December 1980: In a memorandum co-authored with Rep. Jack Kemp (R-N.Y.) that he leaked to the press Stockman warned: ''The momentum of short-run economic, financial and budget forces is creating the conditions for an economic Dunkirk during the first 24 months of the Reagan administration.'' The memo called for sweeping cuts in the federal budget; it became a significant part of Stockman's application for the job he craved and -- on Dec. 11 -- got director of Reagan's Office of Management and Budget.
May 1981: Stockman's first big political mistake: a proposal to reduce Socail Security benefits for future retirees, and particularly for those who retire before age 65. Stockman said such cuts were needed to prevent insolvency of the program -- ''the most devastating bankruptcy in history'' -- which he said ''will occur on or about Nov.3, 1982.'' TheSenate quickly repudiated the plan, and the White House then abandoned it, but Democrats gained 26 House seats in the 1982 elections, largely on the strength of their promise to save Social Security.
July 1981: Stockman's finest moment: the House passes ''Gramm-Latta,'' a tough budget measure forcing historic cuts in many domestic spending programs -- cuts considered impossible just months earlier.
September 1981: Stockman and White House chief of staff James A. Baker III orchestrate the first of a series of efforts to persuade the president to make significant reductions in the planned defense buildup -- $40 billion over the next three years. But Defense Secretary Caspar W. Weinberger prevails, persuading Reagan to cut only $13 billion over three years instead.
November 1981: Stockman's darkest hour: a profile of him by William Greider appears in The Atlantic, quoting the budget director as flatly contradicting the basic tenets of ''Reaganomics.'' For Example:
*''I've never believed that just cutting taxes alone will cause output and employment to expand.''
*''Supply side is 'trickle-down' theory.''
*''Kemp-Roth was always a Trojan horse to bring down the top rate.'' In the subsequent uproar, Stockman offers to resign, but after thinking it over, Reagan declines the offer. Stockman tells the press that he had been to see the president, and that the visit was ''more in the nature of a visit to the woodshed after supper.''
May 1982: Stockman wins an important victory over his boss' tax-cutting instincts, forging a new budget plan with key members of Congress that includes tax increases totaling $95 billion over three years. He considered the new taxes crucial to avoid yawning federal deficits.
1983-84: Stockman's quiet years, spent working the budget through the computers he had modified extensively at OMB, and fighting backstairs for new policies to reduce what he called the ''structural'' deficit built into the federal budget. In February 1984, he tells Fortune magazine that there will be no more budget cuts that year because of the impending election -- a poignant admission of his failure to solve the budget problem.
February 1985: Back in the headlines again with a born-again candor, Stockman -- perhaps already thinking about his depature from government -- tells a Senate committee: ''Institutional forces in the military are more concerned about protecting their retirement benefits than they are about protecting the security of the American people.'' But Reagan's new budget proposes no cuts in military pensions.
June 1985: Stockman tells the board of the New York Stock Exchange. ''It is obvious enough that to close this threatening $200 billion budget gap we must either massively cut spending or raise taxes by large, unprecedented magnitudes -- or, by the lights of some, enact a sweeping mixture of both . . . If the SEC had jurisdiction over the executive and legislative branches, many of us would be in jail.''