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We Love Frank Raines, But Hold the Champagne on the Budget Deal

There they were on C-Span, the Republican Congressional Leadership, all waggish smiles. The atmosphere in the Capitol Rotunda implied champagne and balloons. You would have thought they had just won the World Series, World War III or at least a national election. The “Contract with America” is vindicated, they announced. They were all hugging each other like, well, Democrats. It grew sentimental as they acclaimed one another’s courage. I feared that Rep. John Boehner of Ohio was going to weep.

Then came the White House crowd, a team of budget negotiators who, amazingly, were just as giddy and self-congratulatory as the Republicans. Each praised the other and even had a generous word for the GOP, the kind Tony Blair had for the defeated John Major. It was, they said, a great day for the President, his vision, his priorities; and, of course, “for America.”

Front and center in the Briefing Room was a familiar face: Frank Raines, Director of the Office of Management and Budget. Seattle-born and raised, Frank is the self-effacing financial power-broker in the Clinton Cabinet. When he’s a few years older articles like this probably will call him “courtly”. Most people in Seattle probably don’t know his name or that he hails from Franklin High School. But his straightforward Northwest style is so popular inside the Beltway that his biggest problem is persuading Republicans not to praise him too much. “It’s causing the Democrats to be suspicious,” he told the Seattle P-I a couple of months ago. Last weekend, Newt was referring to him as the President’s “effective negotiator and worker.” How embarrassing.

Now, both these groups of negotiators either were sincerely persuaded of their achievement, and that it was massive, or else they all are reversing The Gipper’s career path of entering acting first, then politics. Yet one couldn’t help wondering:

A) Had the mean spirited deficit slashers in the GOP snookered the Democrats?

B) Had the spendthrifts in the White House pulled a fast one on the Republican Congress?

C) By some magic or divine intervention, were both groups justified in their euphoria, and are Light and Truth finally to be engraved in the great book of the Federal Budget?

D) Or, none of the above?

The correct answer, of course, turned out to be: None of the above. And nearly everybody got it right. A Maricopa Research poll taken shortly after the momentous announcement showed that exactly one percent of American adults believed that the budget deal would succeed in reducing spending, cutting taxes and balancing the budget.

Popular skepticism seems correct on several grounds, though not on all. The trumpeted spending cuts are merely reductions in the rate of growth. The tax cuts are only a shaky step in the direction of the thoroughgoing reform we need. The $35 billion tax break for college students (Gingrich termed it “the signing fee” for the deal) seems to be a wasteful contrivance to encourage educators to raise tuition a comparable amount. (When that happens, it could turn out to be an effective tax hike on students who don’t pass a government-required means test for the tax break.) The Medicare fix is synthetic and short term, mainly another attempt at price controls. Problems with the Consumer Price Index that exaggerate inflation and therefore increase inflation-based spending, are ignored, though the Bureau of Labor Statistics is allowed to make one tiny correction.

If, like The Concord Coalition, moreover, you believe that a balanced budget is the door to a secure prosperity, you can only bemoan the charade of putting off the big savings until after 2000, when Bill Clinton leaves office. Had the deal emphasized big cuts now,and not in the sweet by-and-by, you would have heard corks popping outside the Betlway.

So, this noon, when Frank Raines comes to the spring luncheon of Discovery Institute, an event co-sponsored by the Seattle Post Intelligencer and The Concord Coalition, he will receive well-deserved plaudits from a bi-partisan audience of hometown friends and admirers. We’re all proud of him. And I hope he will take that palmy opportunity to explain why the apparently thin budget compromise is really a robust government reform.

For my part, while I’m definitely not ready to join in champagne toasts over the budget deal, I may be prepared to tip back a small cup of sparkling cider. The deal’s cuts in the capital gains tax and the inheritance tax, though modest, can contribute to sustained economic growth, which is the best way to balance the budget in the long run. The enthusiasm of the stock markets in the past week would seem to validate that view. Likewise, the $500 per child family tax credit is the first true financial break for parents in over ten years.

During the next few months, Congress and the White House have the chance to shape these and other elements in ways that reduce long term spending and point to bigger reforms ahead. Frank Raines could play a key role in pulling people together to reach those ends.

On the other hand, the budget deal could disintegrate during the same period. May’s champagne could be very flat by August.

So, a salute to Frank Raines, a decent and dedicated guy. And, as for the budget deal, pass the cider.

Bruce Chapman

Cofounder and Chairman of the Board of Discovery Institute
Bruce Chapman has had a long career in American politics and public policy at the city, state, national, and international levels. Elected to the Seattle City Council and as Washington State's Secretary of State, he also served in several leadership posts in the Reagan administration, including ambassador. In 1991, he founded the public policy think tank Discovery Institute, where he currently serves as Chairman of the Board and director of the Chapman Center on Citizen Leadership.