threatened to walk out of the talks unless Bush went public with a call for tax hikes. For a moment,
the dollar, the Treasury bill market, and the entire insane house of cards of Anglo-American financehung suspended by a thread. If the talks blew up, a worldwide financial panic might ensue, and the
voters would hold George responsible for the consequences. Bush's Byzantine response was to issue
a low-profile White House press statement.
It is clear to me that both the size of the defecit problem and the need for a package that can beenacted require all of the following: entitlement and mandatory program reform; tax revenue
increases; growth incentives; discretionary spending reductions; orderly reductions in defense
expenditures; and budget process reform.
"Tax revenue increases" was the big one. June 26 is remembered by the GOP right wing as a Day ofInfamy; Bush cannot forget it either, since it was on that day that his poll ratings began to fall, and
kept falling until late November, when war hysteria bailed him out. Many Congressional
Republicans who for years had had no other talking point than taxes were on a collision course with
the nominal head of their party; a back-benchers' revolt was in full swing. Fitzwater and a few
others still argued that "tax revenue increases" did not mean "new taxes", but this sophistry wasreceived with scorn. Fitzwater argued in doublethink:
We feel [Bush] said the right thing then and he's saying the right thing now.....Everything we said
was true then and it's true now. No regrets, no backing off.
Nixon's spokesman Ron Nessen had been more candid when he once announced, "All previous
statements are inoperative." When Fitzwater was asked if he would agree that Bush had now
formally broken his no tax pledge, Fitzwater replied: "No. Are you crazy?" On July 11,
Congressional Democrats blocked Bush's favorite economic panacea, the reduction of the capital
gains tax rate, by demanding that any such cut be combined with an overall increase of income taxrates on the wealthy. This yielded a deadlock which lasted until the last days of September.
Bush hid out in the White House for a few days, but then he had to face the press. There would be
only one topic: his tax pledge. Bush affected a breezy and cavalier manner that could not disguise
his seething internal rage at the thought of being nailed as a liar. The internal turmoil was expressedin the frequent incoherence of verbal expression. Bush started off with an evasive and rambling
introduction in which he portrayed himself as fighting to prevent the suffering that an automatic
sequester under the Gramm-Rudman-Hollings law would entail. The first question: "I'd like to ask
you about your reversal on 'no new taxes.'" occasioned more evasive verbiage. Other questions were
all on the same point. Bush attempted to pull himself together:
I'll say I take a look at a new situation. I see an enormous defecit. I see a savings and loan problem
out there that has to be resolved. And like Abraham Lincoln said, "I'll think anew." I'm not -- but
I'm not violating or getting away from my fundamental conviction on taxes or anything of that
nature. Not in the least. But what I have said is on the table, and let's see where we go. Butgot a different-- we've got a very important national problem, and I think the president owes the we've
people his --his judgment at the moment he has to address the problem. And that's exactly what I'm
trying to do.
And look, I knethen I'll ask the people for support. But more important than posturing now, or even negotiating, isw I'd catch some flak on this decision....But I've got to do what I think is right, and (^)
the result....
It was a landmark of impudence and dissembling. One of Bush's main objectives as he zig-zagged
through the press conference was to avoid any television sound bites that would show him