Such was the drama last week in the theater of the absurd also known as the Congress. For many Americans, the government shutdown was not a calamity, unless they were trying to vacation at the Grand Canyon or wanted to get a passport. Most essential services, from air-traffic control to mailing social-security checks, went on as usual, and it seemed likely that some kind of stopgap legislation would restore the rest before Thanksgiving. At the weekend, White House and Hill negotiators worked to resolve the impasse and overcome hard-line House Republicans who were shouting “Shut it down!” with a passion not unlike that of the antiwar protesters of an earlier era.
Yet the real showdown is still to come. The squabbling over short-term funding was a skirmish before the larger struggle over reducing the $200 billion-a-year federal deficit. This week the Republicans will send the president a bill balancing the budget by 2002. Clinton vows to veto it, accusing the GOP of heartlessness toward the elderly, the poor and the environment. The posturing may turn out to be a ritual dance on the way to balance–or it may become another depressing chapter in the capital’s march of folly. The outcome hangs largely on whether the two garrulous baby boomers who occupy the Oval Office and the speaker’s chair can overcome their self-infatuation–and, in effect, grow up.
Since last spring, it had appeared almost certain that Congress would take the first meaningful step in decades toward controlling government spending. The GOP majority elected in 1994 had defied conventional wisdom, which held that modern politicians were incapable of cutting popular programs like Medicare, student loans or farm subsidies. The realization seemed to have finally sunk in that Washington cannot keep on spending more than it takes in; even Bill Clinton had signed on to the goal of a balanced budget. The capital appeared poised for a rare moment of political transcendence, in which lawmakers risc above their fear of losing the next election.
Then human nature reasserted itself. Clinton and Gingrich began worrying about their own large personal egos, rather than the delicate work required to carry out promises of fiscal responsibility. There is still hope the speaker and the president will see the costs of failure: higher interest rates slowing the economy, an ever-greater debt for future generations and deeper public cynicism. At the same time, there remains the real risk that vanity and pique will wreck a historic opportunity.
Much depends on the protagonists’ fraught relationship. Clinton and Gingrich regard each other with a mixture of envy, empathy and contempt. Like the two brightest kids in class, they “try to out-wonk each other,” says a senior administration aide. “It’s ‘I’m smarter than you, nah, nah, nah’.” Still, they appeared to have warily bonded over the past year, talking often on the phone about their shared hatred of the press and the need to protect their political flanks. Through the summer, Gingrich believed that Clinton was trying to distance himself from traditional liberals, and Clinton believed that Gingrich was trying to moderate the deeply conservative House COP freshmen, whom veteran lawmakers sometimes refer to as “the Hizbullah.”
This fragile good will began to collapse two weeks ago, at precisely the wrong moment. Just as Clinton was opening negotiations, his poll numbers started creeping up. He seemed to be scoring by bashing the COP for cutting health benefits for the elderly. After wobbling through most of the year, the president suddenly decided to demonstrate his convictions.
This was the Clinton on display one night last week as he greeted congressional Republicans behind closed doors at the White House. Halfway through the hour long session, House Majority Leader Dick Armey complained that the president was trying to frighten the congressman’s grandmother by demagoguing the impact of Medicaid cuts on nursing-home care. “Why would anybody say that we’re trying to wreck Medicaid?” said Armey. “That’s just ridiculous.”
Clinton was “simmering,” a participant in the meetings told NEWSWEEK. “How do you think I felt when all I heard from you was how our [1998] deficit-reduction plan was going to wreck the world?” the president demanded. He vowed not to sign the GOP’s budget–“Not now, not ever.” Armey replied that he was “unimpressed” with everything the president had just said. Then he chided White House chief of staff Leon Panetta for calling GOP lawmakers “terrorists.” At that point, Clinton rose and pointed his finger at the Republicans across the table. “I don’t care what you said about me. But I have never said anything disparaging about your wife or any other family member.” (Armey had called Hillary Clinton a Marxist in a 1998 speech.) The room fell silent; the meeting went nowhere.
On Wednesday it was Gingrich’s turn to overreact. At a breakfast with reporters, he warmed up by calling the president “morally bankrupt.” Then he began a strange whine about how he had been treated poorly aboard Air Force One on the flight to Prime Minister Yitzhak Rabin’s funeral in Israel. He claimed that Clinton had ignored him and Senate Majority Leader Bob Dole, had not wanted to talk about the budget and had made the two COP lawmakers disembark at the back of the plane. The speaker said the slights provoked him to take a harder line during the negotiations.
Gingrich’s petulance thrilled the White House. They released a photo of Gingrich and Dole chatting with a respectfully deferential president on Air Force One. In fact, Clinton had refused to talk to the Republican leaders about the budget. He was too worn out by the emotional funeral to dicker with Gingrich on the ride home. For the president, the public-relations point was won. Even Republicans were shaking their heads. Gingrich “needs to go home and take a nap,” said Republican Rep. Dave Weldon of Florida.
Gingrich was a victim of his own hubris, say his intimates. Like Louis XIV (“L’etat, c’est moi”), he thinks of himself as the embodiment of the new Republicanism. “I am the right wing,” he once pronounced. He has transformed the formerly open speaker’s office in the Capitol into a private fiefdom, complete with personal bodyguards. But on Air Force One he was made to feel like a mere backbencher again, shown to the rear.
Gingrich’s vision and bluster were essential to launching the GDP revolution, but it may take different skills to turn it into law. Last week Dole pointedly appealed to both sides to act “like reasonable adults.” He remarked to NEWSWEEK that while Gingrich and Clinton were “up in the spotlight,” he was “somewhere in the shadows. It’s not a bad place to be,” he said–with a wintry smile.
Dole knows there are a number of ways out of the current impasse. A compromise to reopen the Washington Monument is only a temporary reprieve. The worst solution to the larger budget contest would be to punt-to enact a yearlong “continuing resolution” and in effect turn the budget into a referendum in the 1996 election. All sides realize, however, that the public would view that as a failure of government, and the only obvious winner would be Ross Perot or some other populist who might ride into a ‘96 campaign that, post-Powell, already seems so arid. The White House and Hill could compromise by trimming the scope of the cuts and adopting more optimistic economic assumptions, which is what the White House wants. But that would be a return to the old smoke-and-mirrors approach to spending. The most sensible solution would be to scale back-if not eliminate-the GOP’s $245 billion tax cut. Both Clinton and the Republicans have promised at least a $500-a-year tax break to middle-class families. To get lawmakers to renounce such a goody on the eve of an election would require real leadership. Last week it was not to be found at either end of Pennsylvania Avenue. And no matter what kind of short-term fix the White House and the Hill apply, they will still be a long way away from making the truly essential compromises.
The real fight–over the size of government and the deficit–is just beginning. According to the Congressional Budget Office, the GOP cuts deeply and hits a surplus by 2002; the Democrats don’t.
The Road to 2002 BUDGET PROPOSALS (IN BILLIONS OF DOLLARS) CLINTON GOP Expenditures $2,077 $1,876 Defense $281 $271 Civilian programs 288 244 Social security 480 480 Medicare 277 244 Medicaid 165 124 Other 257 230 Interest 328 284 Revenues $1,868 $1,883 Deficit/surplus -$209 +$6
GRAPH: Two Different Futures
SOURCES: CONGRESSIONAL BUDGET OFFICE, OFFICE OF MANAGEMENT AND BUDGET. NUMBERS DON’T ADD BECAUSE OF ROUNDING
How to make sense of the chaos in the capital
Between Partisan Rhetoric and Economic jargon, it’s hard to tell what the fight is truly about. No matter how the two sides settle the government shutdown. Congress and President Clinton will continue t clash over long-term spending. Rich Thomas, Newsweek’s chief economics correspondent, translates:
A combination of differences in philosophy and raw politics. For starters, Republicans moved slowly all year. By Oct. 1, Congress was supposed to have approved 18 appropriations bills: it had only passed two. It was also a month and a half late in passing its seven-year budget plan covering taxes and entitlements like Medicare. Clinton stalled, too, then offered only a sketchy plan to hit balance in 10 years.
Both. The shutdown happened because the government fiscal year had ended and Congress hadn’t yet approved spending plans for next year. In the past, Congress has passed a continuing resolution to pay the bills for a few weeks until the real budget is worked out. But Congress and Clinton couldn’t agree on even that because each saw the vote as a preview of the battle over the big seven-year plan.
No. The Republicans would raise insurance premiums a little and slow Medicare growth from 12 percent a year to 6 percent. But Clinton himself would control Medicare growth almost as much (to 7.5 percent) and increase premiums almost as much (only $58 less per year in 2002). Under either plan some services would suffer, but for the most part, hospitals would become more efficient and doctors would have to settle for smaller salary increases. To reduce the deficit, Congress must restrain Medicare.
Half right. Medicare inflation must be curbed to preserve the program, but Republicans wouldn’t have to change as much if they weren’t also slashing taxes. And much of the GOP’s $245 billion tax cut does go to the affluent.
The Republicans would cut three times as much as the Democrats from Medicaid, which subsidizes nursing homes for many Americans and health care for the poor. They would reduce spending for scores of programs like student loans and environmental protection. Clinton would increase such spending slightly. And Republicans want a tax cut twice as generous as Clinton’s.
No. While Clinton endorses some radical changes in one welfare program (Aid to Families with Dependent Children) he leaves the rest of the “safety net” intact. Republicans trim across the board.
Probably a $400 to $500 tax credit per child for families making up to about $90,000 a year. A cut in the capital-gains tax is likely, too. That’s about all.
Absolutely. The Congressional Budget Office conservatively assumes that the economy will grow 2.3 percent a year from 1995 through 2002. Clinton’s budgeteers “tweaked” their forecast up to 2.5 percent. If the economy grows faster, so does personal income, profits and, ultimately, tax collections. By assuming a more robust economy, Clinton’s forecasters “gained” $475 billion in extra revenues, enabling Clinton–on paper–to balance the budget without painful cuts. But using the CBO numbers, Clinton’s plan produces a $200 billion deficit.
