The year is 1981, the uncertain dawn of the supply-side revolution. David Stockman, Ronald Reagan's Budget Director, is standing in the White House parking lot talking with Richard Darman, a powerful presidential assistant. A crisis is at hand: frenzied Republican and Democratic lawmakers are piling additional giveaways onto Reagan's tax-cut bill. Unless they can be stopped, ( the nation will be burdened with deficits in the hundreds of billions for years to come. "I don't know which is worse," says Darman, "winning now and fixing up the budget mess later, or losing now and facing a political mess immediately."
Moments later, Darman has reached a decision: "We win it now. We fix it later."
Later is now. And as the budget debacle in Washington demonstrated, Darman still has found no way to repair the fiscal fiasco that he, as much as anyone else, helped create. Last week, after more than five months of closed-door negotiations, he watched as timorous rank-and-file House members defeated a painfully crafted deficit-cutting deal worth $500 billion over five years. For once, Darman's goals had been economically laudatory, even politically reasonable. He had wanted to solve the deficit problem by shifting the government onto a healthier diet of lower borrowing. He had envisioned an end to an era of divided, do-nothing government. And he had desired to extricate his boss, George Bush, from his crippling "no new taxes" campaign promise. The long-term strategy was obvious: even if Bush took a drubbing for raising taxes in 1990, he would put the country on a stronger economic path. That could help ensure his re-election in 1992. Darman was thinking anew: "Fix it now. Win it later."
Too clever by half. For the nearly 20 years that Darman has been shaping policy in Washington, that has been his reputation. A manipulator who could not be trusted. A hypocrite who, even as he preached against the shortsighted "now-nowism" that has afflicted American society, used ludicrously optimistic economic forecasts to delay the day of reckoning with the looming budgetary disaster. Former Senator Howard Baker even coined a word to describe his elliptical gambits: Darmanesque.
Not even Bush, who often trusts too freely, trusted him. The enmity began in 1984, when Reagan's re-election campaign was getting under way. Briefing reporters on economic policy at Reagan's Santa Barbara, Calif., ranch, Bush refused to rule out new taxes to cope with a growing budget deficit. Headlines appeared the next day, angering Reagan aides. A few days later, news stories, quoting a senior official, blasted Bush for the misstep. Bush's aides fingered Darman as the source. Bush crossed him off his A list.
Rehabilitation took five years. High as leaking was on Bush's list of unacceptable behaviors, "handling" was even higher. Bush thinks of himself as resistant to manipulation of any kind, and Darman had been perceived as one of Reagan's dexterous puppeteers. But heavy lobbying by James Baker, who with Darman formed an inseparable duo in the early Reagan years, eventually persuaded Bush to appoint Darman Budget Director. "When we went to see Bush about the OMB job," said Craig Fuller, Bush's transition co-director, "we only took one name."