To his regret, Rudman's fears about increasing spending while lowering taxes were by no means chimerical; far from reducing the deficit, Reagan's plan doubled it within five years. Rudman was outraged. As the Senator told his colleagues, "After five years under a Republican president and a Republican Senate, we managed to double the national debt. I mean, who's kidding who?" In his memoirs, Rudman blamed both Budget Director David Stockman for "budgetary deception and political cynicism that numbs the mind," and the president himself for "inhabit[ing] his own reality." Something radical had to be done. America was fast becoming the world's leading debtor nation.
In 1985, Rudman came to national prominence when he, Texas Senator Phil Gramm [1942- ], and South Carolina's Ernest "Fritz" Hollings [1922- ] introduced the Gramm"'Rudman"'Hollings Balanced Budget and Emergency Deficit Control Act. Called everything from "the political version of hemlock" to "just about the dumbest piece of legislation I have seen," the measure mandated a balanced budget by 1991. It included a "doomsday device" which mandated automatic across"'the"'board spending cuts if needed to meet deficit-reduction goals. Gramm and Rudman made an effective team: "While Gramm provided much of the oratorical firepower behind the proposal, the more established Rudman gave it an aura of respectability."
Rudman truly believed that the bill's doomsday machinery w ould never have to be used. As he wrote in Combat, "We saw the legislation as a forcing mechanism. We thought the threat of automatic cuts would force Congress and the White House to compromise on a responsible budget." Automatic cuts would be, among other things, a shameful admission of political incompetence. The bill mandated that the Government Accounting Office, a creature of the executive branch of government, act as referee.
Debate over the proposal was intense. At one point a Pentagon official went so far as to charge that Gramm"'Rudman delivered "a message of comfort to the Soviet Union." Rudman was apoplectic: "The Russians ought to be dancing in the street when they see this country spending itself into bankruptcy," he responded. "They can defeat us without firing a shot."
Gramm"'Rudman passed both houses of Congress, and was signed into law by President Reagan on December 18, 1985. Rudman came away from the signing ceremony with the sinking feeling that Reagan was far more enamored of tax cuts than balanced budgets.
On February 7, 1986, a federal court found Gramm"'Rudman unconstitutional. The court held that it violated the separation of powers doctrine by "investing the power to determine how the automatic spending cuts were to be carried out with the comptroller general, who is appointed by the president but who can be fired by Congress." Later that year, the Supreme Court, in a seven-to-two vote, upheld the lower court's decision.
Senators Gramm and Rudman then drafted what was called "Gramm"'Rudman II." In this version, the Government Accounting Office [GAO] would still decide whether automatic cuts were called for, but its recommendations would go to the House and Senate Budget Committees. In turn, these committees would then initiate legislation ordering the President to begin the process of sequestration. The problem with Gramm"'Rudman II was obvious: the automatic cuts were no longer automatic. "Our backup plan returned the hard budget decisions to the same Congress that had failed to make them before."
In summing up the battle over the deficit, Rudman wrote, "Gramm"'Rudman was defeated by politics as usual. The way it was undermined stands today as a textbook example of how politicians trick the American people into thinking they're acting on a problem when in fact they're ducking it."
Prior to becoming involved with the deficit fight, Warren Rudman gave serious consideration to ending his Senate career after one six"'year term. With the passage of Gramm"'Rudman, he decided to run again, easily defeating former one-term Massachusetts Governor Endicott Peabody [1920-1997], whom the Democrats had enlisted at the last minute just to have someone -- anyone -- on the ballot.
In his second term, Rudman became a member of the minority. As ranking Republican of the Select Committee on Secret Military Assistance to Iran and the Nicaraguan Opposition, Rudman co"'chaired -- along with Hawaii's Senator Daniel Inouye -- the Iran"'Contra hearings. These nationally televised hearings investigated the Reagan administration's sale of arms to Iran in exchange for the release of American hostages and its diversion of some of the profits to the Nicaraguan Contras.
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