TIME: Almanac 1993/TIME Almanac 1993.iso/time/102389/10238900.055

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                                                                                NATION, Page 28

COVER STORIES: The Can't Do Government


Paralyzed by special interests and shortsightedness, Washington
no longer seems capable of responding to its growing challenges

By Stanley W. Cloud


    "Government isn't the solution; it's the problem." As a
candidate and a President, Ronald Reagan loved that line. But
Reagan seemed simply to be indulging in harmless hyperbole or
offering his version of the time-honored aphorism that government
is best when it governs least. Surely he did not seriously propose
to dismantle an institution that had brought the U.S. through two
world wars, restored stability during the Depression and played a
major part in developing one of the highest standards of living on
earth.

    Or did he? If Washington was "the problem" when Reagan took
office in 1981, it looks like a costly irrelevancy today. After
almost nine years of the Reagan Revolution, Americans may wonder
whether the Government -- from Congress to the White House, from
the State Department to the Office of Management and Budget -- can
govern at all anymore.

    Abroad and at home, challenges are going unmet. Under the
shadow of a massive federal deficit that neither political party
is willing to confront, a kind of neurosis of accepted limits has
taken hold from one end of Pennsylvania Avenue to the other.
Whatever the situation -- the unprecedented opportunity to promote
democracy in Eastern Europe, the spreading plague of drugs, the
plight of the underclass, the urgent need for educational reform
-- the typical response from Washington consists of encouraging
words and token funds. Yet voters, especially the better-organized
ones, continue to demand -- and often receive -- more benefits and
services while rejecting higher taxes.

    Even some Republicans are expressing concern about the
paralysis. Conservative analyst Kevin Phillips described the
problem two weeks ago in the Washington Post as "a frightening
inability to define and debate America's emerging problems." Last
week's 190-point stock market tumble was the immediate result of
economic developments, namely UAL's failure to obtain financing for
its leveraged buyout. But Washington's glaring inability to control
spending hardly inspires the confidence that markets need.

    Ironically, the best depiction to date of the nation's gridlock
may have come last summer from a ranking member of the Bush
Administration: Budget Director Richard Darman. In a speech at the
National Press Club, Darman blasted both the Government and the
voters for mimicking spoiled children with demands of "now-nowism
-- our collective shortsightedness, our obsession with the here and
now, our reluctance adequately to address the future . . . Many
think of (the deficit) as a cause of our problems. But it is also
a symptom, a kind of silent now-now scream."

    Darman's observation -- oddly reminiscent of Jimmy Carter's
much maligned 1979 "malaise" speech on the nation's shrinking
horizons -- was acute. But even as he was speaking, Darman and
others in Government were obscuring the size of the federal deficit
through slick bookkeeping and legislative tricks and promising bold
new programs that they knew the federal budget could not sustain.

    Such hypocrisy is becoming more and more common in the
Administration and Congress as the contradictions, limitations,
frustrations and injustices they have created become increasingly
apparent. Three key indicators of the degree to which Government
has lost its bearings were evident last week:

    Budgetary Madness

    As the 1990 budget is being crammed into a single 1,376-page
package, the White House and Darman's Office of Management and
Budget have joined Congress in a staggeringly cynical conspiracy
to mask the actual size of the deficit. OMB says it will be $110
billion in the next fiscal year, within the Gramm-Rudman-Hollings
target zone. But nobody really believes that. At the same time,
several long-term, big-ticket items have been taken "off budget,"
including at least $30 billion of the $50 billion for bankrupt
savings and loans over the next three years. Because
Gramm-Rudman-Hollings contains no penalty if estimates of past
deficits are wrong, the Pentagon has shifted $2.9 billion from the
deficit for fiscal year 1990, which began Oct. 1, to the previous
year, simply by moving a payday back two days.

    The Administration has proposed almost no specific budget cuts
this year, leaving Congress to find whatever savings it can. The
Senate late last week passed a budget-reconciliation bill, but
hours of negotiations with the House remain before final approval.
If the bill does not reach the President early this week, for the
first time ever the Gramm-Rudman-Hollings buzz saw will swing into
action, requiring across-the-board spending cuts -- in Medicare,
education, law enforcement, defense. Congress can vote to restore
the money once the deadline is past. Dan Rostenkowski, chairman of
the House Ways and Means Committee, wrote in the New York Times
last week that Congress should let Gramm-Rudman-Hollings take
effect to force a crisis: "Our refusal to attack the deficit would
be comic if it were not so irresponsible."

    Yet many senior Bush advisers argue that the deficit is no
longer a major concern because it is declining as a percentage of
the gross national product. But that is true only by virtue of
bookkeeping magic. The Congressional Budget Office puts the real
fiscal-1990 deficit at $206 billion and says it is increasing
relative to the GNP, thereby exerting upward pressure on real
interest rates. Even so, says a White House official, "hardly
anybody in the White House, or in the financial world, or elsewhere
in the real world, believes that the budget deficit matters."

    Special-Interest Politics

    Congress last week seemed to be moving toward approval of the
Administration's plan to cut the tax on capital gains to 15% as
well as repeal or drastically curtail the catastrophic-health-care
program for the elderly that was passed only last year with the
wholehearted approval of the Reagan White House.

    The capital-gains cut, which would fulfill one of Bush's few
specific 1988 campaign promises, is aimed at the well-to-do
executives and wealthy investors in the Republican electoral
coalition. The Democratic leadership on Capitol Hill mounted a
confused, last-minute campaign to stymie the cut as unfair to
working people. But the leaders' hearts, let alone those of
rank-and-file members, did not seem to be in the fight. A two-year
cut easily passed the House, while a bipartisan group of Senate
leaders negotiated ways to make the reduction permanent.

    Although the White House argues that lowering the capital-gains
rate would spur economic growth, many economists predict that it
would add billions to the deficit over the long term. That was the
least of considerations, however, in the White House and Congress.
Says Speaker of the House Tom Foley: "I see little or no evidence
that the Administration is pursuing serious deficit reduction."

    The catastrophic-health-care program, which lobbying groups for
the elderly hailed at its passage, imposed an annual surtax of up
to $800 on well-heeled Medicare beneficiaries, who balked at having
to pay for benefits that were often duplicated by their private
insurance. Last summer they began an intense, well-organized
campaign for repeal, even though it could mean eliminating the
entire program and leaving millions of needy seniors uncovered. The
House voted overwhelmingly to do just that on Oct. 4, but the
Senate, while inclined to eliminate the surtax, is trying to keep
some parts of the program.

    Government by Symbolism

    Reagan was a master at this, and Bush has proved a very quick
study. When the Supreme Court last July ruled that the burning of
the U.S. flag qualified as protected free speech under the First
Amendment, Bush and his advisers organized a media event before the
Iwo Jima memorial in Washington so the President could call for a
constitutional amendment to ban flag desecration. Congress shied
away from an amendment, but last week it passed a simple criminal
law that would impose a jail term of up to one year on anyone who
burned the flag. The White House indicated that Bush would let the
law go on the books without his signature, because he thought it
was probably unconstitutional.

    Such high jinks are symptomatic of much broader problems that
have both caused and accelerated the emasculation of Government.
Washington has been at a political impasse since Reagan's first
term, when Congress -- Republicans as well as Democrats -- refused
to let him gut popular domestic programs to pay for his huge tax
cuts. Instead, the Government decided to have it both ways: tax
reduction as well as big boosts in defense spending and increasing
middle-class entitlements (notably Social Security and farm
supports), offset to a small degree by cuts in programs for the
poor. The resulting deficit spending has spurred economic growth,
but not sufficiently to cover the gap.

    Acknowledging as much, the Democrats have repeatedly ducked or
skirted major issues and problems and have been all but powerless
to offer effective opposition to the Republican program. Part of
their difficulty stems from the weakness, egotism, venality and
sheer political cowardice rampant on Capitol Hill today. Much of
the current session, in fact, has been devoted to investigating
either former members of Congress like John Tower, Bush's first
choice as Defense Secretary, or prominent members such as Speaker
Jim Wright, who was forced to resign because of his ethical lapses.

    Discipline is not what Congress is best at. It prefers being
a dispenser of largesse to being a moral policeman or stern
taskmaster. Leadership is generally left to the President. Yet
George Bush seems to have as much trouble as ever with "the vision
thing." Handcuffed by his simplistic "read my lips" campaign
rhetoric against a tax increase as well as by his cautious
personality, Bush too often appears self-satisfied and reactive.

    His long-term goals, beyond hoping for a "kinder, gentler"
nation, have been lost in a miasma of public relations stunts. The
President's recent "education summit" with the nation's Governors
produced some interesting ideas about national standards but little
about how to pay the costs of helping public schools meet them. His
much trumpeted war against drugs was more an underfinanced
skirmish. Bush told voters last year that he is an
environmentalist, but the most significant clean-air proposals put
forth this year -- stringent new standards on automobile emissions
-- were adapted from California's strict limits for the 1990s.

    Abroad, Bush tends to turn Teddy Roosevelt's famous dictum on
its head by speaking loudly and carrying a small stick. He did
offer important new proposals on conventional-force reductions in
Europe. Otherwise, he has allowed the Kremlin to trump him with a
variety of strategic-arms offers, while he nonchalantly dusted off
Dwight Eisenhower's "Open Skies" plan (to allow each superpower
overflight inspections of the other's territory) and suggested a
reduction in chemical weapons that Congress had long since ordered
him to make. His offer of economic assistance to Poland and
Hungary, as they attempt to loosen the shackles of the Communist
economic system, seemed to be just another example of big talk and
small deeds -- an impression offset only slightly when Congress
pressured him to increase a proposed grant to Poland from a measly
$115 million to a ho-hum $315 million.

    In its day-to-day conduct of affairs, meanwhile, the Federal
Government is suffering from malnutrition. The Administration still
has not nominated anyone for 77 senior Cabinet department
positions. The Departments of Interior, Education, Labor and Health
and Human Services have become nearly invisible.The Federal
Aviation Administration's staff is still well below the level that
existed before Reagan fired striking air controllers in 1981 and
is using outmoded equipment to track near gridlock in the skies.

    Long-standing neglect at the Energy Department led to the
dangerous deterioration of Government-run nuclear-weapons plants,
and the department is currently dragging its heels on an estimated
$150 billion effort to get the program back into shape. At the
Department of Housing and Urban Development, new Secretary Jack
Kemp is busy mopping up after eight years of Reagan-era
mismanagement and scandal. The losses are running beyond $4
billion.

    Many in the Administration believe they are in office to shrink
Government. "You liberal writers are just like the Democrats in
Congress," White House Press Secretary Marlin Fitzwater recently
lectured a reporter. "You think Government isn't doing anything
unless it's taxing and spending and creating new bureaucracies."
Yet the Government does still spend mightily where it has a mind
to. The Pentagon has done some tactical trimming but remains the
biggest Government consumer of all. Defense Secretary Dick Cheney
is determined to retain as much as possible of the $2.4 trillion
Reagan-era buildup -- including a scaled-down Star Wars program,
at about $4 billion; the B-2 bomber, at $535 million each; and the
Advanced Tactical Fighter, projected at $65 million each.

    With defense spending unlikely to increase significantly over
the next half-decade, both troop strength and some of those weapons
will have to be sacrificed. Neither the Administration nor Congress
has suggested what to do. In the meantime, Cheney is proceeding
with his own priorities. Because of his belief that there has been
only a temporary thaw in relations with the Soviet Union, the
Pentagon has barely even begun to assess the U.S.'s real defense
needs should the change turn out to be permanent.

    Various support programs for the middle and upper classes are
also humming along nicely. Large-scale farmers and well-to-do
retirees still enjoy federal largesse, as do oil companies and
people earning more than $200,000 (whose income is taxed at a 28%
marginal rate, while a working couple with a taxable income of
$71,900 pays 33%). Those who gain from such Government generosity
vote -- and contribute money -- in disproportionately high numbers
and are the heart of the Republican electoral coalition. As long
as the middle class has remained relatively unaffected by
Washington's retreat, the Republican strategy has paid off
handsomely, most recently in Bush's 1988 election and his
extraordinary 75% current approval rating in the polls. Making sure
the Republican coalition stays intact seems to be the
Administration's major priority. Secretary of State James Baker,
asked to comment on Senate Majority Leader George Mitchell's
criticism of Bush's tepid handling of the situation in the Soviet
Union and Eastern Europe, replied, "The President is rocking along
with a 70% approval rating."

    But a TIME poll last week indicated increasing, if still rather
vague, doubts about the future. Moreover, signs of strain are
beginning to show at the state and local levels. State officials
generally find their constituents as opposed to new local taxes as
they are to the federal kind, except, in several states, when a tax
is earmarked for a specific need: schools, say, or roads.

    In De Kalb County, Ga., however, voters last month
overwhelmingly rejected a 1% hike in the local sales tax, even
though it was intended to offset part of the property tax. De
Kalb's chief executive officer, Manuel Maloof, bemoans the
deterioration of the federal highways and Washington's
unwillingness to provide adequate funds for the national highway
system and toxic-waste removal. But Maloof, a Democrat, is even
more upset at his own inability to repair his county's sewers and
pipelines. "It's all a residue of Ronald Reagan," Maloof says."He
did more than most by telling us you don't have to pay taxes even
though you still have needs."

    The consequences of such government paralysis are most apparent
in California, where the 1978 Proposition 13 ballot initiative
sparked the antitax revolt that swept the country. Now, with the
state government hobbled by tax restrictions and unable to respond
to public pressure, citizen initiatives have mushroomed. California
had 29 propositions on its ballot last year on matters ranging from
limits on auto insurance to new tobacco taxes. William Zimmerman,
who helps organize such voter initiatives, admits that they are not
the best way to handle complex issues. But, he says, "if the
alternative is no action, I'll take the flawed solution."

    Citizen initiatives can be an example of democracy at work. But
in this case they are symptomatic of governmental decay at all
levels. Once a great engine of social and economic improvement, the
Federal Government began to lose its bearings in the '60s and '70s
in the midst of wars, both cold and hot, domestic upheavals and a
worldwide economic revolution. As the nation's economic base began
to contract, some basic elements of the American Dream --
homeownership, a college education -- began slowly to recede. The
Government responded fitfully to these developments and eventually
took on the form of a bloated, inefficient, helpless giant.

    Jimmy Carter in 1976 and, far more stridently, Ronald Reagan
in 1980 performed a valuable service by calling attention to the
giant's weaknesses. But Reagan's approach, once he was elected,
was fundamentally flawed. So is George Bush's. Government was not
the problem. The problem was, and still is, that the country was
being governed badly. The conservative complaint that only liberal
elitists think Washington must actually do something is
self-evidently silly. Of course, the Government must do something.
That is why it exists: to act in ways that improve the lives of its
citizens and their security in the world. The list of missed
opportunities and ignored challenges is already much too long. The
sooner Government sets about doing its job again, the better.


-- Dan Goodgame and Richard Hornik/Washington, with other bureaus