The Gortons and Slades - Washington Secretary of State

19 | Deficit Hawks
The centeRpiece of suppLy-side ReAgAnoMics was a combination
of spending cuts totaling $41.4 billion and across-the-board
tax cuts for individuals and business—some 25 percent over the
next three years. The largest tax cut in American history cleared Congress
largely intact in July of 1981, costing the treasury $750 billion.
O’Neill warned that the plan risked huge deficits, runaway inflation and
unconscionable gaps in the safety net for the less fortunate. Howard
Baker conceded that it was a “riverboat gamble.” 1
Domenici’s Budget Committee was mowing a wide swath through the
Democrats’ social programs as Thanksgiving approached. Although
most of the cuts were actually just reductions in the growth of federal
spending, battle lines were drawn—right, left and center—over billions
in alphabet soup: AFDC, Aid to Families with Dependent Children, the
basic welfare program; CETA, the Comprehensive Employment and Training
Act that subsidized a wide array of entry-level public jobs; UDAG, the
Urban Development Action Grants, and WIC, the nutrition program for
Women, Infants and Children. Revenue Sharing with the states was also
on the chopping block, together with food stamp expenditures. Liberals
said the cold-hearted Republicans even wanted to reclassify ketchup as
a vegetable to save money on subsidized school lunches for poor kids.
Domenici, Gorton and the other Republicans on the committee, with
the exception of Dan Quayle, wanted to move more quickly than the president
to rein in domestic benefit programs. In the bigger picture, however,
they were moderates. Reagan definitely wasn’t buying their plan to raise
taxes to help balance the budget by 1984. Theoretically, slashing spending
and revenues would tame inflation and jump-start the economy.
Reagan was also intent on winning passage of his proposal to boost the
Pentagon’s budget, which would double the deficit, already $45 billion.
Surprisingly, that troubled the president a lot less than Domenici, Gorton
and a number of other Republicans, not to mention conservative Democrats.
“You can tell me don’t worry about deficits,” said Ernest Hollings of
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