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Congress Puzzles Over the 'New' Dick Darman : Budget Chief's Softer Style May Be Part of Plan to Cut Deficit

July 05, 1989|PAUL BLUSTEIN | The Washington Post

WASHINGTON — The scene: a Senate hearing. At the witness table is Richard G. Darman, director of the Office of Management and Budget. Darman is asked a politically charged question: How long does President Bush's "no new taxes" pledge apply? For how many years?

Darman hesitates. Then a mischievous expression crosses his face. "As a starting position, I would say we might as well assume forever," he says, evoking chuckles from the senators and the hearing-room audience.

This is the new Dick Darman--congenial, witty, a darling of Congress.

It's the same Dick Darman who used to be described in the press with such words as "abrasive" and "prickly," the same Darman whose fabled arrogance and bad temper made powerful enemies all over Washington during his days as a top staff member in the Reagan White House.

The new Darman wins plaudits from the likes of new House Speaker Thomas Foley (D-Wash.), who described the 46-year-old budget director as having "unfailing good humor and an easy and pleasant manner."

The new Darman, marveled a Treasury Department official, has "entranced" lawmakers all over Capitol Hill. "They're hypnotized!" he said, adding that given Darman's previous persona, "You would have expected by now that he would have done something to (expletive) people off. But he hasn't."

Why so kind and gentle? What is Dick Darman up to?

Darman's grand design is the subject of much speculation among economic analysts and policy-makers, for it may hold the key to whether the federal government will finally be able to significantly reduce its stubbornly high budget deficit. Perhaps no Cabinet officer since Henry Kissinger has earned such a reputation for strategic wizardry and Machiavellian cunning as has Darman. And the deficit problem is so politically intractable that only a strategic wizard--or a Machiavelli--could solve it.

Scored Early Victory

"Darman is one of the few people in this town who is capable of thinking in terms of a longer time horizon than this month, this week, this battle," said Carol Cox, president of the Committee for a Responsible Federal Budget, a bipartisan group that advocates deficit reduction. "So we all have a suspicion that he has a game plan. But I don't think it's at all clear what that is."

Darman's first big coup as budget director--the fiscal 1990 deficit-reduction agreement between the White House and the congressional leadership--moved toward implementation in May as the House and Senate worked out the terms of a formal budget resolution.

For Darman, who served as the principal Administration negotiator, the development was a source of considerable pride; the resolution was gaining approval at an unusually early stage in the annual budget process, despite the absence of an economic or political crisis.

Moreover, the pact provided some important political benefits for Darman's boss, the President, because it enabled Bush to show the nation that he could reach an accommodation with Congress without violating his anti-tax promise.

But Darman and the congressional negotiators fell far short of accomplishing a more substantive goal--meaningful reduction in the long-term deficit. To comply with the legal requirement to lower the projected deficit below $100 billion for fiscal 1990, the negotiators used highly optimistic economic assumptions and claimed billions of dollars in savings from accounting gimmicks and one-time measures.

As a result, while the deficit problem has been finessed temporarily, crises are looming down the road--quite possibly smack in the middle of the coming election year.

According to congressional budget experts, the recent budget deal leaves the projected deficit above $120 billion in 1991--the year the Gramm-Rudman-Hollings law sets a deficit ceiling of $64 billion. No matter how the deficit is shrunk to reach that target--whether with spending cuts, tax increases or both--the resulting political pain will be gut-wrenching, analysts say; gimmicks won't do the job.

Must Build Trust

Darman doesn't dispute that analysis. But achieving a far-reaching pact on the deficit, he argues, first requires a more "manageable" step, like the one just taken. It requires kindness and gentleness, he contends; it requires a negotiating climate in which all parties feel that they can rely on each other to step forward, to share the credit--and the blame--for taking politically difficult measures.

"Politicians worry about downside political risks. Generally speaking, they are risk minimizers," he said. "If that's true--and I think it is--then it must be true that you will succeed only if you first build trust.

"It's like wolves," he continued. "They show each other their necks, and don't bite."

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