Chris Matthews was a senior aide to House Speaker Thomas P. “Tip” O’Neill Jr. from 1981 through 1987. He is most recently the author of “Tip and the Gipper: When Politics Worked.”
I remember a testy 1982 meeting between Ronald Reagan and Tip O’Neill over the budget. Republicans wanted to reduce the deficit projected for the coming fiscal year. Democrats, led by O’Neill, the House speaker, were resistant to cutting Social Security.
With the meeting about to end in failure, House Majority Leader Jim Wright proposed that, in exchange for a smattering of spending cuts, the president give up part of his historic 1981 tax cut.
Reagan’s response, if not fit for a prime-time address, was very much to the point. “You can get me to crap a pineapple,” he said. “But you can’t get me to crap a cactus.”
This is where both sides are today.
What one side is demanding — some cut or delay in the Affordable Care Act — the other side considers its baby. Reagan’s three-year cut in marginal tax rates was the heart of his economic doctrine. The ACA has Barack Obama’s name all over it.
Don’t expect either side to give in, or for President Obama or House Speaker John Boehner to say how to break this death grip.
The trick to breaking such deadlocks in the 1980s was for someone other than the leaders to propose a solution. Inevitably, it was a legislator with the experience, the staff and the will to find it. Usually, it was someone on the Senate Finance Committee or the House Ways and Means Committee, where people spend their careers studying such options and searching for coalitions to make them work.
In 1982, it was Bob Dole. The Republican senator proposed the Tax Equity and Fiscal Responsibility Act, known as TEFRA, which brought Reagan and O’Neill to the same side. It raised about $100 billion over three years through a potpourri of tax changes.
Getting it approved was the task of leaders. Not wanting his party to take all the heat, O’Neill demanded that a majority of House Republicans vote with him. He insisted that those on the other side of the aisle support their president. “Are you going to follow the leader that brought you here, or are you going to run? I ask you just to think of that,” he said on the House floor.
Reagan did his part right to the end. “All day I sat at my desk phoning congressmen on the tax bill, and tonight it passed with 103 Republican votes and more than half of the Democrats, 226 to 207,” he jotted in his diary that night. “Tip O’Neill made a speech to the Republicans telling them why they should support me. It seemed strange both of us being on the same side.”
The pattern repeated in 1983 with Social Security. To keep the system funded, both sides agreed to taxing half the benefits of higher-income retirees and a one-time delay in cost-of-living adjustments. A raise in the retirement age was added to the final bill.
Getting that deal took a hard push, once again, from Dole, this time joined by Sen. Daniel Patrick Moynihan, a Democrat. It also required the constant pressure of Robert Ball, a veteran Social Security administrator; Alan Greenspan, who chaired the bipartisan commission on the matter; and a young aide in the speaker’s office named Jack Lew.
The tax reform bill of 1986, the major legislative achievement of Reagan’s second term, came about the same way. Again, the final deal offered something for both sides: the lowered top rate on federal income tax for Reagan conservatives; balanced taxation of earned and equity income for O’Neill liberals.
The heroes were Ways and Means Chairman Dan Rostenkowski, working with then-Treasury Secretary James Baker.
The historic tax overhaul failed its first test on the House floor. It was Tip’s loyalty to his friend “Rosty” that got him to give the bill a second try. His only requirement was that Republicans provide at least 50 votes in the House, a demand Baker delivered right on deadline.
Passage of the 1986 tax reform was a credit to both parties. O’Neill wrote in his memoirs: “After the vote I was struck by how much could be accomplished when the president and the speaker coming from opposing parties but working together could agree on specific legislation. Only a few months earlier none of the lobbyists had given tax reform a chance. This was one case where leadership made all the difference.”
Again, it was legislators, not the leaders, who found and championed the solution. That’s how Washington works — when it works. Legislators find the deal; leaders close it.
It is often said that Reagan and O’Neill got things done because, at the end of the day, they could meet and get them done. The truth is a bit less fanciful. All that cordial time together “after 6” and all those friendly St. Patrick’s Days managed to keep open the lines between two tough men. As Kirk O’Donnell, chief counsel to the speaker, advised: “Always be able to talk.”
That’s where the legislators came in. Before agreement was possible, a hard proposal had to be on the table. For that full credit goes to Bob Dole, the unsung hero of this city.
The question in October 2013 is who will be today’s Dole and Rosty? I’m watching the chairmen and members of the Senate Finance and House Ways and Means committees. They are the folks with the experience and staff to know where the deals lie.
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