Hillary and Ira Magaziner badly wanted health care in the budget, the congressional leaders were open to it, and Dick Gephardt had urged Hillary to do it, because he was sure the Republican senators would try to filibuster health care if it were proposed by itself. George Mitchell was sympathetic for another reason: If health-care reform were introduced as a separate bill, it would be referred to the Senate Finance Committee, whose chairman, Senator Pat Moynihan of New York, was, to put it mildly, skeptical that we could come up with a workable health-care plan so quickly. Moynihan recommended that we first do welfare reform, and spend the next two years developing a health-care proposal. The economic team was adamantly opposed to including health care in the budget, and they had good reasons, too. Ira Magaziner and many health-care economists believed, correctly as it turned out, that greater competition in the health-care marketplace, which our plan would promote, would produce significant savings without price controls. But the Congressional Budget Office would not give credit for these savings in any budget we presented. Thus, to provide universal coverage, we had either to include a provision for backup price controls in the plan, raise taxes and cut other spending even further, or reduce the deficit target, which might adversely affect our strategy to lower interest rates. I decided to delay the decision until after I put the details of the economic plan before the people and the Congress. Not long afterward, the decision was made for me. On March 11, Senator Robert Byrd, the senior Senate Democrat and ultimate authority on the body’s rules, told us he would not make an exception for health care to the “Byrd rule,” which prohibited the inclusion of nongeneric items in the budget-reconciliation bill. We had enlisted everyone we could think of to make the case to Byrd, but he was adamant that health-care reform could not be construed as part of the basic budget process. Now, if the Republicans could sustain a filibuster, our health-care plan would be dead on arrival. In the second week of February, we decided to kick the health-care can down the road and complete the rest of the economic plan. I had become deeply immersed in the details of budgeting, determined to understand the human impact of our decisions. Most of the team wanted to cut farm supports and other rural programs, which they thought were unjustifiable. Alice Rivlin pushed hard for the cuts, suggesting I could then say I had ended welfare for farmers “as we know it.” It was a takeoff on one of my best campaign lines, a pledge to “end welfare as we know it.” I reminded my mostly urban budgeteers that farmers were good people who had chosen hard work in an uncertain environment, and though we had to make some cuts in their programs, “we don’t have to enjoy it.” Since we couldn’t restructure the whole farm program, reduce the subsidies in other nations’ budgets, or eliminate all the foreign barriers to our food exports, we ended up reducing the existing farm benefits modestly. But I didn’t enjoy it. Another thing we had to consider in proposing cuts, of course, was whether they had a chance to pass. For example, someone said we could save a lot of money by eliminating all the so-called highwaydemonstration projects, which were specific spending items members of Congress obtained for their districts or states. When the suggestion came up, my new congressional liaison, Howard Paster, shook his head in disbelief. Paster had worked in both the House and Senate and for both Democratic and Republican lobbying firms. A New Yorker with a brusque, candid manner, Howard snapped, “How many votes does the bond market have?” Of course, he knew we had to convince the bond market that our deficit-reduction plan was credible, but he wanted us to remember that it first had to pass, and inflicting personal pain on members of Congress was unlikely to prove a successful strategy. Some of the proposals we considered were so absurd they were comical. When someone suggested we impose fees for Coast Guard services, I asked how they would work. It was explained that the Coast Guard was quite often called upon to bring in boats that were in distress, often due to the negligence of the operators. I laughed and said, “So when we pull up alongside, or throw down a rope from a helicopter, before we do the rescue, we’re going to ask, ‘Visa? MasterCard?’ ” We let that one go, but eventually we did come up with more than 150 budget cuts.
