déJà vu ALL oveR AgAin 201
torate in economics, had teamed up with Gorton’s centrist friend, Warren
Rudman of New Hampshire, and Fritz Hollings of South Carolina, a con-
servative Democrat with a sharp tongue. “Gramm was smarter than most
everyone except Slade,” Boschwitz says. “Rudman was a bulldog like
Gramm, but sometimes ran a little roughshod over people.” Hollings
could be a tough guy, too.
Gorton pronounced Gramm-Rudman “one of the rare examples I’ve
seen since I’ve been here of a truly new idea. There’s a tremendous inertia
under the present system in favor of the status quo. The genius of GRH...
is that it profoundly changes the consequences of inaction.”^10
The House and Senate approved their versions of Gramm-Rudman in
November. The president signed the act into law in December, but Con-
gress got a lump of coal in its Christmas stocking. Reconciliation was still
stalemated. Domenici said the deficit-reduction numbers produced by
the White House Office of Management & Budget were “patently absurd.”
Tip O’Neill called OMB’s plan “crazy and nonsensical.”11*
oBogonRe ’s B pAcKwood, who had ascended to the chairmanship of the
Finance Committee with Dole’s promotion to majority leader in 1985, was
at odds with his committee over tax reform, the centerpiece of the presi-
dent’s domestic agenda. In markup, committee members had inserted so
many loopholes—Packwood himself was looking out for timber industry
interests—that the proposal bore no resemblance to the revenue-neutral
original ideal. Gorton, Boschwitz and Grassley were among the 50 sena-
tors who said tax reform should take a back seat to agreement on reducing
the deficit.^13
Finally, Packwood rallied a core group of supporters, consulted tax ex-
perts, surrendered some feathers from his own nest and brokered a bipar-
tisan bill that emerged from his committee on a unanimous vote and
endured a thousand tweaks to become law that fall. Reagan had asked for
a tax code that was “simpler and fairer.” Roughly revenue neutral, it was
simpler for individuals but more complex for companies doing business
overseas. As to fairness, it comforted more of the afflicted, afflicted more
- Gramm-Rudman’s automatic cuts were declared unconstitutional in 1986. The Supreme
Court said they violated the separation of executive and legislative powers. A revised ver-
sion was enacted in 1987. In the final analysis, Smith and Wildavsky assert in their book
on the deficit, Gramm-Rudman not only failed to force a solution, “it actually paralyzed
the system.” Two years out, Senator Domenici agreed that it wasn’t perfect, but he denied
it was a failure. An exercise in exasperation yes, futility no.^12