Miyazawa, Rostenkowski and Political Renewal
Jude Wanniski
July 23, 1993


Power corrupts. Four decades of unbroken power corrupted Japan's Liberal Democratic Party, ending yesterday when Prime Minister Miyazawa was forced into a humiliating resignation. The cleansing political renewal of Japan will be as painful as it is necessary. Death and birth are painful events. So too, in the United States, four decades of Democratic leadership of the House of Representatives spawned corruption, which became evident four years ago when House Speaker Jim Wright was forced to resign over revelations involving his protectiveness of the Texas S&Ls. The scandal involving the House bank two years ago gave us a closer look at the depth of corruption that has crept into the system. While the Democrats still control the House by a large majority, the bank scandal sent many of the Old Guard into early retirement. The freshman class is just now beginning to realize that the corruption runs even deeper, perhaps to a depth that will force the electorate to end Democratic control of the House in next year's elections. A strategic shift in the GOP should make it easier for the electorate to give it a House majority.

  Something very big is now throwing its shadow over all of Washington -- perhaps a Tyrannosaurus Rex scandal that can trigger a painful, but necessary political renewal. The suicide of White House lawyer Vince Foster, President Clinton's childhood chum, may have nothing to do with all this. The fact is, there is probably nobody in Washington who had more information flowing into his head on the looming scandals than Vince Foster. It would not be surprising that in order to protect his friend, the President, he would undertake damage control on his own. "Travelgate" was only the smallest part of the corruption he had to manage, the petty, home-grown part imported from Arkansas. The largest part involves the corruption the new team inherited, involving the very integrity of the Democratic Party. The postage-stamps-for-cash racket that has now produced a guilty plea from the former House postmaster is probably the tip of the iceberg. There is almost no chance that House Ways & Means Chairman Dan Rostenkowski can survive. When The New York Times refers to him as a "capo," and now demands his resignation, we can surmise that the level of rumor and speculation that has not yet made it into the public prints is about to break loose. The suicide of Vince Foster almost guarantees that the coverup will fail, for the suicide suggests he could no longer cope with the demands of a coverup. 

House Republicans yesterday tried and failed to have the House post office records made public. Their motion was voted down by Democrats, on the excuse that the U.S. Attorney handling the case has said such revelation would interfere with his investigation. The U.S. Attorney, J. Ramsey Thompson, was of course appointed after the Administration went to extraordinary lengths to get rid of Jay Stephens, the U.S. Attorney who had been developing the case against Robert Rota, the former postmaster. We also recall how the new Administration went to extraordinary lengths to find an Attorney General who would be acceptable to Hillary Rodham Clinton, and it was of course one of the first acts of Janet Reno to dismiss Jay Stephens as U.S. Attorney. Vince Foster, by all accounts, was the White House lawyer closest to Hillary in terms of getting things done -- "the toggle switch" at the White House, as one journalist friend privately advises me. Why was it so urgent that FBI Director William Sessions, another Republican holdover, be forcibly removed from a key post at exactly the moment the House postoffice scandal was blossoming? The way Washington works, almost nobody would have all the answers to all the questions involving serious political scandal -- because almost everyone chooses not to know, retreating from information instead of seeking it out. It would have to come together somewhere in critical mass, that somewhere perhaps being the desk of Vince Foster. We of course have to hope the President is as naive as he sounded yesterday, when he said there's no need to look into the suicide, because nothing will be discovered. 

In the sweep of history, the Republican Party bears indirect responsibility for the corruption which now afflicts the House of Representatives. If the GOP had been effectively competing for congressional seats over the last 40 years, it would have been in and out of control of the House and the corruption could not have taken root. It has only been since I've been talking regularly with Rep. Charles Rangel of Harlem, since he attended our Bermuda conference in March, that this has become clear to me. Rangel makes the point that the Republican Party can never be a national party, which could control not only the presidency but also both houses of Congress, unless it is prepared to represent all the people. For at least 30 years, the GOP has chosen not to represent the interests of black Americans, except insofar as blacks are willing to accept the agenda of the white GOP. This attitude was specifically recommended by Kevin Phillips, after the Goldwater debacle in 1964, but it had been germinating from the earliest days of the Eisenhower Administration: A Southern Strategy. That is, the GOP would concede the black vote to the Democrats, and campaign for disaffected white Dixiecrats. In no national campaign ever since has the GOP explicitly sought the votes of black Americans. The GOP has thereby conceded the House to Democratic control.

Rangel, a Democrat who regularly gets the GOP endorsement, openly acknowledges that he would be delighted if Republicans would now decide to be a national party and would thereby break off, say, 30 percent of the black vote in next year's congressional elections. He tells audiences: "In the banquet of the Democratic Party, black Americans get to sit next to the kitchen. In the banquet of the Republican Party, we get to sit inside the kitchen." Only when the GOP offers better seats, up front, will the Democratic Party have to make room up front, he says. Jack Kemp was a lonely voice at HUD, making this argument in the Bush years. Now, Senate Minority Leader Bob Dole has become the first establishment Republican in generations to reject the Southern Strategy, urging the GOP to do exactly as Rangel suggests. By embracing the idea of a bipartisan alternative to Clinton's budget, built around the initiative of Rangel and GOP Senator Malcolm Wallop, Dole gave more than lip service to this idea. If the President's budget fails, as I believe it will, Dole announced on the "Larry King Live" show last night that he is prepared to sit down the next day and work out a bipartisan budget with the President. Dole went no further, but you can be sure it would be built around Rangel-Wallop and it would be welcomed by the American people as well as the financial markets. Rangel would be the first black in American history to have been a principal architect of the national economy's basic blueprint. A long way from the kitchen. Ironically, in the awareness that Dan Rostenkowski will soon be gone, Roll Call, the Capitol Hill newspaper, yesterday said Rangel will be his likely successor. Senator Wallop, who is chairman of the conservative Senate Republican Steering Committee, yesterday invited Rangel to lunch with the committee. Accepting, Rangel invited Wallop to address the Black Caucus. 

The President is still putting on his best face, as if his budget must be enacted because there is no viable alternative. He's now massaging Fed Chairman Alan Greenspan's Tuesday testimony before House Banking into a desperate appeal for votes. Poor Greenspan. No matter how hard he tries, the press corps ignores the marvelous arguments he makes and paraphrases his words to leave the impression he backs the Clinton budget as it is now emerging. Yesterday, he did drive a stake through the heart of monetarism, as The Times more or less reported this morning. And in answer to a question from Sen. Bob Bennett of Utah about the retroactive indexation of capital gains, Greenspan practically drooled over the positive contributions it would make to the economy and federal revenues. But not a word was reported. The bond market has wilted with the impression that Greenspan has wilted.

Still, Senate Banking Chairman Donald Riegle put another long nail in the coffin of the Clinton budget when he acknowledged, in his prepared opening statement, that the budget would be "contractionary." He said the Fed would thus have to "lift" the economy with easier money. Greenspan in February lectured Riegle on this point, that the Fed could not offset a contractionary budget with monetary ease because the government's creditors would simply "dump bonds." On "Crossfire" last night, Rep. John Kasich [R-Ohio], cited Riegle's statement as clear evidence from a key Democrat that the budget will sink the economy. This morning, an editorial in The Detroit News, "Riegle vs. the Clinton Budget," reminds the Michigan Senator that "not even a Federal Reserve chairman can make the sun come up in the west."

If, as we expect, a monumental scandal is about to stomp out of Washington's Jurassic Park, it's nice to think the messy cover-up details never got to the President. It's shameful, though, his friends are not telling him the suicidal truth about his budget.