The US budget - 9 February 1986

One morning last week, the president invited to breakfast his own party leaders from the house and the Senate and the opposition leaders in both houses.

There's nothing novel about this. I'd guess that almost every breakfast the president eats, except on Sunday, is what they call a working breakfast. And before any big piece of legislation's coming up, it's normal for the president to have both sets of leaders in and hash over the prospects for the bill the president has proposed.

Special attention should be called to the word "proposed". The president is not a prime minister, though most presidents often wish they were, in the sense that a prime minister, once elected with a halfway decent majority doesn't so much propose a bill but throws it down like a gauntlet, or an accomplished fact. It's going to be passed. Let the Opposition fume as they may. And when they get themselves a prime minister, they can do the same. Quite different with the American federal system.

Unlike a prime minister, the president does not live, work and have his being in the legislature. He's a separate institution. He's not even allowed in the Senate or the house, except by invitation for certain prescribed occasions. He has no power to make into law anything that is simply approved by a majority of his own party. So, every time you read, "Reagan will cut social programmes, increase defence", it means he would like to. The bills he draws up with the help of his close advisors and the appropriate Cabinet officer are embodiments of wishful thinking. What he's saying to the opposition is, "Please! Be kind!"

Well, that breakfast was called to talk about the coming year's budget, which the president, by invitation, came to Congress and presented this week. The seating at the breakfast table was interesting. Not at all like those get-togethers at the summits where the Americans sit on one side of the table and the Russians on the other and they grin or glare at one another as the fancy, or the facts, take them.

The president was in the middle. On his left was Senator Dole, his key money-man in the Senate, chairman of the Senate finance committee. Next to him was Senator Byrd, the Democrats' leader in the Senate. At the president's right elbow was Tip O'Neill, the Democrats' leader in the House. And on his right, the Republican house leader. Friend and enemy, politically speaking, evenly distributed.

The big man here, when the budget's in question, is not the president, but Mr Tip O'Neill. Not to confuse things, he's also the Speaker of the House which is not, in America, a neutral chairman but always the leader of the majority. Mr O'Neill was the big man because the Constitution gives the lower house, the House of Representatives, the sole right to originate money bills. And the terrible albatross that all Republican presidents in living memory, all but one, have had to stagger under is the Speaker of the House. Because for 46 of the past 50 years, the speaker, and therefore the majority, in the House, have been Democrats, temperamentally and ideologically opposed to the Republican president before he unpacks his bags and moves into the White House.

So, since every such breakfast at the White House is a political event, the first man in to offer the president a warm handshake was his sworn enemy, Tip O'Neill. This great lumbering, shrewd, wry man with a face like a giant codfish. Appropriately enough, since he comes from Boston, whose prosperity back to colonial days was based on the bean and the cod. When Tip O'Neill shakes the president's hand, no matter how warm the accompanying smiles, it's like two boxers shaking hands. They step away. No bell rings, but the fight is on.

And the other morning, the fight was on so quickly and with so little preliminary sparring that a Republican senator present moved in as voluntary referee and said, "Please! Stop beating up on each other!" The president started it, outlined his budget, announced he was going to cut some work and work training programmes. And dropped a sidelong remark, as he can't help doing, that some people preferred to stay out of a job and on welfare out of sheer laziness. Tip O'Neill exploded. "The president's economic ideas", he said, "were a bunch of baloney. Which might go over big at the country club, but not with the rest of the American people."

This nasty little exchange was significant because it exposed two opposing prejudices that are not particularly American. They raise their ugly heads wherever, in the western and no doubt the Asiatic world, wwo opposite temperaments come together, the conservative and the socialist. The Republican and the Democrat. The Free Marketeer and the Government Interventionist. These two opposing jabs have been standard procedure in any political, emotional exchange since the Great Depression. And maybe before.

When I was a boy, a Tory quip which had, by then, all the novelty of Annie Laurie, was that if you gave bathtubs to working people, they would only fill them with coal. The responsive line was that all Tories sat in their clubs and dreamed up policy over bottles of burgundy and fat cigars.

The word that needled Tip O'Neill was the word "lazy" applied to the unemployed. The counter-punch that hurt Mr Reagan was the phrase "the country club". They flared up precisely because there's something in both remarks. Not much, but enough to spark a touch of anger.

Well, this little spat is nothing to dwell on but it does show that even among men whose days and nights are spent with the complexities, the tedious and enormous problems of government, in a mainly industrial democracy, these little roots of bigotry lie deep. Of course, since they're both good politicians, it was soon over. The anger, I mean. But not the opposition to what the president in essence proposes.

Let's look at how the president and Congress go to work on a money bill. The president does no more than draw a preliminary sketch. Very bold it is. Which first the House will re-draw. And then the Senate will say, "There's too much fat there, let's trim the biceps!"

Since the House and the Senate never have agreed on the final drawing, they take both versions to a joint committee of both Houses, finance committees. And they fiddle, and underline and rub out. And compose a final version. Almost always very unlike the President's charming, simple sketch, not quite final. This committee composite then goes to the House floor where 435 members do a little more dodging and stippling and say, "All right! That's it!" This then goes to the floor of the Senate which increases the biceps and reduces the stomach and when the whole 100 members of the Senate have voted, you have a portrait of the American budget.

Well, you see by now how much simpler it is to talk and write about the Reagan budget. It is not the Reagan budget, nor was it the Carter budget or the Kennedy budget. It is the Congress's budget. And the deficit is the result of a congressional habit over many, perhaps 40, years, of borrowing money when you didn't have enough in the till.

But it has to be said that most legislators, I should say all Democrats and a surprising number of Republicans, believe that the enormous leap in the national deficit was made in the past five years, mainly by the increase in military spending. Not actually more as a percentage of the budget than in the Carter years and considerably less than in the Kennedy and Johnson years. And, this is a far more plausible first cause, by Mr Reagan's successful determination to cut taxes. I say "successful determination" because he was successful in getting the Congress to increase defence spending and cut taxes, for which most of the Congress now blames him.

That's inevitable. In their political campaigns, the Republicans always get in a mention that the United States goes to war only when a Democrat is in the White House. And that's true in the literal sense. That America got into the First World War under Wilson. The Second under Roosevelt. Korea under Truman. Vietnam under Kennedy and/or Johnson. When you're running for Congress, you don't go into causes.

So what is this president's first bold sketch of the budget? Submitted for drastic revision by the Congress, he proposes to raise military spending by about 6% and to cut social programmes by about 7%. But since the military accounts for only 25% of the budget and social programmes for 64%, the cuts are more drastic than the increases, and are meant to reduce agriculture price supports, Medicare and other health programmes for the old, community services, loans for rural housing, work training programmes, arts programmes, and about 30 more welfare programmes.

In previous years, the House, with its large Democratic majority, could simply dismiss the president's budget and shape its own. This year, however, there's an axe hanging over Congress. It is a new law. It's a bi-partisan bill sponsored by three men but generally known as the Gramm-Rudman Act. It was passed by the last Congress which says that if the budget the Congress passes does not bring the deficit down to $144 billion from 220 by 1 October, then the controller general, an unelected official appointed by the president, can slash indiscriminately across the board the military, welfare, farming, the lot, to bring the deficit down to that required 144 billions.

Now this law, which Congress may well come to rue, could be challenged as unconstitutional, on the grounds that the Constitution gives only the House the right to initiate money bills and that the controller general is outside the Congress and outside the Constitution.

At any rate, this axe would deliver brutal cuts to everything and the president could then say, "So YOU cut military spending to a perilous point!" And the Democrats could say, "YOU cut social programmes to the point of a general revolt of the poor, the blacks, the old, the disabled, the dispossessed et cetera." To which the President could retort, "It was YOU, not I, that passed the Gramm-Rudman axe!"

The president isn't running for reelection this year or ever again, but the whole House and one-third of the Senate is running one month after the Gramm-Rudman axe would fall. So even though there doesn't seem the faintest chance that the president is going to get all the military increases he wants and cut the social programmes as deeply as he wants, the handle of the axe does seem, just now, to be in the president's hand.

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