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Subject: National Issue
Date: Wed, 28 Oct 92 13:12:52 EST
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10/28/92

TITLE National Issue HAS DARMAN BEEN BUSH'S UNDOING?


New Revelations Confirm Conservatives' Suspicions

Thomas McArdle In New York In President Bush's debate rehearsals,
budget director Richard Darman played the role of Bill Clinton.


Ironically, critics say, Darman's own actions in recent weeks may
have undercut the White House far more than the Democratic
candidate's verbal attacks in the campaign.  Indeed, Darman is
fast becoming the favorite target among conservative activists
who criticize the Bush administration. To a great extent, Darman
has come to symbolize everything that's wrong in the Bush
presidency to the Reagan wing of the GOP.  Many longtime Reagan-
Bush supporters who fear the president's re-election campaign is
going down in flames have been particularly angered by recent
revelations about the behind-the-scenes role played by the Bush
administration's director of the office of management and budget.
The depth of their anger may be a bad omen for the president.
Even assuming that Bush pulls an upset victory next week, his ef-
fectiveness would be severely hurt in the second term from that
loss of support among conservatives. Therefore, Darman has become
an issue himself - to some, almost as important as taxes, health
care or increased spending on infrastructure.  Those activist,
anti-tax conservatives blame Bush for sticking with Darman - and
say that if the president loses, it may be due to Darman's poli-
cies as budget director.  During Darman's tenure, America's budg-
et deficit surged from about $154 billion in 1989 to an estimated
$330 billion this year, despite a major tax darman

increase. Darman's critics blame him for the subsequent weak
economic growth. Conservatives say that weakness is a result of
higher taxes and a surge in government regulation.  After a long
hibernation following the tax-filled 1990 budget agreement that
he had a strong hand in crafting, Darman has resurfaced on the TV
talk show circuit in recent weeks, just as criticism of him has
gotten most intense.  Several of the same economists and former
policy-makers who have been urging Bush to revamp his Cabinet
right away - to prove he means business about change in a second
term - are also now saying Darman should be fired.  They not only
give Darman failing marks on the economy during his tenure as OMB
chief, but also say that recent impolitic remarks attributed to
him have hurt the president's re-election chances.  They feel
most betrayed by recent revelations in a series of articles by
Washington Post editor Bob Woodward. The articles say Darman ar-
gued strongly against Bush's no-new-taxes pledge before the
president decided to make it the centerpiece of his acceptance
speech at the 1988 Republican convention.  "I am shocked and
stunned by these revelations," said Lawrence Kudlow, chief
economist for Chemical Banking Corp., former deputy budget direc-
tor for the Reagan administration and a leading supply-side voice
on Wall Street.  "It is inconceivable to me that the president,
having run on a no-new-taxes pledge in 1988, would then turn
around and hire as his budget director someone who was clearly
arguing against that pledge and in favor of a high-tax budget
summit - which is to say the president in 1988 never meant what
he said in the first place." Kudlow added: "It is also remarkable
that Darman testified in his confirmation hearings and to the
House Budget Committee and the Senate Budget Committee, taking
the no-tax pledge HAS DARMAN BEEN BUSH'S UNDOING?


when in fact he had no such thing in mind." Kudlow, a Reagan sup-
porter, is so incensed that he has been telling reporters that
some aspects of a Clinton administration economic policy would be
superior to the policies of a second Bush term.  "With Darman
having Bush's full confidence and presumably carrying over into
1993, what credibility does President Bush have?" Kudlow's not
the only one who's mad.  To Daniel Mitchell, an economist at the
Heritage Foundation in Washington, the buck stops with President
Bush.


"Bush is an incompetent manager who, despite being Ronald
Reagan's vice president for eight years, never understood that it
was Reagan's policies that made the economy grow and made Reagan
popular," according to Mitchell.  This need not have been the
case, however, and that is where Darman's fault lies, in
Mitchell's view.  "Bush was manipulated. . . . (His) mistake was
that he appointed the wrong people. He himself knows nothing
about economics or domestic policy, and he was willing, in ef-
fect, to turn it over to his advisers." Alan Keyes, former
president of Citizens Against Government Waste in Washington and
currently the Republican nominee for U.S. Senate in Maryland,
also expresses displeasure.  "I said in the past, and I say now,
that having someone like Dick Darman at the helm was a major
problem and did undermine the administration's credibility, be-
cause he was saying things that both undercut the kinds of things
that have been accomplished during the Reagan years and . . .
contradicted what the Bush administration had declared during the
campaign were its goals."


Achievements Tarnished

The result, according to Keyes, is that the achievements of 12
years of Republican control of the White House are badly tar-
nished.  "You now stand at a position where the Democrats can
say, 'Oh, these 12 years were terrible,' and you can actually
trot out speeches in which Richard Darman is agreeing with them,"
Keyes said. "That has badly hurt the president." Darman, with his
long record of public service in a half dozen different positions
in government, in the past has been quick to flaunt his record of
credibility as a frequent witness before Congress, going all the
way back to the early 1970s. These new revelations may blemish
that reputation.  "I would question whether anybody who would go
through that entire record will find anything in that whole
record that misled the Congress in any way," Darman said during
his confirmation hearings in January, 1989.  "I do have faults,
obviously . . ." Darman added, "but one of them is not misleading
the Congress." But if the new revelations about Darman are
correct - and Darman is believed to have spent many hours talking
with Woodward - it seems he misled Congress only minutes before
making this statement.

"I have no policy interest in raising taxes," Darman told Michi-
gan Democrat Carl Levin.  "I do not foresee the circumstance in
which I would make such a recommendation," he said, a statement
he repeated.

A war or "a situation where we have definitively exhausted all
opportunity for addressing the problem on the spending side" were
two exceptions Darman gave.  But if all avenues on the spending
side were exhausted, Darman said even then there would be one
more "important qualification" before he would push for new
taxes: the "president's credibility," which would suffer from
breaking the pledge.  All of this is starkly at odds with the
picture Woodward portrays.  "For Darman, who aspired to be budget
director in a Bush administration, such a pledge would be prepos-
terous," Woodward reported recently of the time Bush's 1988 con-
vention speech was being formulated. "It was Darman's view that
Bush, if elected, would surely need the option of new or in-
creased taxes because of the growing federal budget deficit."

Resignation Refused

Darman described the pledge to speechwriter Peggy Noonan and
media consultant Roger Ailes as "stupid and irresponsible," ac-
cording to Woodward.

Earlier this year, when Bush told the country that breaking the
pledge was a mistake, Darman offered his resignation. The
president refused it.  When Woodward's revelations surfaced about
Darman earlier this month, Bush publicly expressed confidence in
Darman even though it appeared that Darman was never serious
about supporting the no-tax promise.

But other sources close to the formulation of the "read my lips"
speech say Darman made no such objections against the no-tax
pledge at the time and that his remarks to Woodward amount to
revising history to save his reputation.  At the outset of the
Bush administration, some anti-taxers in Washington saw Darman as
their champion on the president's staff.

Sen. William Roth, the Delaware Republican who co-authored the
Kemp-Roth income tax cuts of 1981, for instance, was effusive in
his praise of Darman at his confirmation hearings.  "I am very
confident of what Mr. Darman can and will do," Roth said in his
opening statement. Roth spoke of "the successes we have had in
the past eight years, with the help of Dick Darman, to temper the
tyrant of taxation," and he called Darman "a brilliant and proven
administrator" who "will be able to implement the promise of the
Bush administration and keep the recovery rolling." But, accord-
ing to insiders' accounts, including that of former Treasury
Department official Paul Craig Roberts, Darman joined with White
House chief of staff James Baker to attempt to derail or water
down the Kemp-Roth tax cuts several times during the Reagan ad-
ministration.

There were telltale signs that the tax pledge was not etched in
stone even before Election Day 1988 to those in the right Wash-
ington political circles. At a private meeting of about 35 lobby-
ists and former government officials during the campaign,
Reagan's White House chief of staff, Ken Duberstein, said, "After
he's elected, when the occasion arises, he will come up with new
taxes." The attendee of this meeting who gives this account then
asked Duberstein, "Are you saying the vice president (Bush) is
not telling the truth?" According to him, "The answer was


According to Rep. Dick Armey of Texas, the ranking Republican on
the Joint Economic Committee, he became worried from the spring
of 1989, when both Darman and Rep. Leon Panetta, chairman of the
House Budget Committee, began using the term "slide-by budget"
about Bush's first-year budget.  "I asked Panetta one day, 'Where
is it you and Darman are trying to slide to when you slide by
with this budget?' " Armey recounted. "And Leon said, 'We believe
if we can slide by this first year after the campaign that we can
get the president into a time sequence in which he can accept an
increase in taxes." "I always took that 'we' to be him and Dick
Darman, though I never knew for sure, because he never spelled it
out."

Panetta could not be reached for comment.  Armey added: "Of
course, that's why my antennae went up and I started hollering
'danger' in January of 1990 when Darman began discussing a budget
summit. I felt like that was the whole object of the summit: a
negotiated deal with a tax increase in it." Armey took the risk
of calling for Darman's resignation two years ago out of suspi-
cions that he was up to exactly what Woodward's series now seems
to confirm.  What makes Darman tick?  Many who have dealt with
him as OMB director say his overwhelming aspiration during the
Bush administration was to be its great dealmaker. To get
Congress and the president both to accept a grand, unpopular,
long-term budget accord required both a mastery of the minutest
details of the federal budget process and an understanding of the
political big picture.

In a sense, it was the ultimate achievement for a high-level
career public servant, and Darman never had to solicit a single
vote.  Darman's speeches are filled with broadsides against the
kinds of populist sentiment that win elections.


He complains about the "I want my Maypo" mentality, taken from a
television commercial popular in Darman's youth. He rails against
"now-now-ism," referring to the public's lack of patience. He
talks about "Hubbleism," when government attempts massive, com-
plex projects - only to see them fail due to the simplest of
flaws, like the Hubble Space Telescope project.  But in the end,
the key to Darman may be found in his resume. Since 1971, he has
served in the departments of Health, Education and Welfare, De-
fense, Justice, Commerce, Treasury and the White House.  He gra-
duated from and has lectured on government at Harvard, is the
protege of the quintessential good government Republican Elliot
Richardson, and has been a fellow at Brookings Institution. He
has also been a member of Washington's most prestigious social
club since 1978, the Metropolitan Club.

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