First of four articles

In early August 1988, Richard G. Darman got his first serious look at a draft of Vice President Bush's upcoming speech for the Republican National Convention. It contained the now-famous campaign promise: "Read my lips: no new taxes."

For Darman, who aspired to be budget director in a Bush administration, such a pledge would be preposterous. It was Darman's view that Bush, if elected, would surely need the option of new or increased taxes because of the growing federal budget deficit.

Darman immediately told speechwriter Peggy Noonan and media consultant Roger Ailes that such a pledge would be "stupid and irresponsible," according to sources and participants in the decision-making about Bush's speech. As the designated editor, Darman struck the phrase from Noonan's draft.

Noonan and Ailes protested. The bold pronouncement was central to refashioning Bush's image and changing the perception of him as weak and loyal to the point of subservience.

"The Clint Eastwood factor," said Ailes, explaining that they were taking their "Read My Lips" cue from the actor's tough-guy "Dirty Harry" movies.

But image-building and colorful speechwriting had to have their limits, in Darman's opinion. Why lock Bush in with a categorical pledge?

Thus began a week-long tug-of-war over the pledge, which became a defining theme of Bush's 1988 campaign. Bush's position on taxes has become a central issue in his presidency since he broke the pledge and signed a budget deal with Congress in 1990 that included tax increases. This year, in the 1992 presidential campaign, he renounced the deal and labeled it a "mistake."

This series of articles will examine the philosophy and actions of Bush and his senior advisers as they made decisions about taxes, spending and economic policy, from the 1988 campaign to this year.

Noonan mentioned the debate over the pledge briefly in her 1990 memoir, "What I Saw at the Revolution: A Political Life in the Reagan Era." She said Bush aides, whom she didn't identify, kept deleting the phrase "on the grounds, I believe, that lips are organs, there is no history of presidential candidates making personal-organ references in acceptance speeches."

But there was much more to it, according to six sources who have provided this account on the condition they not be named.

A ranking administration official, recalling the concern over whether to make the 1988 pledge, said recently, "People brought this up at the time, said, 'You know, if you make a statement like that, how are you going to govern?' It was talked about."

This official said the phrase made for "good politics. Got to get elected. . . . Looking back on it, you can make the argument he clearly didn't need it, didn't have to say it, would have still won.

"He was 17 points down {after the Democratic convention}. The people were looking for the home run, they were looking for the life raft. Things were not good at the time he made that speech. So it had to be a different type of speech. It had to be definitive, draw the line."

Said another source, "It was the irresistible momentum of the phrase."

In late 1986, hoping for his party's 1988 presidential nomination, Vice President Bush began establishing his public position on taxes. Lee Atwater, a hardline, hardball conservative in charge of Bush's still-unofficial campaign, believed that Bush and other moderate Republicans had lost the nomination to Ronald Reagan in 1980 by being outmaneuvered on taxes. Atwater wanted Bush to stake out an anti-tax position by signing a formal anti-tax pledge put out by a group called Americans for Tax Reform.

Atwater was backed by a young Bush staffer named James P. Pinkerton, who espoused the "supply side" economic theories that were the foundation for lowering income tax rates in the early 1980s under President Reagan. In internal discussions, Pinkerton argued that signing the pledge "would put steel in Bush's image" and take away the anti-tax thunder of then-Rep. Jack Kemp (R-N.Y.), at the time considered Bush's chief rival for the Republican nomination.

"I don't want to sign," Bush declared, according to a participant's recollection of the discussions. Another participant said Bush rejected it as too gimmicky and bad policy, expressing concern that it might tie his hands in the future.

Atwater and Pinkerton persisted. They drafted a letter for Bush to send to Rep. Robert K. Dornan, a conservative California Republican and leading anti-tax advocate who had asked Bush to sign the pledge. Bush's reply, dated Jan. 6, 1987, stopped short of an unequivocal promise. "As I've said before, I've pledged to fight for holding the line on raising tax rates," he wrote.

His advisers kept pushing him. In the fall of 1987, before Bush officially announced for the Republican nomination, they revisited the tax issue. What should be his exact position?

Robert M. Teeter, Bush's pollster, was cautious. He had worked for gubernatorial candidates who had made no-tax pledges and then felt compelled to renege after they were elected. Teeter opposed any categorical, four-year commitment, sources said.

But Atwater and Pinkerton's argument that Bush needed to counter Kemp's challenge from the right won out. When Bush announced his candidacy on Oct. 12, 1987, he said: "I am not going to raise your taxes -- period." Campaign literature repeated the phrase verbatim.

Within 48 hours, however, Bush was back to qualifying his position. "What I have said is if I were convinced that all the spending that could possibly be constrained or cut had taken place, then and only then would I consider a tax increase," he said in a CNN interview.

By early 1988, on the eve of the crucial New Hampshire primary, Kemp's candidacy had faded and Senate Minority Leader Robert J. Dole (R-Kan.) had emerged as Bush's main rival. Bush campaigned as the anti-tax candidate and questioned Dole's commitment to low taxes in television advertising that many of his strategists felt helped him win the New Hampshire vote.

Craig Fuller, Bush's vice presidential chief of staff, was wary about carrying the strategy too far. Between those on Bush's staff concerned primarily with governing and those concerned with getting elected, Fuller placed himself in the governing camp.

Fuller did everything he could to steer Bush away from signing a version of the no-tax increase pledge that had been circulating in New Hampshire. He saw no reason for Bush to lock himself in, and feared that signing it would encourage other interest groups to demand signed promises on issues such as abortion.

Publicly, Bush advisers dropped hints that Bush's position was not set in stone. Michael J. Boskin, a Stanford University economist working with the campaign who later became chairman of Bush's Council of Economic Advisers, said in a March 1988 published interview, "Bush won't propose a budget with a tax increase, but he's a realist. He knows that ultimately he will be in a bargaining situation with Congress."

The pattern of hedging continued until the August convention. Bush repeatedly said he was "hardline" against tax increases, but on July 18, 1988, in an interview with editors and reporters of The Washington Post, Bush left the door open again. If his assumptions about economic growth, inflation and interest rates were "valid," he said, a tax increase would be "uncalled for." But he would not rule it out.

So when Noonan began crafting Bush's acceptance speech, his public position on taxes was laced with ambiguity. On loan from the Reagan White House, she didn't know Bush that well. According to a source who spoke with Noonan later, Bush expressed uncertainty in their get-acquainted sessions about what to say in his convention speech.

During one meeting, according to this source, Bush told Noonan and others that he was awash in advice about what to say. Some advisers said stand up, others sit down; some said take off your glasses, others put on your glasses.

One participant recalled someone suggesting to Bush, "Be yourself."

Bush turned to Noonan, according to this source's account, and said, "Oh Peggy, maybe that's the problem."

So Noonan's goal was to leave no doubt about Bush's position on taxes. In her book, Noonan attributed the origin of the pledge to Kemp, whom she had quietly supported in the early primaries.

"Jack Kemp told me, Hit hard on taxes. Bush will be pressured to raise them as soon as he's elected, and he has to make clear he won't budge, " she wrote in her book, and she transformed that advice into the "Read My Lips" phrase.

When Noonan's draft began circulating in early August to senior campaign officials, James A. Baker III was preparing to take over as campaign manager. Aware of Bush's uncertainty about what to say, members of the Bush team were vying for control of the manifesto that would provide the major themes for the fall campaign. Baker assigned Darman, his longtime protege and deputy, to act as supereditor and balance these many competing interests.

The informal speech committee consisted of Darman, Noonan and Teeter. Ailes, Fuller and others weighed in regularly, too.

Noonan hated editing by committee, fearing her work would become a string of unrelated notions. She saw "Read My Lips" as a sure-fire applause line. "Whatever you guys do," she told Darman and Teeter, "don't screw with these lines."

In her book, Noonan gave Darman credit for stitching together the parts and ideas of the speech. "It was Darman who was the key to the process, Darman who'd bore in and find the weakness in the word, the soft point in the sentence. . . . He saved me from much trouble, and saved things others didn't understand."

Noonan said nothing in her book about Darman's adamant opposition to the "Read My Lips" pledge. But according to other sources, Darman never changed his view that such a promise was irresponsible.

During three days of intense discussions in Teeter's Washington office, these sources said, Darman insisted that the group look at the numbers in the federal budget, annual deficits of nearly $200 billion "as far as the eye can see" in the memorable phrase of former Reagan budget director David A. Stockman. As Stockman's closest associate in the early 1980s, Darman became convinced that the federal budget could not be balanced on spending cuts alone.

The deficits had become a drag on the whole economy, Darman continued, and the next administration would have to chart a path out of the red ink with a mix of large spending cuts and small tax increases. Darman said this approach would not fundamentally alter the lower income tax rates that Reagan had pushed through Congress.

Darman had watched Reagan, who had the reputation as the premier anti-tax president, raise taxes a dozen times. Each time, Reagan masterfully convinced the public that he had been dragged into it kicking and screaming.

Darman told others that he doubted that Bush could carry off a needed tax hike so gracefully, especially if he pledged the opposite in a primetime speech. And the theatrics of mimicking Clint Eastwood would only increase the chances that the line would be remembered and come back to haunt Bush.

Besides, Darman argued, such a promise was unnecessary. Voters clearly viewed Bush as much less inclined to raise taxes than his Democratic opponent, Massachusetts Gov. Michael S. Dukakis.

Ailes, the blustery and direct image-master, did not have much patience with Darman's arguments. "Read My Lips" was great, Ailes said. He had used a similar line ("watch my lips") when he was advising Iowa Republican Charles E. Grassley's successful 1980 Senate campaign. "It's the best line in the speech," Ailes told the others.

Teeter dropped his earlier opposition to the pledge, sources said. For all practical purposes, Teeter felt, Bush had already pledged not to raise taxes when he announced his candidacy. "Read My Lips" was just a dramatic restatement of what he had said before. And the speech had to be a home run.

Fuller, worried about the practicalities of running the government, sided with Darman. A no-tax pledge might have to be discarded in the face of governing circumstances yet unforeseen. He opposed it.

Atwater, who had become morose and disengaged since Baker had supplanted him as campaign manager, was leaving it up to Ailes and Noonan, who had more direct contact with Bush on the drafting and actual language.

As the debate dragged on, Bush joined the discussion at one meeting. Some in the room saw it as an opportunity to win Bush over, having observed him over the years as easily swayed by a good argument. Ailes told Bush, "Goddamit, you got to say something definite in these speeches. I mean people want something definite. Say something definite. If this is it, say it."

According to one participant's recollection, Bush said, "I don't know. You know, do we really want to?"

Bush's uncertainty allowed the debate to continue.

In subsequent discussions, Darman mounted new attacks on the Clint Eastwood approach. It wouldn't work, he told Noonan and Ailes. It was fine for Reagan, the man on horseback. From Reagan's mouth, it had seemed plausible and natural. But Eastwood from Bush would sound tinny and hollow. He would be trying to be someone else.

Precisely, Noonan and Ailes argued back. Bush had to present himself as someone different from the loyal, forever accommodating Reagan vice president, they said. The wimp image had to be buried.

Ailes had one more argument. A campaign was theater, Ailes's specialty. Looking at Noonan's draft, where she had highlighted the probable applause lines, Ailes issued his professional evaluation of "Read My Lips".

"Boys," Ailes said, "here's your sound bite." Of course, he added, if you want the networks to pick out some other "piece of crap" that we don't care about, then turn it over to those network reporters, producers and anchormen. Use the line, and it was guaranteed to make the nightly news shows, just enough out of character for Bush to be a magnet for coverage.

Darman said this could turn out to be more than election-year rhetoric; it could have consequences not only for Bush but for the entire American economy. Wielding the power that Baker gave him, he deleted the offending line once again.

Noonan refused to give up. In her next draft, she restored the phrase. Noonan did not reveal the intensity of the struggle in her memoir, saying only, "I kept putting it back in. Why? Because it's definite. It's not subject to misinterpretation. It means, I mean this."

Darman wondered why a speechwriter was, in effect, setting policy.

Everyone involved in the process knew that the key arbiter could turn out to be Baker. He had been a reluctant recruit to run Bush's 1988 campaign, having managed Bush's 1980 campaign and then moved on to positions as Reagan's chief of staff and treasury secretary. But as Bush trailed Dukakis in the summer polls, Baker felt he could not refuse his old friend's urgent request to take over the campaign.

Baker had been telling associates that he expected Bush to lose, to fall victim to what he saw as an inevitable cycle that would bring a Democrat to the White House after eight years of Reagan. Bush could only win if the Democrats ran a bad campaign or if the Republicans ran an extraordinarily good one, Baker had said.

The prime time acceptance speech was one opportunity for a dramatic intervention. But Baker seemed reluctant to enter the fray over "Read My Lips," according to participants in the debate. It seemed to Fuller that Baker was keeping his own counsel or sharing his views only with Bush. "We never knew where he stood. He was a blank," Fuller has said.

Baker probably could have killed the pledge if he had wanted to. Baker appeared to have a free hand to run the campaign as he saw fit. But Baker seemed content to leave the matter to Darman.

Without Baker, however, Darman's chances of prevailing were slim. He had failed to convince Noonan, Ailes or Teeter. He had no chance with Atwater. And Fuller, Darman's only ally, was losing influence with Bush.

A direct appeal to Bush was unlikely to work. At this point, according to two sources, Bush did not entirely trust Darman. For years Bush had told others that he suspected Darman had leaked unfavorable information about him during the Reagan presidency.

Darman's last hope was to get Baker to intervene. When Baker didn't, Darman concluded that his mentor was "100 percent pol" when it came to running the campaign.

Darman also realized he had come face-to-face with a personal quandary. On the one hand, he was the expert, the former deputy treasury secretary, the close Stockman associate who understood that a no-tax pledge would only impede efforts to fix the federal budget. But he also knew that he could carry his protest only so far without jeopardizing his desire to serve Bush in the future.

At one final gathering that included Bush, Darman raised his objections only mildly, knowing that he was on semi-probation with Bush.

In his gut, Bush didn't like high taxes or big government; opposition to taxes was a central tenet of Reaganism and it had helped Bush inoculate himself against Kemp and beat Dole; and his most savvy campaign strategists were all for it.

Nearly a week before his convention speech, Bush made up his mind: "Read my lips: no new taxes" would stay.

Now Bush had to learn how to deliver the line. It didn't come naturally. During rehearsals, he rushed through the six words without pausing for the necessary beats, especially the double beat after "Lips." This botched delivery ruined the impact.

"He speaks in gusts," Noonan told someone later.

Ailes felt that Bush never related to the specific meaning of individual words, accounting in part for speech patterns that seemed odd. Aides took the speech text and the cuing material and wrote in the proper pauses after each word so it would come out with at least a semblance of the Eastwood flare.

Bush was to say, "The Congress will push me to raise taxes, and I'll say no, and they'll push, and I'll say no, and they'll push again. And all I can say to them is:

"Read (pause) My (pause) Lips (longer pause): No (pause) New (pause) Taxes."

Ailes proved correct: The six words were picked up as the key sound bite. Focus groups of voters around the country, set up by the Bush campaign to measure reaction to the speech, registered the highest positive response by far to the six words.

Urged by Teeter, Ailes and his other campaign advisers, Bush capitalized on the popularity of the phrase and repeated it in one form or another almost everywhere he spoke over the next 12 weeks until Election Day.

After the victory, Teeter polled, asking voters what they remembered Bush saying during the campaign. The most common answer was "Read my lips: no new taxes."

Darman was made budget director and in the spring of 1989, three months after Bush had taken office as president, Teeter and a group of senior Republicans met for dinner at the Hay-Adams Hotel.

"How long do we have to hold the tax pledge?" Teeter asked, according to participants. "Can we give it up this year?"

"What do you mean, give it up?" exploded Edward J. Rollins, the 1984 Reagan campaign manager and the head of the Republican Congressional Committee. "You can't give it up."

"Well, Darman says the numbers don't work," Teeter replied.

"You're going to get killed," Rollins said. "This is the most sacred pledge he made."

Later Rollins spoke with Darman, who said, "Reagan raised taxes and didn't get hurt."

"I'm promising you, Dick," Rollins said. "This guy will get hurt. You know, this is the last line. I'm the guy who's got more polls in this party than anybody else. . . . It's the last line between us and the Democrats that anybody can differentiate."

Researcher David Greenberg contributed to this report.