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Tuesday, Sen. Phil Gramm of Texas announced his intention to retire
when his current term expires. In a political career spanning 23
years, four decades, and two political parties, Sen. Gramm never
developed a national following. This obscures his place in our national
history. No member of Congress — not Jack Kemp, not Newt Gingrich,
not Bob Dole — played a more decisive role in launching the
Reagan agenda.
As a second-term
Democrat congressman on the House Budget Committee, Gramm coauthored
and cosponsored the original "Gramm-Latta" Reagan budget.
But he did more. He organized, cajoled, and delivered the 30-to-45
"Boll Weevil" Democrats without whom President Reagan
couldn't have enacted his 25% across-the-board tax cut or the military
build-up that turned the Cold War.
Economics was
Phil's first career. A military brat, son of high-school dropouts,
Gramm flunked repeatedly in elementary school — then bulled
his way into college, graduate school, and a prestigious teaching
position. Working in the Texas A&M economics department, he
learned, taught, and published studies in monetarism, free markets
and public choice. But it was Gramm's critique of energy controls
that brought him to politics.
Texas circa
1970 was ground zero for opponents of the fuel caps of the Nixon,
Ford, and Carter administrations. It was a place where a free-market
thinker could find financial backing from powerful gas and oil interests.
Phil's impassioned defense of market-based energy prices catapulted
him to the attention of Texas power brokers. His ambition and intelligence
did the rest.
As a freshman
Democrat congressman, elected from Texas's 6th District in 1978,
Gramm drafted the amendment that thwarted President Carter's gas-rationing
plan. His maiden speech, delivered on Republican time, called for
a debt-ceiling freeze and a balanced budget amendment.
On other issues,
Gramm allied with geopolitical and cultural conservatives. He took
a staunch anti-Communist line on foreign policy, opposing the ratification
of the Panama Canal Treaty. On the great social issues of the day
— the sanctity of unborn life, welfare reform, and the right
to bear arms — Gramm consistently sided with the Right.
Majority Leader
Jim Wright advanced Gramm to the powerful House Budget Committee
in his 1981, hoping to curb his conservative tendencies by enhancing
his influence within the Democratic party. But Gramm allied with
the president-elect, and played a key role in passing the Reagan
agenda in 1981 and 1982.
"I think
the Democratic party is in trouble — not Phil Gramm,"
he told his critics. "I'm riding my donkey off into the sunset
following Thomas Jefferson, who said, 'If we can prevent the government
from wasting the labors of the people under the pretense of caring
for them, they will be happy.' So I'm on Jefferson's side. I don't
know who these other boys are following."
Wright retaliated,
stripping Gramm of his Budget Committee assignment. Two days later,
Jan. 5, 1983, Phil resigned his seat in Congress — and announced
his candidacy for the same as a Republican.
He won handily.
His example taught serious southern conservatives that the Democratic
party had no place for them, and that the political penalty for
party shifting was minimal.
As a freshman
Republican senator, elected in 1984, Gramm engineered the spending
restriction for which he is best known. The Gramm-Rudman-Hollings
Balanced Budget and Emergency Deficit Control Act of 1985 divided
the federal budget deficit into five equal increments, reducing
it each year by one-fifth. Congressional failure to meet a series
of deadlines for appropriations triggered an automatic, across-the-board
sequester of funds, divided equally between defense and non-defense
programs.
Under "Gramm-Rudman",
the federal deficit fell both absolutely and as a percentage of
Gross Domestic Product: from $232 billion in 1986 — 5.2% of
GDP — to $152 billion in 1989 — 3% of GDP.
During his
unsuccessful run for the presidency in 1996, Gramm's Republican
opponents used his reputation as a deficit hawk to criticize his
understanding of incentives. But in fact, the economic program he
championed in the early 1990s with Sen. Robert Kasten and Rep. Newt
Gingrich was distinctly supply side. It included indexing and rate
reductions of levies on capital gains; a "universal" IRA
for education, medical expenses and home ownership; and increased
business credits for research, development, and capital investment.
One of the
least appreciated aspects of Phil's career is his role in the G.O.P.
victory of 1994. A 57-member Democrat majority blocked supply-side
proposals during the first Bush presidency. But under Gramm's leadership,
1991-to-1994, the National Republican Senatorial Committee (NRSC)
increased a 43-member G.O.P. minority to a 53-member Senate majority.
In 1993 and 1994, Phil logged 286 days on the road campaigning for
fellow Republicans. During his watch, the NRSC raised $121,344,214
from 3,302,040 contributors — a record at that time.
Gramm continued
to drive policy. He was the heart and brains of the G.O.P. counterattack
against Hillary Clinton's health-care proposals. If Newt Gingrich
deserved the leader's mantle for designing the G.O.P.'s 1994 election,
Phil Gramm was his close second.
Oddly, Sen.
Gramm's own race for the presidency, backed by National Review,
was a ham-fisted disaster. Combining a mania for detail with an
insular ignorance of grassroots sentiment, the Gramm for President
effort foundered on its inability to win over the Reagan conservatives
who were its natural constituents. The $23 million juggernaut drowned
in a sea of consultants.
In subsequent
years, Gramm settled into his role as a senior statesman, working
with quiet effectiveness to deregulate financial institutions, increase
the efficiency of markets, and balance the conflicting interests
of employers and taxpayers on the delicate subject of immigration.
Conservatives looked forward to the day when he would cap his distinguished
career by chairing the Senate Finance Committee.
Alas, it is
not to be. What makes Phil Gramm's loss so great is his unusual
capacity to apply theory to politics. His dedication to balanced
budgets and supply-side economics were of a piece. Gramm believed
that the destructive incursion of government into the realm of markets
was unassailable as long as deficits concealed the true cost of
government programs. He believed that a balanced budget rule, enforced
by a sequester, would erode his colleagues' incentive to spend expand
government in one of two ways: by training them to fiscal restraint,
or by assuring their defeat if they raised taxes.
The analysis
of campaign-finance reform for which Sen. Mitch McConnell is justly
celebrated was first articulated by Sen. Gramm. Using public-choice
models, he denounced campaign limits as a power play — a Beltway
ploy to monopolize political speech at the expense of the individuals
and groups interested in limiting government. The problem of money
in politics, Gramm taught, was inseparable from the extension of
politics into moneymaking activities. "[T]he way to deal with
the political special interests," he said, "is to eliminate
the actions they are trying to influence."
Finally, Gramm's
retirement denies Republicans their most articulate proponent of
their most beleaguered issue: free trade. "If protectionism
worked," Phil recently wrote, "places like North Korea
and Sudan would be economic colossuses and venture capitalists would
be flocking to invest there, but they are not. To me it seems telling
that the peculiar conditions necessary for world peace are the same
ones required for trade. In contrast, the only practical difference
between war and protectionism is that in the former, enemy fleets
blockade our ports and strangle our economy while in the latter,
U.S. Customs agents do it."
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