The Eternal Antagonist

Phil Gramm has always been swimming upstream, but now it’s on the Potomac

TThe day had taken its toll on Phil Gramm. At 5 a.m., David Stockman, the Reagan admin-istration’s budgetary Dr. Strangelove, had awakened his ideological soul mate to say that The Deal had been put together. But Stockman’s optimism was premature. By 10 o’clock that April morning, the budget package that Stockman had stayed up most of the night constructing began unraveling.

Republicans on the House Budget Committee balked. Conservative Democrats blanched. By noon, the situation looked so bleak that Stockman traveled the mile and a half from his office to the Capitol to meet with fellow House Republicans in one last attempt to win their support. Gramm, meanwhile, met with the wavering conservative Democrats who were leaning against his near $36 billion in budget cuts and for the Democratic leadership’s much smaller bill, which they thought went far enough in cutting federal spending.

After most of the Democrats had offered their two cents worth in noncommittal terms, Gramm added his view that the leadership bill failed to cut the mustard with him and that he didn’t believe it would be acceptable to President Reagan. “I’m going to offer a substitute if I’m the only person in Congress who votes for it,” Gramm stubbornly told his Democratic colleagues.

By late that afternoon, Stockman still had not convinced the Republicans to go along with Gramm’s proposal, principally developed by the budget director and Gramm. The Republicans, by lot a stiff, traditional group, didn’t trust Gramm and resented the fact that Stockman had bypassed the minority party leadership in the House in hammering out the budget. When Gramm received a call from House Minority Leader Bob Michel of Illinois a few minutes after 4 o’clock telling him that the deal could not be worked out, he reluctantly called Stockman to convey the news. The two chatted briefly, concluding that the reduced spending package was a good idea that hadn’t worked out. At that time, being back on the economics faculty at Texas A&M looked awfully appealing to Gramm.

But Gramm returned to the markup session of the budget committee, to which he had been appointed with House Majority Leader Jim Wright’s assistance three months earlier. (Wright, who was angered by Gramm’s efforts opposing the Democratic leadership, once said that if Gramm had been present on Mount Sinai when the Ten Commandments were delivered, he would have offered a substitute list of his own.) Still determined to salvage something for his intense labor during the past weeks, he ran a feeler to Vice President George Bush through Republican Rep. Thomas Loeffler of Hunt.

Within an hour, he received word back from Rep. Jack Kemp of New York. Kemp told Gramm that Bush had just called Delbert Latta, the ranking Republican on the budget committee, in an attempt to soothe Latta’s irritation at not being consulted by Stockman. Latta was now willing to talk.

So he met Gramm and the pair shuffled a few budget items. Gramm then offered his substitute, which ultimately became known as Gramm-Latta I. It was defeated 17 to 13, with its sponsor the only Democrat voting for it. But with the vote, Gramm realized that victory was attainable. “I knew at that point that we had an excellent opportunity to win,” he would say later, “because we had something that had not been done since I’d been here. And that is – we had put together a bipartisan effort.”



SINCE HIS DAYS in the Fifties as a sometimes rebellious youth growing up in the suburban military community of Fort Benning, Ga., Phil Gramm enjoyed letting others know that he got what he wanted and that he was in charge.

When he was about 9 years old, he was the leader of an army of a half dozen neighborhood boys. One time the youngest kid in the army complained to Gramm’s mother Florence that as a sergeant he was the only one to have to climb trees and look for enemies. The officers did not have to do this, the young boy moaned. “Mother asked Phil to do something about it,” recalls Gramm’s half brother, Don White. “So he promoted the kid to second lieutenant and made himself a major general.”

Many years later, Gramm was so impressed by the writings of a young woman economist named Wendy Lee that he went to New York City with other Texas A&M faculty members primarily to meet her. During her job interview, he turned in a aside to the department chairman and whispered: “You hire her, I’ll marry her.” Nine months later Wendy Lee began the fall semester, 1970, teaching at Texas A&M. The two were married November 2, and celebrated their 11th anniversary last month.

Much of Gramm’s character was molded by the military environment in which he grew up and the fact that his mother reared him and his two half-brothers. A hard-working woman, Florence Gramm was the driving influence in the family after Gramm’s father, who returned from World War II a disabled veteran, died when Gramm was 15 years old. “She wanted us to go out and strive for things. Education was a big thing,” recalls White, who is three years older than Phil. He is now an Army officer.

While Gramm showed no interest in politics as a child, he exhibited a pro-military, patriotic spirit that he would carry into adulthood. One of his hobbies was raising pigeons and a dog. He was so saddened when any of them died that he buried them with military funerals. Young Gramm would conduct prayer service and watch while his two half brothers fired BB guns into the air.

Because he attended Sunday school regularly and sang in the choir, at one time his mother thought he might be an Episcopalian minister. But as a youngster, Gramm failed to follow his mother’s advice more often than he heeded it. He did so poorly in his studies that he flunked the third, seventh and ninth grades, only to be allowed to make up the latter two by going to summer school. Gramm showed such a mischievous, if not rebellious, attitude that at the age of 15, after his father had died, he was sent to Georgia Military Academy, a boarding school. His mother’s hope was that the school experience would straighten him out.

She decided to take drastic action when, returning home from work late one night, she found the family’s old Plymouth abandoned along the side of the road. Young Phil, who was not old enough for a driver’s license, had taken the car for a joy ride with a few buddies earlier that evening. He left the Plymouth on the highway after it ran out of gas. “I thought it was time he needed a little discipline that 1 just couldn’t give him so I sent him to Georgia Military Academy,” recalls Mrs. Gramm, 68, who now lives in Alabama.

In his own words, Gramm was “pretty much a loser” when he went to boarding school. But his mother’s decision would change his life.

“My middle brother [Don White] called me and said, ’Phil, this is the last chance you’re ever going to get in your life’,” Gramm recalls in a drawl that blends his Texas and Georgia past. “For some reason, I believed him. So I went off to GM A and that really was the turning point for me. My brother’s suggestion was that 1 go to my first class, watch everybody walk into the room and say to myself, ’I am the smartest person in this room and before the end of the semester everybody here’s going to know it.’ Now you gotta remember here’s a guy who failed the third, seventh and ninth grades, who is basically a screw-off, but I did it. I went into GMA and we had to take a test at the end of two weeks in math and if you failed you had to go back to the ninth grade . . . When it came to the Saturday to take the test, I got sick and went to the infirmary. I came back and they set it for the next Saturday. And that gave me another week and I passed.”

The attitude that he was the smartest person in that room has carried with Gramm through everything he has done in his life. He graduated GMA with honors, but more importantly left with an attitude that he could not be beaten. Recalls Gramm: “1 basically left convinced that if you’re willing to pay the price you can beat anybody at anything.”



BY THE TIME Phil Gramm reached Congress in January 1979, he had earned a reputation as a bonafide scholar of economics, despite having earned his bachelor’s and doctorate degree at the University of Georgia, a school noted more for football than academic prowess. By 1972, at the age of 30, he had become a full professor at Texas A&M, another football reputation school.

But, dating to his undergraduate days, when he switched from a physics to an economics curriculum, Phil Gramm has loved the free enterprise system. For example, his definition of a conservative: “The conservative believes in the primacy of the individual and finds in history compelling evidence that economic and social progress as well as happiness and fulfillment are maximized by a system that promotes individual liberty and responsibility. The only binding constraint that limits the future of mankind is unbridled government. Resources are inexhaustible when human imagination is combined with freedom.”

Since Phil Gramm announced for the House, the free enterprise system has reciprocated. Gramm led all freshmen in the 1978 election in receiving the most campaign contributions from special interests. He collected $119,387 from groups that are primarily business and profession oriented, according to Common Cause, the self-styled citizens’ lobby.

That total included $30,000 from groups affiliated with the American Medical Association, and Gramm later worked to kill hospital-cost-containment legislation backed by former President Jimmy Carter. The Carter administration estimated that the bill, which was defeated by the House in 1979, would have saved Americans more than $40 billion over five years.

Interestingly, while Gramm has oeen one of the congressional leaders in accepting business’s special-interest money, he is vocal in arguing that big government favors the wealthy over the common man. “The strong, rich, powerful are more powerful in Congress than they are in the marketplace,” he maintains. “Government helps the powerful and the real danger to freedom is that the powerful use government to do what they cannot do through the marketplace because of competition. In fact, historically, government has intervened in the marketplace to help the rich and the powerful to prevent competition.”

Though he had shown no interest in politics throughout his undergraduate and graduate days, Gramm surprised a fellow faculty member, Dr. James C. Miller III, in 1973 by confiding that he had congressional ambitions. “As soon as Congressman [Olin] Teague retires, I’m going to run for Congress,” Miller, now chairman of the Federal Trade Commission, recalls Gramm saying. “I said to Phil, ’Texans are a very proud people. How could you shake the carpetbagger image?’ “

“Very simple answer, Jimmy,” Gramm responded. “Two Georgians died in the Alamo. They bought my birthright.”

But Teague waited until 1978 to retire. In the interim, a restless Gramm ran an ineffective campaign in the Democratic primary against Sen. Lloyd Bentsen in 1976. When the 6th Congressional District seat opened two years later, Gramm joined four Democrats who sought to be Teague’s successor. He narrowly made the runoff by 121 votes and then won the Democratic nomination by 2,500 votes, before beating Republican Wes Mowery almost 2 to 1 in the general election.

As a freshman member of Congress, Gramm didn’t waste any time establishing himself as an influential voice on energy and economics and as a natural advocate of free enterprise. He worried more about what he would do on the energy-legislation-writing House Interstate and Foreign Commerce Committee than about making a splash on the House floor. He arrived realizing that many other conservatives with strong convictions, such as Rep. Jim Collins, R-Dallas, had little influence on fellow lawmakers and the legislative process itself.

“My goal early on, independent of what I wanted to see happen to the country and what I wanted to achieve once 1 got some influence, was to prove that a person with strong convictions could have influence . . . I didn’t want to be telling my grandchildren, ’Well, the country went to hell, but if you’ll look at my voting record you’ll see I voted against all of it.’ I’d rather be able to tell my grandchildren that in a very critical time in our history I went to Washington and played a small part in changing the country,” Gramm says.

In his first few months as a congressman, Gramm also befriended an obscure Republican from Michigan, David Stockman, who was five years Gramm’s junior, and the two became working comrades in the war to cut government spending. A former anti-war liberal, Stockman had established himself as a hard-working zealot on budget issues. Together, they patched together a loose coalition of 60 Republicans and conservative Democrats in 1979 who formed the Coalition for Fiscal Responsibility, backers of the original Gramm-Stockman amendment to cut billions from Jimmy Carter’s budget. The effort failed. But the two found they enjoyed the intellectual challenge of working together and bouncing ideas off one another. As one attempt to cut government spending after another failed, the bond between the two grew stronger.

By the time Gramm began his second term in January of this year, his persistence in trimming the federal budget had become something of a nuisance for the House leadership. So when he vigorously sought a seat on the House Budget Committee, his more moderate colleagues were noticeably wary. But Majority Leader Wright, the heir apparent to House Speaker Thomas O’Neill of Massachusetts, went to bat for his fellow Texan and argued convincingly that while Gramm was a maverick, he could be counted on in a crunch.

“Some of us thought it would be better to have him [Gramm] on the inside of the tent peeing out instead of on the outside of the tent peeing in, but we ended up with him on the inside of the tent peeing in,” remembers Lufkin Rep. Charles Wilson, paraphrasing a line of the late President Lyndon Johnson. Wilson is a member of the Democratic Steering and Policy Committee, the panel that recommends committee assignments.

Subsequently, Wright has come to privately detest Gramm for “consistently conniving” with Republicans, insiders say. He believed he had secured a promise from Gramm to “close ranks and be a team player” once the budget bill was approved by the Democratic majority. Gramm holds to a different view. He says that he has always maintained that his first allegiance is to his constituents, and that translates into support for Reagan’s budget and tax packages.

What Wright and other House leaders failed to recognize is that on a list of Gramm’s allegiances, his commitment both to balance the budget and to his old friend Stockman far overshadowed any party loyalty. Key House Democrats also overlooked Gramm’s long personal history of rebelling against authority, doing what he thought was right and trying to win at any cost. By the time he had entered the 1981 budget fray, Gramm had rejected the adage attributed to legendary House Speaker Sam Rayburn of Texas that to get along one must go along. To many of his Democratic colleagues from Texas, and other Democrats in the state and the nation, Gramm had not only embarrassed the majority leader from Texas by actively siding with the Republicans, but had placed him in a potentially vulnerable position if, and when, the time came for Wright to seek the speakership.

Nonetheless, some 63 Democrats voted for the first Gramm-Latta substitute in May, the one that massively reduced the 1982 budget and called for a three-year tax cut. A month later, 29 Democrats provided the margin of victory when Gramm-Latta II, a Reagan-backed package of specific spending cuts, was substituted for the one Democratic leaders wanted. In both votes, Gramm cut into Wright’s expected House constituency by attracting seven other Texas Democrats who supported the president.

“Basically, when we got right down to it people [congressmen] were more afraid of the people back home than they were of Jim Wright and Tip O’Neill” Gramm says. “I think the whole history of our delegation has been a history of people doing what they thought was right. There has never been homogeneity in the Texas delegation. I am sorry that I was pitted against Jim Wright. But that wasn’t my choosing. It wasn’t his choosing. My feeling is when you get in a contest you should go to win and I did -no holds barred – and of course he did the same thing.”

While Gramm picked up many of the votes of his Democratic colleagues during the budget fray, he didn’t make many additional friends. One southern Democratic lawmaker, who sided with the Gramm-sponsored administration package, compares Gramm’s attitude with that of Rep. Kent Hance, another second-term Texas Democrat who sponsored the administration’s tax package.

“Obviously Hance was not enjoying what he was doing on the tax bill, but it was something he believed in,” observes the congressman. “But Gramm was on the House floor climbing all over the place and rubbing people’s noses in it. He’s the kind of guy who is a sore loser and a worse winner.”

Whether it was emerging from a White House meeting or through the dozens of interviews he granted during this time, Gramm didn’t hurt his image as a Democratic gadfly by his public behavior. When a group of congressmen met the media after a strategy session, he continually tried to become the center of attention. At one point, the joke around the House side of the Capitol was that the best way to get stomped to death in Washington was to get between Phil Gramm and a television camera.

Even old friends and admirers, like his former colleague Miller, muse that Gramm gets carried away at times. “You see the stories on TV about a guy who gets applause and gets the juices flowing,” he says. “Well, Phil basks in the glory of all the accolades. And he deserves it.”

In one colleague’s view, Gramm also has not mastered the congressional art of being bitter legislative opponents one day and bosom buddies the next. Being liked by his colleagues is admittedly not a priority and he has not gone out of the way to soothe ruffled feathers. Yet he believes that even those who think little of him personally respect him for his hard work and accomplishment.

“Lincoln once said if you have strong views you’ll have strong enemies,” Gramm says. “I’ve got strong views and I’ve got strong enemies to prove it. But no, I don’t in any way feel ostracized. People have strong views about me. They either like me or they don’t. Ones that like me, like me a lot. Ones that don’t, don’t … I didn’t come up here to be loved.”



PHIL GRAMM’S self-imposed congressional timetable runs out in 1984. When he first suggested running for Teague’s seat to his wife Wendy, he asked for six years. Staying in Washington and rising to a committee chairmanship, notwithstanding his position among fellow Democrats, is something that has little appeal to him.

“I don’t have any interest in being up here 30 years and having my pictures upon the committee wall and people saying ’There’s old Phil Gramm – he’s been up here 30 years and never did a damn thing.’ So I’m working now on the things that I came to Washington to do.”

He has turned a deaf ear to some supporters in Texas who would like him to run for the Senate next year, deciding instead to see Reagan’s economic program through from the House side. Despite his unsuccessful 1976 bid and other signs that he would relish the role of senator, he says he has no burning desire to move to the other side of the Capitol.

Assuming that Gramm wins House reelection, the critical event might occur early in 1983. It is likely that fellow Democrats will try to strip him of his seat on the House Budget Committee when the new Congress convenes following next fall’s elections. If the effort is successful, it will force Gramm to reconsider his political direction and career. After Democratic National Committee Chairman Charles Mannatt suggested last summer that Gramm be kicked out of the party for conspiring with the Republican administration, President Reagan on consecutive days twice publicly invited Gramm to follow his lead of years ago and switch parties.

The controversy, played out over the summer, hasn’t caused Gramm any sleepless nights. While some thought he should be embarrassed by Reagan’s invitation, Gramm was predictably flattered. “Whenever I had a girlfriend, I always wanted somebody that other people would like to have had themselves. So the fact that the president has invited me to come over, I don’t see as an indictment.”

But of any party switch, Gramm says, “It’s a decision that I will have relatively little to do with. If the Democratic Party continues the current drift, which means that my participation within the party – within this framework of the nation’s decision-making process -if the party continues to drift to the left so that I become part of the problem rather than part of the solution, then I am going to get out.”

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