Notes on the Revolution XVIII
Jude Wanniski
August 25, 1995


TRAINWRECK: Michigan Gov. John Engler, who will soon head the National Governors' Association, has quietly joined the effort of those Republicans on Capitol Hill trying to sidestep a budget "trainwreck" later this year. Engler agrees the GOP should forget about tying the government up over the debt ceiling, which would cause all services to halt sometime in November unless the President agrees to do Republican bidding. He thinks the GOP would be blamed for the real disruptions that would occur if it used the artificial debt-limit mechanism, which would be inappropriate for the majority party. Instead, the alternate strategy would have Congress hike the debt ceiling as soon as it returns after Labor Day and then confront the budgetary issues on the appropriation bills. If the President vetoes one or more of these because they do not call for enough spending, the programs effected would suspend on October 1. Congress could win this confrontation because it can extend the functions of government through continuing resolutions at low levels of spending. The public would side with Congress, especially if it offered modest concessions to the President on individual outlays. In order to insure the White House accepts the GOP tax cuts and Medicaid reductions, the GOP would hold out certain appropriation bills until after the President signs onto a reconciliation bill, after it has also been duly compromised. This gives the GOP leverage on specific spending packages the White House really needs to satisfy its constituents. The strategy seems so reasonable, it looks foolproof. With Engler behind it, the GOP leadership must take it seriously.

DOLE: The dead heat between Bob Dole and Phil Gramm in the Iowa straw poll last Sunday in Ames is being interpreted by the political wizards as a Dole stumble and a narrow Gramm escape from the jaws of total collapse. The figure seems high, but one source tells me Gramm may have spent as much as $1 million to rig the poll, betting his chips on one roll of the dice. Gramm advisor Charlie Black is getting credit for this high-risk enterprise. On the surface it seems implausible that a stacked election could have any meaning, but it plays off the hard reality that there is no hard reality in Dole's voter appeal. This may be the beginning of the end for Dole's front-running candidacy, which I foresaw in early March. It had then become obvious that Dole, a political weathervane by training, could not stand still as a guidepost, which is what the electorate prefers in its presidential candidates. An important Republican elected official tells me that he would not be surprised to see Dole "chuck it all" before the campaign plays out The GOP political grapevine practically sounds like a death watch at the Majority Leader's door. The Wall Street Journal insists he perform various legislative feats to regain his momentum, but that would merely reaffirm his skills as a legislative weathervane, which we all stipulate. Dole's best chance for the nomination now rests on the inability of the rest of the field to produce an acceptable guidepost. (If all other candidates point south and the voters want to go north, the voters will choose the weathervane.) The Iowa hijinks do not do much for Phil Gramm either, except to reaffirm his skill as a pitbull pointing south, which we also stipulate.

FOREIGN AFFAIRS: The New York Times Magazine last week splashed oodles of praise over President Clinton's National Security Advisor, Anthony Lake, who is now traipsing around the Balkans, getting in the way of the locals who are trying to cut a deal. Meanwhile, it is now universally agreed that Saddam Hussein is not about to invade Kuwait or Saudi Arabia. Even Defense Secretary William Perry says not. It was all a silly mistake to think so. So why is the United States of America sending reinforcements to its Gulf legions? Nobody in Washington can find out. The President is playing golf and his National Security Advisor is in Belgrade, reading his press clippings. Meanwhile, the Times yesterday revealed the truth about why we are continuing the economic embargo of Iraq: Saudi Arabia does not want Iraq to sell its oil into a depressed market, as it will drive down the world price. No kidding. Our troops are there to make sure not a drop of oil leaks out We will presumably keep this up until someone calculates that the Saudis have recovered their contribution to the Gulf War.