned increase for defense by just $2 billion.
It was one of the crucial decisions of the Reagan presidency, for its implications extend deep into the fate of the government's domestic programs and the president's political prospects. Reagan's minimal cut in defense spending will mean significant cuts (via delays in cost-of-living increases) in Social Security checks, pensions for veterans and retired railroad workers, and benefits for the elderly, the aged and the blind.
And this means, perhaps, a resurrection of image problems for a Republican Party that had been on its way toward dominance in politics. Reagan, who promised a "social safety net" for the "truly needy," has instead stretched the netstrings widely; now people keep falling through, as the Reagan safety net rescues mostly MXs and B1s and Tridents and neutron bombs.
The political imagery is not lost on the Republicans on Capitol Hill. They are understanding, but far from appreciative, of what their president has done.
David Stockman is sitting on the couch in House Republican Leader Bob Michel's office. Facing him are all of the Republican leaders of the House. Just months ago, he would have been there as their junior colleague, the young-and-bright-congressman-from-Michigan, sitting among his chamber elders. Today he is there as the president's emissary, which makes things quite different.
Stockman lays out the administration's case, at this Thursday meeting, for delaying the cost-of-living increases for Social Security and other entitlement programs. His onetime House colleagues tell him it won't pass. Stockman is talking fiscal policy--numbers; the Republican leaders are talking congressional policy--politics.
Says the director of the Office of Management and Budget: "I understand what you are saying, but . . . ."
Says one senior congressman: "I understand what you are saying, but. . . ."
It goes like that for most of 2 1/2 hours. Stockman tries to go on to other subjects, but the House Republican leaders keep bringing him back to Social Security et al.
"The atmosphere had a little bit of annoyance," recalls one source who was there. "It was more frustration at what the White House is putting on our table. It is not what the Republicans in the House want for lunch."
On Capitol Hill, there are Republicans who nurture the fervent hope that Reagan has been mainly going through a sort of political war-gaming with them, that the president figured all along that Congress would add to his defense cuts, so he deliberately announced an initial figure much lower than the one he is willing to accept as a compromise.
At the White House, they say this view misjudges Reagan. He proposed what he believes, they say. He may be forced to yield to the larger realities of Congress, but he did not propose a low defense cut as a strategic brush-stroke in the art of political compromise.
Reagan, meanwhile, misjudges those who have expressed doubts about the prospects of his economic policy.
In Denver on Friday, Reagan railed about "those Chicken Littles who proclaim the sky is falling." Reagan's doubters are crying not that the sky is falling but that the debt ceiling is rising. They fear that revenues have been cut so steeply, and defense spending is rising so rapidly, that prospects for the success of Reaganomics are far from certain.
The doubters include some of his most loyal Republicans on Capitol Hill. Plus some members of his own Cabinet and his White House inner circle, who doubt that the administration will come anywhere near its goal of holding the 1982 deficit to $42.5 billion. One Reagan Cabinet official concedes that, at least so far, Wall Street's conservatives are justified in their skepticism of Reaganomics because, without new steep cuts, the numbers just do not add up to a balanced budget in the forseeable future.
A number of steadfastly conservative, loyal Republicans lay a good part of the blame for today's fiscal/political straits at the feet of Defense Secretary Caspar W. Weinberger.
One conservative Republican senator observed, "I think Cap is getting a whole new lesson in the way outlays and authority figures work in defense spending. It is much different than when he was running HEW. It's a whole different kind of pipeline." With the spiraling cost of today's super-sophisticated weaponry, this year's military budget decisions have a huge multiplying effect in future years. Indeed, at the Pentagon, the budget pipeline is more like a cornucopia--it starts modestly tapered, but ends up a veritable horn of plenty.
As one White House official observed:
"If we are going to have a Cabinet government, at every Cabinet meeting there is something that should happen which doesn't happen. The president should start off by saying, 'You are my man in the department, not the department's man in the White House.' "