Deja Voodoo? Dan Rostenkowski proposes a grand budget compromise

Politics is a science. No, politics is an art. Stop — both are wrong. Politics is a game, played in Washington these past two years by politicians so concerned about the next election that they are willing to sacrifice the next generation. Every official in the capital knows that little can be done to bring down the nation’s appalling deficit or tackle the problems of drugs, education and the environment without raising taxes. Still, paralysis prevails. “You go first,” say the Democrats in Congress. “No,” replies the Bush Administration, “you go first.”

Last week someone finally took the plunge. House Ways and Means Committee Chairman Dan Rostenkowski uttered the dreaded words, higher taxes, as the solution to the deficit. “Adopt my plan to fix the deficit, or come up with a better one,” he challenged. In addition to an increase in some excise levies and in income tax rates for the wealthiest Americans, Rostenkowski called for a one-year moratorium on the indexing of tax brackets to inflation (a Reagan- era reform that protects taxpayers from being hit with ever higher rates).

Most startling for a Democrat, he proposed cuts as well: not just a predictable 3% annual reduction in defense spending but also a one-year freeze on most Government programs, including a scheduled cost of living increase for Social Security recipients. Protecting Social Security from Republican budget cutters has been the Democrats’ most effective campaign technique in recent years. By offering to give up the increase in return for G.O.P. cooperation on taxes, Rostenkowski was proposing mutual political disarmament.

On its face, the Rosty tax plan looks like something that would make George Bush’s lips tremble and his teeth clench. But White House press secretary Marlin Fitzwater refused all opportunities to deep-six it. “We don’t want to pour too much cold water on a plan we may want to swim around in for a while,” he said. The water was warm enough for Bush to pick up the phone and call his old friend — the two served together on Ways and Means during the late 1960s — and thank the chairman for his suggestion. He praised Rostenkowski for trying to “break the ice.” Although he carefully repeated his pledge of no new taxes at Tuesday’s press conference, Bush added, “I’m only one player.”

Was this a deal in the making or just one more step in the annual dance between the Democrats and the White House? Almost every year Washington’s divided Government hints at a grand compromise, then scrambles away as both sides point fingers and duck for cover. Last April the flirtation culminated in a bipartisan Rose Garden budget ceremony. The cooperation ended when Bush proposed a capital-gains-tax cut.

Rostenkowski took the unusual step of confiding in the White House staff members before his Sunday announcement, and was assured they would not ridicule it. Chief of Staff John Sununu is said to like the mischief factor: by embracing Rostenkowski, he throws Democrats into disarray. He also turns the spotlight away from House majority leader Richard Gephardt, Bush’s most vocal critic, and from New York Senator Daniel Patrick Moynihan, who is not in the habit of going to the White House to clear his proposals, such as his call for a cut in Social Security taxes. White House Budget Director Richard Darman also has a weakness for mischief, but has always favored a package deal. He called the plan “a genuinely well-motivated effort worthy of serious attention.”

A trifle patronizing perhaps, like giving Rostenkowski points for neatness and spelling, but in Darman-speak, this keeps the door open while the budget director figures out how the new proposal cuts for him. Unlike Sununu, who derives pleasure just from the sport of the job, Darman sees himself making headlines and history, the worthy subject of future biographers. As the Administration’s top fiscal strategist, his name would be attached to any grand compromise, even if Rosty gets a footnote. Slicing through the Budget Knot may be so tempting that Darman might violate the Administration’s firmest vow. When he was asked last week how long the “no new taxes” pledge would last, he said playfully, “For the time being, forever.”

The time being looks like forever to congressional Democrats up for re- election in 1990. Most of them like their jobs, and are already imagining a wave of negative ads slamming “tax and spend Democrats.” Senate Budget Committee Chairman Jim Sasser warned, “This newfound desire on the part of the White House to negotiate on the basis of a lone Democrat’s call for tax increases and domestic spending cuts should be taken for what it is: political opportunism.” Kansas Congressman Jim Slattery fears Republicans are “setting up the Democrats for an ambush.” The leadership is characteristically cautious. House Speaker Thomas Foley called Rostenkowski’s proposal “very important and interesting” but said no comprehensive deficit-reduction plan could be considered unless Bush openly abandons his opposition to new taxes.

Paranoia, perhaps, but Democrats have been here before. After eight years of Republican bashing, they have good reason: in a TIME/CNN poll last week, 56% of the public agreed that “Democrats are too quick to suggest tax increases to reduce the federal deficit.” It will take more to pull them onto the dance floor than a “Can we talk?” from Bush or taunts from Senate minority leader Bob Dole accusing the Democratic leadership of “scrambling for a way to duck.”

With taxes and Social Security cuts as killer issues, it took someone with nothing left to lose to put them on the table. Once considered a candidate for Speaker, Rostenkowski lost control of his own committee last session over capital gains and could lose again this year. As a representative from Chicago’s North Side for three decades, he is impervious to election-year jitters. Even if he lost his seat, he could walk away from the Hill consoled by $1 million in campaign funds he gets to keep. Moreover, he may have been bitten by the statesman’s bug. Colleagues say Rostenkowski envisions a grand compromise on the deficit as the “crowning achievement” of his career.

The plan comes at a time when the emptiness of much of the national agenda has become painfully obvious. Like a teenager promising a night on the town without a dime in his pocket, the Bush Administration is beginning to look a little silly issuing long reports outlining national problems without coming up with any funds for the solutions. Just two weeks ago, Bush unveiled a glossy 129-page “transportation strategy,” a litany of crumbling roads, collapsing bridges, clogged highways and congested airports, with such suggestions as states’ picking up the tab and installing tollbooths. The transportation strategy resembled the Bush plans for education, health and the environment — long on rhetoric, short on dollars.

For now, George Bush can enjoy the Democratic discomfort. Eventually, though, the public may also wonder what the President is doing. Asked to explain why the White House will not do more to mount an attack on the deficit, an Administration official replied, “We have done a lot. We have given this plan a lot of credibility.” In Washington that’s what passes for leadership.

CHART: NOT AVAILABLE

CREDIT: TIME Chart by Joe Lertola.

CAPTION: REDUCING THE DEFICIT

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