Authors: Hedrick Smith
Tax reform, declared Republican National Chairman Frank Fahrenkopf, “will go a long way toward making the Republican Party the majority party. What we’re reaching out for is the last bulwark of the Democratic party: working people, families—especially large families—and not only ethnics but blacks, Hispanics, Catholics. This is a reach by the conservative movement to bring these people into the Republican party.”
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Rostenkowski’s task was tricky. Tax reform appealed to him; he wanted a bill that would refurbish his image as a can-do leader who could pass big legislation. But his opposition game was aimed really at keeping Reagan from taking the lion’s share of the credit. He had to blunt the Republican drive to use tax reform to build long-term Republican appeal with the voters.
By instinct and habit, Rostenkowski fell back on the strategy Rayburn and Johnson had used with Eisenhower. Rayburn’s motto had been “To get along, go along,” and Rostenkowski adapted it to his situation. For junior members, that meant supporting the elders and working your way up patiently through seniority. For an opposition leader facing a popular president, it meant aligning with him publicly and then quietly revamping his proposals—keeping the brand name and changing the product inside the box. Remodeling: That’s what Rostenkowski did with Reagan’s tax-reform plan. His variation of the positive-sum game was proclaiming alliance with Reagan, putting a Democratic stamp on the tax bill, and then boxing the president in to accepting policy changes.
Success required a clever balancing act. He had to fend off schemes of rival Democrats. Liberals wanted to sock a minimum tax to corporations and use it to cut the deficit. Second, Rostenkowski had to build a committee majority, playing on personal ties and team loyalties. Sheer doggedness paid off. Third, he and his staff had to maneuver the committee to rework Reagan’s plan and give it a Democratic flavor. Fourth, he had to keep Reagan quiet, at bay, and in harness even while revolt was rumbling in the Republican ranks. And finally, when Reagan waffled and Republicans mutinied, he and Speaker O’Neill had to pressure Reagan to rescue Rostenkowski’s bill.
As an old-breed politician with twenty-six years in Congress, Rostenkowski played a different game from the one the new-breed moderates played. His long suit is not drafting policy papers, doing TV interviews,
or writing op-ed articles. Substance is not his forte. He is a vote counter, a bargainer, a tactical leader. He works the insider’s skills in caucus and committee: horse-trading and bluffing, man-to-man talk, facing down recalcitrants, parceling out plums, protecting his turf, and playing to the peculiar pride and passions that remembers feel for their committees. He admitted he would rather have become House Democratic whip than chairman of the tax-writing Ways and Means Committee, but O’Neill pushed him to take the committee job.
“I like the floor action much more,” he told me. “You know, the maneuvering around the floor, the counting heads, getting people lined up. And then the Ways and Means Chairmanship just isolated me because I’m sitting there studying, trying to understand what the hell I’m doing.”
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Ways and Means, one of the premier committees in Congress, became the symbol of Rostenkowski’s power and the key to his game. It was what forced Reagan and Treasury Secretary James Baker to deal with him. He commanded the gates through which any tax bill had to pass. But that committee can be hard to manage; its members run the ideological gamut. Since they write tax law, they are targeted by almost every lobbying group and are prone to protect state and regional interests. Despite a 23–13 Democratic majority, the unruly committee nearly trampled Rostenkowski but he managed to ride the tiger. “He played the committee like Yehudi Menuhin plays a Stradivarius,” Henson Moore, a Louisiana Republican, remarked admiringly.
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Outside of Washington, people pay attention less to committees than to the televised debates on the House or Senate floor. But by the time legislation hits the floor, it has been shaped in committee. Usually, only a few choices remain: an up-or-down vote or a few big amendments.
For most members (and lobbyists), the committee is the prime arena, the focal point for influence and action. But a committee is much more: It is a political home for members of Congress, an anchor of personal definition. Committees have their own personalities and identities: Agriculture; Armed Services; Energy and Commerce; Judiciary; Interior and Insular Affairs. They are hubs of members’ lives, the focus of work and ideas, the sources of power and advancement, cozy dens of camaraderie. Politicians gravitate to committees of interest to them personally or to their regions. Then, they spend ten years, fifteen years, their entire careers on one or two committees with the same colleagues. They virtually live together. Relations can be close or fractious.
A chairman can be a boss, a team coach, a father figure, or his members can defy or ignore him.
Rostenkowski—everyone calls him Rosty or Danny—runs the Ways and Means Committee like an extension of Chicago ward politics. Rosty is not only the congressman from Illinois’s 8th District, an ethnic (largely Polish) blue-collar enclave in Northwest Chicago. He is also the committeeman or boss of Chicago’s 32nd ward. His dad, Joe Rostenkowski, was the ward boss, too. As a boy, Rosty used to help his dad deliver Christmas packages to the needy, and some folks would write
Joe Rostenkowski for President
on their ballots. Rosty still lives in the brick home built by his grandfather across from St. Stanislaus Kostka Church. His wife and four daughters never moved to Washington, and Rosty commuted home on weekends.
In an era of video politicians who rarely work the street or step inside a political clubhouse, Dan Rostenkowski is one of a declining breed: an organization politician. He was schooled in the machine politics of Chicago’s big boss, the late Mayor Richard Daley, who tapped Danny for the Illinois legislature and then for Congress. Rosty follows the rules of organization politics: A handshake is a firm deal; a politician’s word is his bond; play with your own team; never forget who crosses you.
Rosty is a likable pile driver: six foot two, over two hundred pounds, with the brawn and force of a Chicago Bears linebacker. He has a gravel voice and sometimes the syntax of a stevedore. But he dresses Ivy League, in a trench coat, charcoal gray suit, a rep tie and button-down shirt. Now in his late fifties, his rusty hair is thinning, and when he smiles, his face creases and his eyes become little slits squinting beside his ski-jump Bob Hope nose. You notice his hands: They are big, strong, and constantly in motion, rapping the table, gesturing, pointing, persuading, directing. He acts out scenes. In a restaurant, telling me how he handled one foe, he reached across the table to jab a large index finger into my chest, and declared, “I’m targeting tax reform.” Or as he told how House Republicans opposed it, up went his big basketball hands, palms out, fingers spread, defying passage. He is such a natural ham that I asked whether he had done any acting.
“Yeah,” he said, chuckling. He had at St. John’s Military Academy in Wisconsin. “I was never good. I was a football player and a basketball player, and the drama coach, he thought it was good to have all the basketball players and the football players do some theater. So we did. We were called the Swagger Stick Club.”
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After two years in the Army during World War II, Rosty got a shot at playing professional baseball with the Philadelphia Athletics. At
twenty-three, he was in the Florida Grapefruit League, and his dad wanted him to come home.
“Are you gonna be Babe Ruth?” he needled Rosty. “Are you gonna be Lou Gehrig? You’re a late swinger. Forget it. You can’t hit the goddamn golf ball. Come on home and go to school. Your mother’s sick.”
Rosty gave up baseball, went home, finished Loyola University, and went into politics. His decades in the Daley machine made him a staunch Democratic partisan. Ironically, they also made him receptive to alliance with Reagan, for that experience imbedded not only partisanship but awe of authority, especially of the presidency. Rosty was immensely flattered when, in 1981, Reagan shrewdly rescheduled his first State of the Union address to accommodate Rostenkowski, who had a long-standing speaking engagement in Chicago. Despite their clashes in 1981, Rosty spoke proudly of working with the president on trade legislation and aid to the Caribbean basin. As one pol sizing up another, he found Reagan an awesome stump politician. “He makes all the right moves,” Rosty gushed. In his macho way, he bragged about dealing with Reagan man to man on tax reform.
The irony is that Rostenkowski is not a reformer by nature. “That really isn’t my chemistry, reform,” he confessed to me. “I’m a businessman. I’ve always been a businessman. I like deductions.… I enjoy going to dinners. I enjoy walking in restaurants. I enjoy taking the check. I enjoy meeting people and being with people. That’s my whole life-style.”
The part about being a businessman isn’t literally accurate. Also, Rosty is more likely to be on a corporate junket collecting a fancy lecture fee than picking up the dinner tab. But his comments suggest how he views himself. He’s climbed from Chicago ward leader to major figure on the national scene, and he’s proud of making it. His constituents may be blue-collar, but with Daley-style pragmatism, Rosty has kept a protective eye out for Chicago business. He has written plenty of business tax breaks into law, especially in 1981, and he likes hobnobbing with corporate CEOs. “What atmosphere do I ever expect to live in when I leave Congress?” he asked rhetorically. “I want to mingle in this community of business activities. Where has my life been? My life has been in the business community.”
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Nonetheless, by 1985 he was bitter at the “deceit of business” in exploiting the enormous tax credits, depreciation write-offs, and other corporate loopholes in Reagan’s 1981 tax plan. Angrily, he recalled having fought to ease the tax load of the steel industry and corporations
like General Electric as a stimulus to economic growth, only to see them plunge into mergers and paper deals rather than reinvesting. In 1985, he was eager to correct the damage, curb the excess, and see more fair play put into a tax system where his grown daughters on modest salaries were paying more taxes than multimillionaires with tax dodges. Moreover, Rosty wanted a trophy. He wanted a legacy attached to his name. He bucked the conventional wisdom that passing tax reform was impossible, feeling that success might give him an outside shot at being speaker when O’Neill retired in 1986. Alliance with Reagan held all that promise.
Rosty to Reagan: “Keep Your Powder Dry”
Getting into the ring on tax reform with the nation’s undisputed political champ required fancy footwork. For a year, Rostenkowski had to bob and weave, jockeying between cooperation and independence from the president. His improvised opposition game went through five phases: touching gloves in alliance with Reagan; jabbing back at Democratic rivals and skeptics; putting the Democratic mark on the tax bill; getting Reagan to hold off his counterpunches; and finally, maneuvering Reagan into a corner where he had to get Republicans in line.
It was a tricky relationship that required Rosty’s keeping some distance from Reagan. If the Democrats were to share the political credit, Rostenkowski’s partnership with Reagan had to be loose. He could not agree to a precooked deal or he would get politically smothered. In early 1985, Treasury Secretary Jim Baker and his deputy, Richard Darman, tried to lure Rostenkowski into crafting a joint bipartisan tax proposal. They wanted him on board before the president’s plan was unveiled. But Rosty refused. Burned by Reagan’s backing away from a deal in 1981, he was leery of being fooled the second time around. Also, if Baker and Darman wrapped up Rosty, he would have no bargaining chips to bring his committee Democrats on board. Finally, he was jealous of institutional prerogatives.
“I’m the chairman of the committee,” he told Reagan’s men bluntly. “You get the ball off to me, and I’ll handle the ball. We’re [the committee] going to write the bill.”
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Echoes of former congressional barons: Rosty could afford a bit of swagger because he knew House Republicans would balk at a reform bill hitting business with $125 billion in additional taxes over five years. Reagan’s plan brought the maximum individual tax rate down from 50 percent to 35 percent, cut the capital gains rate from 20 percent to 17.5
percent, raised the personal exemption from $1,000 to $2,000, and took 6 million poor off the tax rolls. And it lowered the corporate tax rate from 46 percent to 33 percent. But it was not a Republican-style bill; it paid for those tax reductions by revoking the corporate investment tax credit and closing some corporate loopholes. To pass it, Reagan needed mainstream Democrats, meaning Rostenkowski.
In public, Rostenkowski wrapped himself in Reagan’s banner but raised the Democratic flag, too—never more artfully than on May 28, after Reagan unveiled his plan on national television. Rosty’s response was classic one-upmanship, an exercise in playing the opposition game sotto voce. Like O’Neill, Rostenkowski altered his style and tried video politicking.
Never a TV star and always reluctant to be paired on television opposite Reagan, Rosty surprised everyone with a polished performance. He had hired Joe Rothstein, a media consultant, who put him through rehearsals with a TelePrompTer. Rothstein made the square-faced Chicago ward boss swap his spectacles for contact lenses, primped his makeup, showed him a relaxed, folksy delivery style, and told him to smile. Rostenkowski’s speechwriter, John Sherman, delivered a slick text which claimed tax reform as a Democratic issue since Harry Truman and welcomed Reagan as a maverick Republican. It was pitched deftly at the blue-collar Knights of Columbus crowd that Danny grew up with and that Reagan wanted to steal away from the Democratic party. Rosty identified with their bellyaches.
“Every year politicians get up and promise to make the tax code fairer and simpler—but every year we seem to slip further behind,” he said. “Now most of us pay taxes with bitterness and frustration. Working families file their tax forms with the nagging feeling that they’re the country’s biggest chumps. Their taxes are withheld at work—while the elite have enormous freedom to move their money from one tax shelter to another. Their bitterness is about to boil over. And it’s time it did. But this time there’s a difference in the push for tax reform. This time it’s a Republican president who’s bucking his party’s tradition as protector of big business and the wealthy. His words and feelings go back to Roosevelt and Truman and Kennedy. But the commitment comes from Ronald Reagan. And that’s so important—and so welcome.… A Republican president has joined the Democrats in Congress to try to redeem this long-standing commitment to a tax system that’s simple and fair.”
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