Domenici, Known as a Doomsayer, is Winning Fight for Balanced Budget

August 06, 1995|By JEFF SHEAR

As the Senate was about to vote on a resolution to balance the federal budget by 2002, Rep. John R. Kasich, Republican of Ohio, slipped into the Senate chamber. Grinning happily, arms folded across his chest, the spirited young chairman of the Budget Committee looked upon a scene of Republican triumph, not unlike the one he had helped engineer a week earlier in the House.

Senate Budget Committee Chairman Pete V. Domenici, Republican of New Mexico, spotted him standing at the center door and strode up to the aisle to meet him. The two men grabbed each other in a bear hug.

They made a striking contrast. Mr. Kasich looked charged up in his unbuttoned blue blazer and checkered power tie. Mr. Domenici, a little stouter and slower-moving, had an avuncular air -- the Senate's version of Walter Cronkite.

Since the beginning of this year Mr. Kasich has been fond of quoting Mr. Domenici's explanation of their relationship: "Pete says that I'm the coffee and he's the cup."

Chatting with Mr. Domenici at the rear of the chamber, Mr. Kasich mentioned a letter that the Conservative Action Team, a group of House members who call themselves the CATS, had sent to House Speaker Newt Gingrich. The letter, signed by 81 members, said, "You can count on our votes against any budget resolution conference report that fails to balance the budget or significantly diminishes tax relief passed by the House."

The letter highlighted differences between the House and Senate versions of the budget resolution. Where the House wanted tax reductions on the order of $350 billion over seven years, Mr. Domenici had refused to consider any tax measure until all spending cuts that would lead to a balanced budget were in place and certified by the nonpartisan Congressional Budget Office.

Mr. Domenici understood the letter for what it was: an ultimatum to the Senate. His response to Mr. Kasich, according to Democrats who heard about the exchange later from Mr. Domenici: Ultimatums belong in the trash.

Coming from Mr. Domenici, the comment was no bluster or bravado. Nor was it a putdown of Mr. Kasich, the self-described "supply-side deficit hawk."

Around the time Mr. Domenici and Mr. Kasich were embracing, Phil Gramm, Republican of Texas, stood before the Senate to deliver an ultimatum of his own. Just a day earlier, he had been soundly defeated on a tax-cutting measure that was much like the one offered by Mr. Kasich in the House. But Mr. Gramm, who is running for the presidential nomination hard on the heels of Majority Leader Bob Dole of Kansas, was unbowed.

"I want my colleagues to understand," Mr. Gramm told the Senate, "that unless . . . we let working families keep more of what they earn, unless we provide incentives for growth, . . . I am not going to vote for that budget."

But Mr. Domenici had a message of his own. In his view, Republicans finally had within reach the goal they had espoused since Ronald Reagan became president: a balanced budget. If they failed to pass a budget resolution that balanced the budget -- and if they failed to do so over the issue of tax cuts -- the electorate would surely take revenge.

Mr. Domenici prevailed: The Senate approved his budget resolution, 57-42, and overwhelmingly defeated Mr. Gramm's effort to add $350 billion in tax cuts to the package.

In the end, Mr. Domenici emerged from the budget conference reaching a compromise rather than facing down an ultimatum. Where he had wanted to hold tax cuts to $170 billion, and the House called for cuts on the order of $350 billion, Mr. Domenici split the difference and settled for $245 billion.

Mr. Domenici and Howard H. Baker Jr. are close friends, but there were times in the early 1980s, when Mr. Baker was Senate majority leader, that Mr. Domenici was a painful thorn in his side.

"The purity of Pete's position and his strength in defending and ++ controlling expenditures got in the way of my political instincts," Mr. Baker said in a recent interview, recalling Mr. Domenici's role as Budget Committee chairman during the early years of the Reagan administration. "Mr. Domenici was never happy over the issue of unspecified savings that we used in the first Reagan budget," Mr. Baker said. "I dubbed them 'the magic asterisk.' Pete chortled and jeered over that." The asterisk was a $44 billion shortfall with a footnote saying that explanatory material would come later.

Since joining the Senate in 1972, Mr. Domenici had earned a reputation as a straight arrow. But he also was viewed as a worrier and doomsayer.

Former budget director David A. Stockman's White House memoir, "The Triumph of Politics: How the Reagan Revolution Failed," says Mr. Domenici admitted as much in 1981, when he warned Mr. Reagan of an impending explosion of deficits.

"Mr. President," Mr. Domenici began, "I don't like to be the guy with the bad news."

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