makes that go right out the door. Politically, I think it's a disaster." [fn 18] With that,
Rollins was locked in a feud with Bush that would play out all the way to the end of the
year.
But Democrats were also unhappy, since "no preconditions" was an evasive euphemism,
and they wanted Bush to take the full opprobrium of calling for "new taxes." The White
House remained duplicitious and evasive. In mid-May, pourparlers were held in the
White House on a comprehensive defecit-reduction agreement. The Democrats demanded
that Bush go on national television to motivate drastic, merciless austerity all along the
line, with tax increases to be combined with the gouging of domestic and social
programs. Bush demurred. All during June, the haggling about who would take the public
rap went forward. On June 26, during a White House breakfast meeting with Bush,
Sununu, Darman, and Congressional leaders, Congressman Foley 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 finance
hung 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 be enacted 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 of Infamy; 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 was received 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 tax rates 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