How Washington got its act together;Congressional lobbyist comes of age;

              How
Washington Got
Its Act Together
by ANTHONY J. HOPE / Associate Director, Washington Service Center
Throughout the 1980 presidential
campaign, candidate Ronald
Reagan argued against regula­tory
clutter—contending that the only
way to boost American productivity is
to free business from unnecessarily
complex and contradictory tax policy
regulations, and paperwork. Simple,
straightforward, and predictable
regulations, he maintained, is the only
acceptable alternative.
To Washington watchers, this rhetoric
was not new; but there was a differ­ence
this time, one of record. As
governor of California, Ronald Reagan
had demonstrated his willingness to
fight the legislature and the bureaucrats
in the effort to unburden business from
unneeded regulation. He didn't win
that war, but he won many battles.
And he never, ever gave up the fight.
The draft of the Economic Recovery
Tax Act of 1981 (ERTA) was remarkable in
that it was an uncluttered attempt to
stimulate the economy through tax
cuts—the first such attempt since the
Kennedy years. What was equally
remarkable was that ERTA had its
genesis in 1978 as a Republican alterna­tive
to President Carter's ill-fated tax
proposal. A brief look at the history of
the Revenue Act of 1978 and ERTA
will help in understanding how the
Congress arrived at the Tax Equity and
Fiscal Responsibility Act of 1982 and
where we may be going from here.
What Went Wrong in 78
The Democrats were in firm control of
both the House and the Senate in 1978.
But mid-term elections always have
been dangerous for the majority party
since its members traditionally have lost
seats to the underdogs. The Hill
leadership wanted the same type of
legislation they had been getting for
years: sock the rich, help the poor, and
quietly give the rich enough complex
loopholes to keep the large campaign
contributions flowing. But a growing
minority on the Hill was trying a new
approach—a comprehensive tax cut to
stimulate the staggering economy.
What the Carter administration
brought to the Hill was a grab bag of
political issues that most observers
thought would help neither the
Democrats at the polls nor the econ­omy.
It was no secret that President
Carter disdained Washington and didn't
understand the process. His three-martini-
lunch proposal typifies how not
to manage legislative issues. Cutting
back on business's fringe benefits
always has been a popular reelection
rallying cry. What the Carter people
didn't know is that you can talk for
months about the health benefits of
avoiding booze and cholesterol, or the
fiscal benefits of raising revenue by
eliminating deductions, but the reality
is that such measures are rarely put to a
vote. Those running for reelection
refused to be put in the dilemma of
having to vote one way or the other on
this issue. They didn't want to alienate
businessmen, restaurateurs, restaurant
worker's unions, and credit card com­panies.
Nor did they want to be viewed
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