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Real Time

October 27, 1995 at 12:00 AM EDT


MARGARET WARNER: Welcome, gentlemen. Mr. Foley, for 25 years now, both parties have been talking about eliminating the federal budget deficit. This week, the House Republicans finally came up with a plan to balance the budget. How did they do it?

THOMAS FOLEY: Well, the first question is, have they done it. This bill will not become law. It, in my judgment, shouldn’t become law. The–I think it’s unfair. I think it’s imbalanced, and I think that what we really need is to have an opportunity for the administration and members in both parties of the Congress to craft a bill that can have the full confidence of the country. But you remember that 25 years ago or so, we were told by President Reagan that if we passed a so-called Kemp-Roth tax cut, that the economy of the country would grow with such rapid speed that we would balance the budget in four years. Howard Baker, the distinguished senator, majority leader at the time, said it was a river boat gamble.

MARGARET WARNER: But, excuse me, Mr. Speaker, but how did–the fact is I don’t think any Congress has ever actually taken the painful votes to even come up with a plan to balance the budget. How do you think Speaker Gingrich was able to get his troops to this point?

THOMAS FOLEY: Well, a lot of–I don’t think arm twisting is the right word. There was a lot of effort to bring the majority party in Congress together. There was a lot of deal making. I mean, there’s nothing wrong with that. There had to be adjustments made, and they were made very quickly to get members’ votes, promises for changes in the bill and so on. And, remember, the bill’s going to be vetoed. I hate to come back to that again and again, but it’s a little easier sometimes for somebody to vote for a bill that they don’t think is going to be part of the law that they’ll have to deal with.


ROBERT MICHEL, Former House Minority Leader: Well, I’m very proud of what the Republicans have done in the House because they fulfilled all the terms of their contract, as they laid out to the American people, and of course, the Senate was not involved in that contract, but the House was, and they’ve really come to grips with the real tough issue. Let’s face it. All these people who have been talking about balancing the budget say you’re never going to get it done unless you get to entitlements. And the biggest of the entitlements was in the Social Security, Medicare, Medicaid area. And they’ve taken the bull by the horns, so to speak, and really addressed the issue, and it’s a tough one. I know when we had to deal with it in times past. But they’ve done it, and as Tom indicated, it may not become law as, as is the case. I think it’s quite obvious the President’s taken his position. The Senate is arguing over it tonight, and we’ll have–then we’ll have to have a conference between the two Houses before it gets to the President, but I think what we’ve done is pushed that debate really to the right. And I’m telling you to see the kind of unanimity of support on the Republican side back in the days when I was leader, or President Reagan was a great leader, we had a unanimous vote, went over and got about twenty-seven or eight on Tom’s side, and made reconciliation work in about seven straight tough votes, and it was tough. Now, you know, nobody has any fear of really of President Clinton like they, in a sense, did of Reagan. Reagan had a lot of popularity. They didn’t want to cross him. That’s why we got as many Democrats as we did. But here, everybody was voting just the way they felt they ought to vote to fulfill their commitment.

THOMAS FOLEY: I have to say this. He sees things from a different perspective.


THOMAS FOLEY: On your own side, you’re acting out of principle, for good purpose, with great courage. The other side sees pressure, arm twisting, and unfairness. I don’t want to get into the merits of the budget or the demerits of the budget, but, you know, a budget that, that attacks a program like the Earned Income Tax Credit by reducing that program, a program that Ronald Reagan called the best pro-family, the best anti-poverty, and the best jobs program ever passed by Congress is, it raises a question about the priorities of this budget. But let’s leave the technical questions aside for a minute, and, and just say that in order to have a balanced budget, you have to proceed seven years down the line, or nine with the President’s program. It isn’t done in one year. It isn’t done with the plan, the blueprint, or one vote, and it’s going to require a kind of a consistent effort under circumstances that may change. And I think it’s important–I think it’s important how the burdens are shared.

MARGARET WARNER: Well, let me–

ROBERT MICHEL: But you’ve got to make a start. And even on the Earned Income Tax Credit that Tom just made mention of in the last–

THOMAS FOLEY: Could we just explain that this is a credit to working families.


ROBERT MICHEL: Right. From ’86 to–

MARGARET WARNER: Actually, gentlemen, I’d like to get you both back to how much do you think is this Newt Gingrich’s sort of personality and leadership style? I mean, would you two, could you two have operated the way he does?

ROBERT MICHEL: Well, we’re all victims of our own individual body chemistry. I have a different personality, I guess, and does Newt. Newt’s a strong-willed man. He, he led the troops in that initial charge and conceived of the contract idea. It was a national campaign. He’s got every right then to demand some loyalty; hey, folks, many of you were elected on my coat strings, so to speak, or at least the contract, therefore, this is the time to fish or cut bait.

MARGARET WARNER: He also robbed the committee chairmen or diminished the powers of committee chairmen, didn’t he?

THOMAS FOLEY: This Congress I think just from the outside–we haven’t been up there, so we’re looking a little bit from the outside–but appears to be a more partisan Congress. I mean, if you look at the results of the vote yesterday, there were ten Republicans who voted against it and seven Democrats who voted for it, so it’s pretty much a party line vote. Secondly–

MARGARET WARNER: Much more, excuse me, than you could have counted on when you were Speaker.

THOMAS FOLEY: I think that’s true. Now, there is a tight, in one sense, a tight majority on the Republican side. They have 233 members of Congress, have changed in 16 votes, and they have a problem. Let me say quickly that I think the Contract With America didn’t have very much to do with the election. I think it had a lot to do with mythologizing the, the Contract after the election, and it gave the new Republican leadership a chance to say, hey, the people voted for this, they voted, we have an obligation to do it.

MARGARET WARNER: All right. Let’s look ahead now in the time we have.

THOMAS FOLEY: There are two things have been passed out of the contract, by the way.

MARGARET WARNER: Yes. All right. Now, the House and the Senate, once the Senate passed this version, are going to go into conference. Who’s going to have the upper hand in that, between the House and the Senate?

ROBERT MICHEL: Well, I don’t know, but I think the House has taken a pretty strong position, but you always have to harmonize between the other body and our own members of our own party. I suspect there are going to be some, some rather significant adjustments, and then they’ll–first of all, I think once it’s passed and the President vetoes it, I think Speaker Gingrich and Bob Dole are going to say, well, Mr. President, do you want to call us up, do you want to call us down, and we got to sit down and iron this baby out.

MARGARET WARNER: Do you agree that the real, the real negotiation starts not between the House and Senate, but–

THOMAS FOLEY: That’s right.

MARGARET WARNER: –when the President gets–


MARGARET WARNER: What advice would you give the President right now, Speaker Foley?

THOMAS FOLEY: I don’t think–I think he’s doing the right thing. I think he’s pointing out what he considers the, the failures and inadequacy of this budget. Everybody’s committed to a balanced budget. The President’s committed to it, we’re talking about a difference between a nine year program and a seven year program, isn’t the end of the world. There ought to be a lot of ways to work out those differences. The President’s committed to welfare reform. There is going to be, I think, effective compromise on that, and there obviously has to be continued concern about spending restraint, and I think the administration and the Congress are going to be a part of that. But let me just say again that the programs that work well over time are the ones that have strong bipartisan undergirding. The Social Security changes of 1983 have worked pretty well, have been acceptable, and been accepted, because it had strong bipartisan connections. If we have this confrontational approach, I think it’s going to create deep divisions not only in the Congress but in the country.

MARGARET WARNER: What about that point, Mr. Michel?

ROBERT MICHEL: Well, I think there’s no way of getting around the fact that there’s real marked division of, of feelings and a change of direction after some 40 years. This is no small thing. It’s a big thing.

MARGARET WARNER: But it is–is the Speaker right when he says that by going ahead and basically having an all-Republican vote, that later, when you have public opinion perhaps turn against something that that makes it more precarious?

ROBERT MICHEL: Well, there’s no question about that, but we’re–this is just one step in the several that are going to have to be taken which are very significant, and–but I do think in one sense the Congress has a little bit of a whip in, in that, you know, the administration can’t spend one dime unless it’s first authorized and appropriated by the Congress. It does give the Congress–we witnessed that when we a Republican President, Democrat-controlled Congress. And now the tables are turned, and so the President talked about some kind of tax credit for families. One time he talked about 10 years to balance the budget. There was something–some speech, and there may be seven, so you get the sense of feeling like he’s–you know, he can walk with some more.

THOMAS FOLEY: It’s what the Democratic alternative–it eliminated the tax reductions until the budget is balanced.

MARGARET WARNER: Do you both agree, though, that ultimately we will–

THOMAS FOLEY: It then was able to restore some of the funds for Medicare.

MARGARET WARNER: But do you both agree that ultimately we’re going to see a seven-year plan that follows very closely the Republican outlines?

THOMAS FOLEY: I’m not sure we’re going to see a seven-year plan. We’re going to see something close to it, and I think that there will have to be some compromises, and I certainly hope that it’s not an effort to use the increase in the debt ceiling as a kind of ransom to get things passed, because that’s extremely dangerous. The debt ceiling does not just allow some financing of the debt; it permits us to pay our obligations, and it avoids increases in interest rates that would be very quick to occur in the markets if we don’t do it.

ROBERT MICHEL: But then when you–you got to use whatever leverage you can, you know, and right up to the last minute, but there will be some give and take in the final analysis.

MARGARET WARNER: Well, thanks, gentlemen, we’ll have to leave it there. Thanks very much.