Last week the Wall Street Journal published Phil Gramm’s column “Reagan’s lessons in economic leadership.” Gramm took the occasion of President Biden’s signing of the absurdly named and and absurdly destructive Inflation Reduction Act to recall “two previously untold examples of his extraordinary leadership and humanity that I witnessed during the making of the Reagan Revolution.”
Gramm’s anecdotes arise from the Omnibus Reconciliation Act of 1981. Gramm provides this necessary background:
In 1980 I was a freshman Democratic congressman from Texas. Rep. David Stockman (R., Mich.) and I offered a substitute for President Carter’s final budget. Reagan appointed Mr. Stockman director of the Office of Management and Budget, and our bipartisan proposal became the foundation of the Reagan budget. Rep. Delbert Latta of Ohio, ranking Republican on the House Budget Committee, and I jointly authored the Reagan budget in the House. The word is overused, but I feel confident in calling the Gramm-Latta budget transformative.
While the budget was a dramatic change in public policy, the initial vote set only broad parameters, cut no programs, and was easily passed. The reconciliation bill implementing it was the most difficult vote of the Reagan era. It contained the largest postwar cuts in domestic spending and eliminated three Social Security benefits to address the impending bankruptcy of the system. While there were strong arguments for ending each of these add-on benefits, a vote to eliminate them meant touching the third rail and endangering a lawmaker’s career.
Getting cold feet, 30 House Republicans asked for a meeting with Reagan to call on him to back off. What happened next? I loved this:
I was asked to join the discussion, and before the meeting I was taken to the Oval Office to meet with Reagan. He asked me what I thought we should do. I said that before offering my advice I needed to remind him that three years ago I was teaching college economics and that I had never done anything remotely this important in my life. Reagan smiled and said, “Well, neither have I.”
When we stopped laughing, I asked, “If we fix one group’s problems, won’t another demand changes? Where do we stop?”
That seemed to be enough for Reagan:
Without responding, Reagan got up and led the way to the meeting. Sitting down at the cabinet table the president said, “You called this meeting, so let me listen to what you have to say.” The first speaker assured the president that he was for our program but he had problems with his constituents. It quickly became clear that the attendees had planned out what they were going to say, and almost every member raised concerns about his constituency. When they had all spoken, the president said nothing for what seemed like five minutes as he looked at each of the 30 members in puzzled silence.
“I have been confused,” he said finally. “I thought this vote was about the future of our country. I didn’t know it was about our political constituencies.” He then got up and walked out of the room. The stunned silence continued for several minutes and more than a few congressmen teared up as they got up to leave. When the final vote was taken, not one person who had been in that room voted no.
The second anecdote is the sequel in which Gramm switched parties and resigned his seat to run again as a Republican:
Republicans lost 26 House seats in 1982, and even with the support of conservative Democrats, Reagan no longer had a bipartisan conservative majority. In one of their first acts, my Democratic colleagues voted to throw me off the Budget Committee. The president and Republicans publicly urged me to change parties, but I had been elected as a conservative Democrat, and I felt that if I just changed parties, some people in my district might feel betrayed.
The only honorable thing to do was to resign from Congress and stand for election as a Republican. While many later saw this as a clever political move, it didn’t feel that way at the time. No Republican candidate for Congress in the history of my district had ever received more than 35% of the vote. On the eve of my resignation I called Lee Atwater, the president’s political director, to tell him what I had decided to do. He told me he believed that I would be defeated and urged me simply to change parties. I said I thought I could win, and it was the right thing to do regardless, so I was going to do it.
Atwater rushed into Reagan’s office and pleaded with him to call me and tell me not to resign. When the president called, he started by telling me that Lee was on the verge of having a stroke—could I please explain what I was doing and why? I explained, and told him it was the right thing to do. To my astonishment, the president agreed: “People have a way of judging a person’s character and knowing when a man is doing right.”
I didn’t discover until after I had resigned, run against nine Democrats and won that Lee Atwater had demanded that the president call me back that day. He predicted that I was going to lose and, in the wake of the 1982 defeats, that it would be the beginning of the end of the Reagan presidency. Reagan responded: “Lee, the whole world does not revolve around me or my presidency. This is about Phil Gramm, and he is doing the right thing, and I can live with whatever the result turns out to be.”
These aren’t fables, but the anecdotes share a moral drawn by Gramm: “To paraphrase Archie Bunker, we could use a man like Ronald Reagan again.”