Righter Than Newt

Gramm's hair does not shine, and his Georgia accent is as thick as gumbo. He is neither cheerful nor humble. He makes fewer political compromises than almost anyone else in public life. He wants to abolish affirmative action, write a balanced-budget amendment to the federal Constitution, slash taxes, and eliminate roughly a third of the domestic budget, with the biggest cuts coming from programs intended for low-income people. And he is utterly convinced that what he wants, America wants. In sum, Gramm is inviting Republicans to wager the 1996 presidential election on a breathtaking gamble: that the voters are at last ready to repudiate liberalism completely.

Gramm's invitation is of more than merely speculative interest. He is an all-but-declared candidate for the Republican nomination (formal announcement date: February 24). With some $5 million in the bank already, and with the names of 88,000 proven donors in his computers, he is the best-organized, best-funded of all the Republican aspirants. And because 60 percent of all Republican delegates will be chosen in the six weeks after New Hampshire's February primary, the candidate who is best prepared in 1995 has to be considered the front-runner for 1996.

If Phil Gramm is indeed the Republican candidate (and assuming that Bill Clinton retains the Democratic nomination), then the 1996 election will present the voters with a choice between two men starkly different and yet strangely similar--two equal and opposite halves of their generation's experience. Gramm and Clinton are only four years apart in age. Both come from poor southern families, and both owe their success in life to the great postwar expansion of higher education. Both have spent virtually their entire working lives in the public sector, and both are married to high-achieving professional women. Neither has served in the armed forces--which would make 1996 the first race between two nonveterans since 1944. For both men, modern government was an accomplished fact by the time they entered politics: they are inheritors of the Great Society. But whereas Clinton, like many of the people who thought of themselves as rebels during the 1960s, accepts this inheritance with hardly any reservations, Gramm has rebelled against it. Thus there is perhaps one more thing we shall have to revise if Gramm wins his prize, and that is our conventional understanding of who the young people of the 1960s really were and what they really believed, at the time and in the years since.

Clinton may have imbibed the free and easy ways of that decade; Gramm remains as driven and self-controlled as any upwardly mobile poor boy in a Victorian novel. Asked to assess the quality of the Clinton White House staff, Gramm says, "They have a sloppy look about them." Sloppy Gramm is not, and he does not tolerate sloppiness in those around him. His shirts are always meticulously pressed, and the down-home remarks he makes in public have all been carefully weighed in advance. Unlike the President, Gramm is scrupulously punctual. In the course of his ascent President Clinton somehow absorbed some of the relaxed manners of his aristocratic heroes, the Roosevelts and the Kennedys. It's understandable that--as Clinton's pollsters discovered to their horror in 1992--many Americans assumed he was born in comfort. But nobody could ever mistake Gramm for anything but a self-made man.

A Reputation for "Meanness"

Perhaps it is Gramm's thrusting qualities that most strongly mark the difference between his conservatism and that of his antecedents on the Republican right--Ronald Reagan, Barry Goldwater, and Robert Taft. Unlike Taft's, Gramm's speech is demotic. Only recently has Gramm's accent begun to thin; he still often forgets his staff's advice to refer to his "mother," not his "mamma." Unlike Goldwater, Gramm calculates political risks carefully. Shortly before the November 8 congressional election Gramm made a campaign appearance in behalf of a young Republican congressional challenger in Arizona. He listened to the young man deliver a bombastic, foolish speech and afterward took him aside for some unsweetened advice. "There are only two issues when running against an incumbent," he said. "Her record, and I'm not a kook. Forget the feel-good stuff. Say, This is her record; this is what I'm for. If a subject can't elect you to Congress, don't talk about it."

And unlike Reagan, Gramm does his homework. Reagan was a man of feeling; Gramm is a man of intellect. His mind burns at a higher wattage than that of any other senator save Daniel Patrick Moynihan. Reagan never really understood the institutions he had pledged to reform; Gramm has mastered the details of American government better than any other national Republican figure. And again unlike Reagan, Gramm is his own handler. By the time Reagan ran for President in 1980, he had been a star for more than forty-five years. He expected people to take care of him. Gramm does not. He carries his own garment bag and does his own thinking. That cruel joke about Reagan--"It's not that Reagan lacks principles; it's that he doesn't understand the ones he has"--does not apply to Gramm. He has thought his principles through, he recognizes that they will exact substantial human costs, and he has decided that those costs are outweighed by the potential benefits.

It is this ideological rigor, unsoftened by any of Reagan's telegenic benignity, that best accounts for Gramm's reputation for "meanness," an accusation that has been hurled not only by squishy liberals but also by conservatives. Michael Barone, the increasingly right-tilting co-author of the Almanac of American Politics, has written of Gramm, "There is a note of anger to him--a sharp edge of hostility toward those whose view of America is quite different. In this friendly country, angry candidates--Pat Buchanan, Jerry Brown are 1992's examples--do not wear well." In her book Life, Liberty and the Pursuit of Happiness, published last year, Peggy Noonan quotes an acquaintance's put-down: "'[Gramm's] best friends don't like him.'"

In fact, though, Gramm in person is anything but angry or harsh. He may lack the anemic quality we call niceness, but he's a witty and polite man. His friends do seem to like him: he and Senator John McCain, of Arizona--the gallant ex-POW--spent more than a week last October hopping about the Southwest together in a tiny aircraft, shared a case of flu, and by day eight were still swapping jokes with warmth and kindliness. Gramm's marriage has lasted twenty-five years and is, insofar as outsiders can or ought to judge, a close one; his two college-age sons seem to be well-adjusted young men. Turnover on his staff is low; Gramm is not one of those senators who shriek at their employees or ask them to perform demeaning tasks.

On the other hand, those who know the Senate point out that Gramm is not popular with his colleagues there, not even the Republicans among them. He takes few pains to disguise his pride in his ability or his awareness of his colleagues' limitations. He does not twinkle with good humor, as Reagan did. Nor does he bother to disguise his fierce pursuit of the presidency. Presidential candidates used to feign reluctance to take the job. When Franklin Delano Roosevelt flew to the 1932 Democratic Convention, in Chicago, to accept his party's nomination in person, many were startled. Until then nominees had been expected to wait at home for a delegation to arrive on their doorstep and plead with them to heed their country's call. Even today we retain vague feelings that the job should seek the man. But for more than a year Gramm has told anyone who asks--and many who have not asked--that he intends to run for President in 1996. His directness can shock more circumspect souls. Shortly after the 1994 election, according to one account I have heard, a prominent Republican who has been raising money for Jack Kemp for nearly a decade paid a call on Gramm in the company of one of Kemp's top aides to congratulate Gramm on his success as chairman of the party's senatorial campaign. After half a minute or so of pleasantries, Gramm fixed his eyes on his visitor and, looking past the Kemp aide's reddening face, bluntly got down to business: "You know and I know that Jack's nowhere in this race. There are only three candidates worth mentioning: Lamar Alexander, Bob Dole, and me. You've got to back me."

Still, ambitious politicians are not unknown in American life. The presidency didn't fall into Bill Clinton's lap either. And if Gramm lacks Reagan's ability to project good cheer through a television camera, so does Bob Dole. Neither ambition nor the whims of the mass media sufficiently explain Gramm's unflattering public image. No, if Gramm is thought to be uniquely mean, that is owing to something more substantial: his uniquely uncompromising politics.

Reaganism in Three Dimensions

Liberalism today plays much the same role in social life that Christianity played in late Victorian Britain: increasing numbers of people have come to suspect that it is not valid, even as they find themselves utterly unable to imagine any alternative source of truth. With the Sea of Faith withdrawn, Matthew Arnold groaned, this world "Hath really neither joy, nor love, nor light, / Nor certitude, nor peace, nor help for pain. . . ." But Gramm refuses to cross himself at the liberal chapel. Many conservatives who attended college in the 1960s were swept up enough in those guilt-tortured years to have acquired the need to prove to their liberal friends that they are decent folks despite their repellent ideology: "I'm for cutting spending--except for antipoverty programs." "I'm conservative--but I consider myself a feminist." "I object to quotas--but I want vigorous enforcement of the rest of the civil-rights laws." "I think you're mistaken--but I respect your good intentions."

Gramm concedes nothing. "I've never had a campaign that I didn't have an opponent who was rich, and who had rich parents, telling me about poor people," he says. "I'm not going to be cowed by people who want to accuse me of being anti-poor. I'm not going to be swayed by people who say, 'You have no compassion.' I have great compassion. I think of the unwed mother who is working as a cook in a little restaurant, working ten or eleven hours a day. She is barely making ends meet. It is wrong that people who aren't working are getting more money than she is. I think she ought to get to keep more of what she earns. I don't think it's fair that because she is working, she gets no medical coverage, or has difficulty getting it, and somebody who doesn't work gets the best in the world."

In Gramm's mind, what that woman needs is for government simply to leave her alone. "My view on life is very much colored by who I am, and where I grew up, and how my people succeeded. And by my wife's story. My wife's grandfather came to this country as an indentured laborer to work in the sugarcane fields. Her father was the first Asian-American ever to be an officer of a sugar company. She became chairman of the CFTC [Commodity Futures Trading Commission] under Reagan and Bush, and regulated sugarcane futures. That's America in action. Anybody who's gonna try to tell me America doesn't work--they're wasting their breath. It can't be done. I can't be convinced."

His political philosophy might be summed up as Reaganism in three dimensions, the third being depth. He does not buy the happy message of the supply-siders of the early 1980s: low enough tax rates will pump out enough revenues to obviate any big change in social programs. To be sure, Gramm wants to cut taxes. On the stump he complains, "In 1950 the average American family with two children sent one dollar out of every fifty dollars it earned to Washington, D.C. And they probably thought it was too much. Today that family is sending one dollar in every four dollars to Washington. In twenty years, if there are no new programs, . . . the figure will be one dollar out of every three dollars."

However, he scorns those who "want the benefits of limited government but not the costs." Gramm envisions a radical reconception of the functions of the federal government. He would cheerfully spend more money on defense. "If the lion and the lamb are about to lie down together in the world," he says, "it's very important that the United States of America be the lion" (a motto so pleasing to him that he has had it framed and hung on his office wall). He would build necessary physical infrastructure--although "whether every airport in America needs to be a remake of the Taj Mahal or not is an open question." Beyond that, he says, he would put the federal government on a budget. And the main targets of his budgeting would be means-tested programs: Medicaid, Supplemental Security Income, food stamps, low-income energy assistance, and Aid to Families with Dependent Children. As Gramm puts it, "I'm going to ask those riding in the wagon to get out and help the rest of us pull it."

Now, Gramm is intimately familiar with the federal budget. He knows perfectly well that the bulk of federal spending is lavished on middle- and upper-income taxpayers. And his attack on Big Government would be felt across the board. He claims that when Secretary of Labor Robert Reich attacked federal business subsidies in a speech last November, he offered to sponsor a bill eliminating them. And his plan to reform public and private health insurance would have the effect of quadrupling or quintupling Medicare's present deductible of $600-plus. The idea is complicated, but essentially, health insurance and Medicare for routine expenses would be eliminated. Instead employers would contribute to special tax-advantaged savings accounts--usually known as "medical IRAs." The difference between deposits into those accounts and money actually spent on health care each year would be the saver's to roll over or pay taxes on and keep. Insurance--whether private or Medicare--would not start to pick up health costs until after the first $2,500 or $3,000 a year. Since about 80 percent of Americans spend less than $3,000 a year on health care, medical IRAs would reorient American medicine away from insurance to direct payment by patients. The advantages of patient payment are potentially vast--almost as vast as the likely shock to a middle class that by and large feels content with the health-care that it gets.

On Social Security, too, Gramm's promise that people who have contributed to the system will get their money back--and his omission of any promise of more--clearly implies that Social Security will play a much smaller role for future retirees than it plays now. Still, Gramm is no neoliberal. For all their faults, he regards Social Security and Medicare as "earned benefits," which deserve gentler treatment than means-tested welfare programs. Most of those he'd like to scrap, and use the money saved to double the per-child tax exemption to $5,000 from the present $2,450.

When challenged to justify the apparent unfairness of this discrepancy, he bristles. One set of benefits was paid for, the other wasn't. Isn't that reason enough for the difference? He angrily rejects any imputation of unfairness. "I'm trying to help people who are on welfare. I'm not hurting them. The government hurt them. The government took away from them something more important than this money. They took away their initiative, they took away a substantial measure of their freedom, they took away in many cases their morality. They corroded their morality, their drive, their pride. I want to help them get that back. . . . I want to do it because I love them, because I want them to be Americans. And their children and grandchildren will thank us."

A President Gramm would attempt to enact a comprehensive and radical free-market program, more radical than that of Newt Gingrich's House Republicans. With the stroke of a pen he would repeal the executive orders that enforce affirmative action. Environmental and other rules would be subject to a new regulation requiring Washington to compensate property owners if any federal rule reduced the value of their holdings by more than 25 percent. But the issues on which Gramm's attention is fixed are the cost of government to the ordinary worker and the dangerous allurement of welfare. "Ordinary people" figure large in his speeches. "America is not a great and powerful country because the most brilliant and talented people in the world came to live here. It's ordinary people--people who would have been peasants anywhere else--who were able to do extraordinary things." That is, Gramm insists, his own story--but if there's one thing that Phil Gramm isn't, it's an ordinary person.

The Professor

The future senator was born in Fort Benning, Georgia, in 1942. His mother's family name was Scroggins: Gramm knows little more about her family than that they were Scotch-Irish and that his grandmother's father and grandfather fought for the Confederacy at Shiloh. Gramm's mother had been divorced young, and she had been obliged to work for a time in a cotton mill to support her two sons by that first marriage. Her second husband, Kenneth Gramm, the senator's father, was the son of an immigrant from Germany. He joined the U.S. Army at age fifteen, served along the Mexican border during the First World War, and rose to the rank of sergeant. For many years he taught at the infantry school at Fort Benning, outside Columbus. Just before he was to have been shipped out to Europe, after D-Day, he suffered an incapacitating heart attack and stroke. He lived for the next thirteen years as an invalid. Mrs. Gramm got herself trained as a practical nurse, and earned a living caring for well-to-do patients in their homes. That could have been an embittering experience. It wasn't. His mother "would come home and tell us that basically the difference between them and us is that they worked harder," Gramm says. "We could be like them. My mother would drive by the nicest house in Columbus, Georgia, and she would say, 'You could have a house like that if you worked hard for it.'"

At first the young Gramm was not persuaded. He was an indifferent student. He relishes telling the story of how he failed the third, seventh, and ninth grades. He diffidently suggests that he may have been dyslexic, or that he may have resented his disabled father's too-determined efforts to push him along. Whatever the explanation, his ambition ignited soon after his father's death, and he graduated from high school with honors, in 1961. He was only the second person in his entire clan ever to have completed high school; his half-brother Don White had been the first.

The Army had given the Gramms some insurance money, but it proved insufficient to pay for both boys' college educations. Gramm's half-brother joined the Army; Gramm himself moved to Atlanta, held part-time jobs, studied by correspondence, married his first wife at age nineteen, and took a bachelor's degree in three years at the University of Georgia and a Ph.D. in economics in a little less than three years more. He was appointed to the faculty of Texas A&M, the University of Texas's less prestigious rival, in the fall of 1967. He had made it into the middle class.

That was a time of upheaval in America, but the turmoil did not touch Professor Gramm. He was entranced by economics--"These were powerful ideas that explained the world that I knew"--and saw that he did not know nearly enough about his discipline. "The University of Georgia did not have a very good graduate program. Everybody I was competing with knew more math, more stat, than I did. So I audited all of our Ph.D. programs, and in essence got two Ph.D.s." To this day Gramm despairs over gaps in his knowledge. "The easiest way for me to get melancholy is to walk over to the Library of Congress and look down those endless stacks of books, and realize there's information in there I need to know and am going to die not knowing."

He claims to have stayed aloof from politics in those early years, except for voting for Goldwater in 1964. As he tells it, the racial agonies of the desegregating South left scarcely a mark on him. Asked about it now, he begins by asserting that segregation was "obviously wrong." But although he attended segregated schools throughout his childhood, and although the University of Georgia "was integrated the year before I came or the year after I came" (it was the year before: January of 1961), the civil-rights struggle seems not to have galvanized him.

Neither did Vietnam. His half-brother fought in Vietnam, and so did many of Gramm's students at Texas A&M; for much of that time he himself, as a graduate student and as a married man, was exempt from service. His support for America's aims in Vietnam never wavered. "To me, Vietnam was about what Korea was about: it was about containing communism." He had only one concern about the war: "that we were losing it."

Gramm worshipped three times a week as an Episcopal acolyte. After his first marriage ended, he filled his time coaching Boys Club football, and bought a few rental properties to supplement his income. Those were his 1960s. The Big Chill notwithstanding, they were also the sixties of millions or tens of millions of other striving, ambitious young people.

Gramm remarried in 1970. Like Hillary Rodham Clinton, the second Mrs. Gramm came from a social position loftier than her husband's. Wendy Lee attended Wellesley and went on to complete a Ph.D. in economics at Northwestern University. It wasn't Lee's eyes or ankles that initially stirred Gramm's interest in her: it was her dissertation. He liked it so much that he invited himself to New York to sit in on her interview for a job at Texas A&M. Afterward he walked her to the door, helped her on with her coat, and said, "As a senior member of the faculty, I would be especially interested in you coming to Texas A&M." This overture, he ruefully reminisces, was not immediately successful. "She looks at me and [I can see her think] 'Yuck.' So I went back in and said to the people at the interview table, 'We're going to convince her to come to Texas A&M, and I'm going to marry her.' So anyway, she did, and I did."

As Wendy Lee Gramm's background parallels Hillary Rodham Clinton's, so would her role in her husband's Administration. Mrs. Gramm tells friends that she would downplay politics, that she would set her sights on becoming "the nation's first Rollerblading First Lady." They don't believe her. She is a woman of formidable intelligence (she's probably a better technical economist than her husband) and strong free-market views. Republican marriages formed in the 1940s, 1950s, and early 1960s are often riven by a silent ideological divide: in the tumult of the sixties the wife went left and the husband didn't. This familiar feature of Washington social life is now coming to its natural end as the tumult retreats further and further into the past. Unlike George Bush and Ronald Reagan, Phil Gramm at home hears advice that comes from the ideological right.

Academia did not content the Gramms for long. Spurred by inflation and rising taxes, Phil Gramm decided to run for office. For some time he had been soliciting speaking engagements at eastern Texas chambers of commerce and publishing articles. (It was an op-ed piece in The Wall Street Journal that brought him national attention. The piece pointed out that the world had seemed in the mid-nineteenth century to be exhausting its supplies of its main lighting fuel, whale oil. Prices rose and rose--until some venturesome profit-seeker tried burning petroleum instead.) Emboldened by the applause of his chamber-of-commerce audiences, Gramm decided to challenge then-Senator Lloyd Bentsen in the Texas Democratic primary in 1976. It was a breathtaking act of bravado, a formidable gamble. Bentsen was a rich man, an effective senator, and a skilled campaigner who had dispatched George Bush in 1970. Even as a publicity stunt, running against Bentsen was risky. But the race was no stunt: at the beginning Gramm truly believed he would win. "I'd never lost at anything in my life," he says. He was crushed: he received 28 percent of the vote. He was also broke. He had put $50,000--all the money the Gramms possessed--into the campaign, and every dime of it had been spent. He decided to try again anyway, and in 1978 entered the House of Representatives as a Democrat for a district that stretched from the northern reaches of Houston to the southern suburbs of Fort Worth, and that encompassed the seat of Texas A&M, in College Station.

Changing Parties

Almost immediately Gramm embroiled himself in conflict with the head of the Texas Democratic delegation, Jim Wright, then the House majority leader. "Jim Wright could never understand me. He kept wondering what it was I wanted. He kept asking my Democratic colleagues from Texas, who'd come to Congress the same year I did, what was it I wanted." In Gramm's account, Wright held out the apple of temptation, explaining how conservative Democrats could be excused from certain votes if the leadership didn't need them and how they could remain free to criticize the party at home, and offering him choice committee assignments. Finally, after the Democrats' 1980 debacle, Gramm extracted from Wright the assignment he had coveted from the beginning: the Budget Committee.

Wright, who resigned in disgrace from the speakership in 1989, remembers things a little differently. In a written statement he recalls that Gramm "came to me pleading for my help [to get onto the Budget Committee]. I explained . . . that these . . . were choice plums reserved for colleagues on whom the Democratic caucus could count when the chips were down. [Gramm] promised to be [a] team player. . . . A relic of the old Texas school which values a handshake over a gilt-edged bond, I took [him] at his word."

Whether he forced or begged his way onto the Budget Committee, Gramm quickly dominated it. In his memoirs the former Reagan budget director David Stockman identifies Gramm as one of only three representatives--Jim Jones, of Oklahoma, then the chairman of the Budget Committee, and Leon Panetta, then a Democratic member of the committee, being the other two--who thoroughly understood the budget. Stockman, not an indulgent judge of others' weaknesses, unhesitatingly describes Gramm as "brilliant"; Gramm became his partner and floor leader in the House.

Gramm willingly left the pleasures of tax cutting to others and instead assumed the unpopular chore of producing matching cuts in domestic expenditures. This was another of Gramm's gambles, one certain to win him the undying enmity of the Democratic leadership. He plunged ahead regardless. With Delbert L. Latta, of Ohio, as Republican co-sponsor in the House, Gramm and Stockman outmaneuvered the leadership of the Democratic Party, beat back the alternative budget drafted by Jim Jones, and won the day for the Administration-backed Gramm-Latta budget in May of 1981.

Those were fevered days for conservatives, dramatic days. As the crucial vote neared, Gramm's bloc of conservative southern Democrats, the "Boll Weevils," came under intense pressure from the Democratic leadership to stay with the party. Jim Jones had designed a less draconian plan of his own, and many of the Boll Weevils felt tempted to heed their party leadership. In his memoirs David Stockman tells what happened next. At a meeting in the office of the most important of the Boll Weevils, Mississippi's Sonny Montgomery, "the group's chairman, Charlie Stenholm of Texas, asked the members for their opinion of [the Jim Jones alternative]."

"One by one they said it was a reasonable compromise and that it would allow them to work with the Democratic leadership while at the same time promoting President Reagan's goals.

Gramm waited until everyone had said his piece. . . . It was clear to him, Gramm said, that if William Barrett Travis, commander of the American forces at the Alamo, had asked for a debate instead of drawing the famous line in the sand, then "there never would have been a battle."

This was followed by five minutes of shouting. Jack Hightower of Texas pointedly reminded Gramm that everyone who crossed the line at the Alamo died. There was a murmur of assent at this.

"Yes," said Gramm, "but the ones who didn't cross the line died, too. Only no one remembers their names." "

Gramm-Latta carried the day. Then, after the Senate also passed an Administration-approved budget, Gramm and Stockman crafted Gramm-Latta II, a package of spending cuts that "reconciled" the difference between revenues and spending in the budget, and dashed what remained of the Democratic leadership's hopes of rendering the Reagan Administration's program stillborn.

At first it seemed that Gramm had bought his success in 1981 at the expense of his political career. The Republicans lost twenty-six seats in the 1982 midterm elections, and House Speaker Tip O'Neill and Jim Wright seized the opportunity to take revenge on the Democratic defectors. Gramm was stripped of his Budget Committee seat. He promptly resigned from the Democratic Party and reaffiliated as a Republican. Then, although he was not obliged to, he resigned his seat and asked for a special election. It was a desperate fight, but Gramm's stock quip to his campaign audiences, "I had to choose between Tip O'Neill and y'all, and I decided to stand with y'all," achieved the desired effect: he won his seat back. The following year he ran for the Senate seat left open by the resignation of John Tower, Texas's first post-Reconstruction Republican senator, and won again.

Fate Steps In

In his first year as a senator, a time when tradition calls for deference to the senior members of the institution, Gramm rolled the dice again, and produced the Gramm-Rudman-Hollings deficit-reduction amendment. In what Gramm's co-producer Warren Rudman, of New Hampshire, described as "a bad idea whose time has come," the law set a series of deficit targets and instituted mechanisms for automatic across-the-board reductions in both domestic and defense spending if those targets were not met. For conservatives, who had lost control of the House in 1982 and whose grip on the Senate was tenuous at best in 1985, Gramm-Rudman represented an appalling risk. It conceded the principle that the defense budget should be constrained by budgetary limits rather than by the Pentagon's estimation of Soviet capabilities. Worse still, it took no position at all as to whether the deficit targets would be met by raising taxes or by reducing spending. Gramm cheerfully bet the house anyway, and defends his bet to this day.

"The beauty of the Gramm-Rudman idea was that it put the fat in the fire," he says. "We could then put out the fire either by raising taxes or by cutting spending. So different people could see it producing different results. And since we had nothing like a majority on this issue, it was necessary that it be viewed as a tool, so that people would think they could do various things with the tool. I thought I could do something.

"I didn't see it as a gamble. We were losing on defense, we were losing on taxes. No, it wasn't a gamble. At that point it was our best hope."

And to a degree it worked. Over the next five years spending growth did slow and the deficit did shrink. True, Gramm-Rudman's deficit targets were often met only by chicanery --by anticipating revenues and moving expenses off-budget--but by fiscal year 1989 the deficit had slipped to three percent of gross domestic product and the federal government's share of the economy had inched down to 22.1 percent, roughly where it had stood in 1980.

The later 1980s turned out to be fallow years for Gramm. After the loss of the Senate by the Republicans in 1986, Gramm could no longer enact legislation. His greatest accomplishment in those days was a negative one: he foresaw the danger in partly deregulating the savings-and-loan industry. In 1982 Gramm had voted against the act that freed savings-and-loans to enter nonhousing lines of business. He says, "I was always worried about this sleepy little regulator of housing lending [the Home Loan Bank Board, which oversaw thrifts] . . . suddenly regulating people who were residual earners in the fried-chicken business." As the financial condition of the S&Ls deteriorated and regulators closed in, Gramm introduced legislation to tax S&Ls to beef up the deposit-insurance fund. This prescience alienated him from the rest of the Texas delegation, because Texas was home to more troubled thrifts than any other state. And it tossed him into renewed combat with Jim Wright, the thrifts' main defender in Congress--a fact that may even have helped inspire Gramm's suspicion of the faltering industry.

The pace of events quickened again for Gramm after 1989. But this time the course he took nearly proved disastrous--at least for his reputation with his conservative base: he involved himself in the negotiations that led to President Bush's ill-fated 1990 budget deals. The details are serpentine, but in their wake Gramm-Rudman had vanished and the top rate of income tax had hopped to 31 percent from Ronald Reagan's 28 percent. Gramm now defends his actions in 1990 on grounds of party loyalty and personal affection for George Bush. But two other considerations must have entered his mind as well. At the time, George Bush seemed certain to be re-elected to the presidency in 1992. Bush's support, or at least his benign neutrality, would thus be indispensable to anyone planning a run for the presidency in 1996--especially if that anyone hailed from Bush's home state, and doubly especially considering that there was a sitting Vice President who would have to be knocked aside. Alternatively, if Bush's backing could not be won, Gramm would need an iron grip on the loyalties of Texas--and its big donors--in the run-up to the 1996 cycle. In order to clamp that grip on the state, Gramm has retreated slightly in recent years from his accustomed ultrapure anti-pork-barrel stance. He helped pull the huge supercollider project to Texas and championed the Houston-based manned space station, while also showing new zeal for Texas's agriculture interests, among them the much-ridiculed mohair subsidy. Those prizes also required presidential good will--which helped to pull him into Bush's budgetary thickets. And unlike Newt Gingrich, who broke ranks with Bush, Gramm, once stuck, could not easily walk away. In the end Gramm cast his vote against the budget deal, but quietly.

Washington conservatives may have felt irritated at Gramm in 1990; back home he was more popular than ever. He won re-election that year with 60.2 percent of the vote, a larger margin than any Texas senatorial candidate had garnered since 1958. He demonstrated stunning fund-raising powers, too. A single 1990 event, staged in the Houston Astrodome, raked in well over $2 million. "You can't be more powerful in Washington than you are at home" is a Gramm maxim. Awed, his Senate colleagues named him chairman of the Republicans' overall senatorial fund-raising drive for the 1992 and 1994 election cycles.

Then, as movie serials used to intone, fate stepped in. To the astonishment of everyone--not least fainthearted Democratic hopefuls like Mario Cuomo and Bill Bradley--the Bush Administration disintegrated and the Republicans found themselves out of power. Dan Quayle was suddenly struck from the Republican line of succession, and a new job needed to be filled: leader of the opposition. Gramm grabbed it.

While Dole and even Gingrich took months to decide that they would not negotiate with Clinton on a health-care plan, and while other Republicans, such as Kemp, Dick Cheney, and Lamar Alexander, vanished onto the speaking circuit, Gramm immediately threw himself into implacable confrontation. I think Hillary Clinton and I were the only two people who read the whole bill. She loved it and I hated it," he later said. He didn't just hate its rationing, or the 15 percent payroll tax that, he calculated, would probably be needed by decade's end to finance it. After all, he says, "Congress messes up industries every day. But I believed that if people understood that this bill took away something more important than their money, their job, their health care, if they understood it took away their freedom, that was the little stone with which we could slay Goliath." He assembled a panel of senators and representatives to travel the country campaigning against the plan. As conservative criticism punctured the plan and public support leaked away, other Republicans rushed to take up the position that Gramm had occupied months before. But he had been there first, when the spot had looked dangerous, and he did not let anyone forget it.

The New Republican Heartland

In his biography of John Maynard Keynes, Robert Skidelsky warns against the easy assumption that "biographical subjects are much more frequently products of their backgrounds than of their times." Or places. Probably nowhere else in America but Texas -- and certainly in no other large state -- could a man with such radical views on economics, and such relatively bland views on social issues, rise so high so fast. Nor is Gramm alone. Two of the three most senior Republicans in the House -- the majority leader, Dick Armey, and the majority whip, Tom DeLay -- are also Texans who combine economic radicalism with understated positions on the hot-button issues that excite the Republican faithful elsewhere in the South. A fourth Texan, Bill Archer, chairs the Ways and Means Committee. He has been musing about replacing the income tax with a consumption or value-added tax.

Historically, the Republican Party has taken its tone from one particular state or region at a time: Henry Cabot Lodge's Massachusetts, Robert Taft's Ohio, Ronald Reagan's southern California. Today Gramm's Texas supplies the party with its strongest themes and ideas. Except for Florida, Texas is the most urbanized state in the South: more than 80 percent of the population lives in cities. (In Newt Gingrich's Georgia the figure is a little above 60 percent.) And the Texas Republican Party, since its emergence in the 1970s as a serious political force, has been a metropolitan party, drawing its explosively growing strength -- it elected three times as many officeholders in 1994 as in 1982 -- first from Dallas and environs, a little later from Houston, and only very recently from the rest of the state. The Harris County victory celebration last November 8 filled the exhibition room of a southwest-Houston hotel with expensively tailored young lawyers.

The people who live in and around Texas's cities earn their livings in increasingly sophisticated ways. Although far from wealthy (household income ranks thirty-second in the nation), Texans have managed to diversify their economy beyond oil and agriculture. High-technology companies around Austin and Dallas, and shipping and financial-services companies near Houston and Dallas, employ a rapidly growing population of college graduates, many of them newcomers to the state. Of Texas's 17 million people, 4.3 million were born in the other forty-nine states, and another 1.7 million were born abroad.

In some southern states -- Virginia is the clearest example -- newcomers have leaned to the left of the rest of the population. That hasn't happened in Texas. On the contrary: Louis Dubose, the editor of the liberal Texas Observer newspaper, argues that the heart of fundamentalist Christianity in Texas is not the countryside but the megachurches that line the interstate connecting Dallas and Fort Worth and the beltways around other big cities. The Christian conservatives at the Texas state Republican convention last year, Dubose jokes, weren't wearing farmers' "gimme" caps; they were wearing the plastic pocket-protectors beloved of engineers and computer designers. Just as Islamic fundamentalism wins converts not in the villages but among the uprooted and semi-modernized people of the cities of Algeria and Egypt, so Christian fundamentalism in Texas seems to have won some of its following among the first-generation college graduates who have left small towns in eastern Texas or the Midwest to work for Hewlett-Packard or Electronic Data Systems in Dallas County.

Their religious beliefs do not, however, blind high-tech Christians to the fact that they draw their livelihoods from an integrated world economy. Conservatives throughout the South flirt dangerously with protectionism, Newt Gingrich not least. Gramm never has. He will, though, take trouble to accommodate his constituents' social views. Although wary of school prayer ("It's got to be very strictly limited, and it's got to be voluntary. You can't empower zealots"), he opposes abortion, and in his 1984 campaign for the Senate he made gleeful use of the fact that his opponent, Lloyd Doggett, had received money from a fund-raising event at a gay strip club. Last year he declined to condemn California's Proposition 187, which denies schooling and other benefits to illegal aliens. He artfully weaves religious imagery into his speeches.

There is a religious right in Texas, and it can sometimes score victories. Last summer, for example, an old Goldwaterite named Tom Pauken mobilized discontented prayer enthusiasts and abortion opponents to elect Fred Meyer, a Gramm ally, from the chairmanship of the Texas party and to install Pauken in Meyer's place. But on closer inspection personal antagonisms and resentments provide a much better explanation of what happened in Texas last summer. Meyer is a wealthy Dallas industrialist and a superb fund-raiser, at ease with the big donors who supply one third of the Texas party's resources. (The rest comes from direct mail and telemarketing.) Pauken, a former chairman of the College Republican National Committee and the head of the ACTION agency in the Reagan Administration, hails from the other side of the tracks and -- despite his Roman Catholic background and secular outlook -- adeptly spoke to like-minded outsiders in the Texas party.

The power of people like Pauken and his supporters is, however, necessarily episodic. It costs more than $2 million a year to run the Texas party between elections. And because Texas is so huge and its population is so widespread, campaigning there is more expensive still. Mammon remains a vastly more useful ally than God in Texas politics, and Fred Meyer will be working for Gramm in 1996.

Gramm hopes to persuade Republican primary voters, especially Christian conservatives, that his economic conservatism is cultural conservatism. "If you are talking about values issues," he says, "what is more value-laden than the welfare system? What is more value-related than the tax cuts? Aren't we talking about values when we're talking about stopping the subsidizing of conceiving illegitimate children? Aren't we talking about values when we're talking about cutting spending and doubling the dependent exemption for children?"

Values talk inevitably raises the question of Gramm's own morality. His political conduct has been called into question at least twice. In 1989 the Federal Elections Commission fined his campaign $30,000 for violations relating to his 1984 Senate race. Then there was what some see as a $50,000 personal gift from a Texas homebuilder and savings-and- loan operator, Jerry Stiles. At Gramm's request Stiles, a longtime supporter, flew a crew of carpenters to Maryland to finish a summer house Gramm owns on the Eastern Shore. Gramm paid Stiles for the work, but an investigation later found that Stiles had charged Gramm $50,000 less than the cost of the job. Then, when Stiles's S&L ran into trouble, he asked Gramm for help. There is no evidence that Gramm interceded improperly for Stiles or that Gramm even knew of Stiles's $50,000 loss. When the loss finally came to light, Gramm wrote Stiles a check for $50,000 and laid the matter before the Senate Ethics Committee. The committee ruled that Gramm had owed Stiles nothing, and Stiles refunded Gramm's,money. Stiles seems to have hoped to curry favor with Gramm; five years later, however, no evidence has appeared that the currying worked or that Gramm received anything like an illegal gratuity.

Still, it's a strange story, given that this hyperideological. politician rests much of his case to his fellow Republicans on his organizational acumen. Gramm contends that a run for the presidency will cost more than $44 million in 1996. "That's a lot of money to raise when somebody can give you only a thousand dollars. I think management and organization are things that are greatly undervalued in politics. The question is, who can put together this forty-four-million-dollar corporate entity? Who can set up a structure to manage it? No one running for office has ever had to do what you're going to have to do in this election to win the nomination, and that is you're going to have to raise all this money early, you're going to have to run in fifteen or twenty states at the same time, without being the party nominee, without having every political operative in the party working for you -- which they will after you get the nomination."

An Adventuresome Party

Of all the similarities between Gramm and Clinton, the one that will have the greatest effect on the 1996 campaign is their agreement that one of the most important issues facing the nation is the apparent dwindling of the prospects of the middle-class American family. Both of them keenly remember a time, not so very long ago, when opportunities seemed to abound. Today's world seems somehow tighter, less expansive. Clinton's explanation of what has gone wrong is technical: changes in the world economy, new technologies and ways of work that have raised the value of trained labor relative to unskilled and semi-skilled. Gramm's analysis is much blunter: "We've gotten off track. It's like a football team. We stopped winning because we stopped doing the things that made us winners. We started to reward people who were doing things that did not represent productive behavior. We started to penalize people who did." It's not some global economic climacteric that is ailing America, in Gramm's eyes: American living standards are eroding because of decisions made in America -- because the productive are overtaxed and the unproductive are overprotected.

Fiercely and uncompromisingly, Gramm intends to reverse that distribution of rewards and penalties. Nervous Republicans may hear in his fierceness an ominous warning of a debacle to come -- another 1964. But the country's mood has shifted dramatically since those days. Republicans seeking national office need no longer hew to the center.

Gramm's prediction that the list of serious Republican presidential aspirants will narrow to himself, Bob Dole, and Lamar Alexander looks more accurate by the day. Dan Quayle can appeal to Republican sentiment that he was treated unfairly by the detested liberal media, and to the growing national consensus that his controversial "Murphy Brown" remarks have proved right after all. But he will be campaigning bearing the stigma of defeat and without an institutional base. Richard Nixon pulled off the trick in 1968, but -- to adapt the joke that will haunt Quayle for the rest of his career -- Dan Quayle is no Richard Nixon. Republicans don't like to admit it, but they know that the reason the media image of Quayle as a lightweight has endured is that he is a lightweight. At any rate, enough of them know it to deny Quayle the 1996 nomination.

Ex officio, Pete Wilson ought to rank high on any list of potential nominees. Not only can he tap the fantastic wealth of California, but he has artfully crafted a new ideological position that might be crudely summed up as Go left on abortion (he's pro-choice), right on race (immigration and affirmative action), and up the middle on economics. And yet Wilson bears two daunting handicaps: as governor, he raised taxes to balance his budget -- a sin he has since tried to expiate by calling for a 15 percent tax cut -- and in the 1994 campaign he repeatedly promised to serve out his term as governor.

Among the other prominent governors, William Weld, of Massachusetts, saw his hopes run aground on the rocks of the recession of the early 1990s. To lift the veto that the party's social conservatives would put on him for his support for abortion and gay rights, he would need a breathtaking record of tax and spending cuts. He hasn't got it. Tommy Thompson, of Wisconsin, and John Engler, of Michigan, have dropped no hints that they are considering a run. As for Christine Whitman, of New Jersey, despite her tax-cutting, she elicits enthusiasm only as a vice-presidential prospect.

The year 1996 ought to have been Jack Kemp's year. Kemp is the only other Republican to have offered a program as coherent, as principled, and as intensely felt as Gramm's. Throughout his career he has championed conservatism with a smiling face--which is why he has become so vulnerable to the accusation that his conservatism is out of date. Had he resigned from President Bush's Cabinet over the abandonment of the "no new taxes" pledge, he would have sealed his claim on the 1996 nomination. Instead he is exiting into history as a man who never quite seized his moment.

The collapse of Kemp's candidacy leaves Gramm alone on the Republican right. That might attract other conservatives, including the most powerful of them all, House Speaker Newt Gingrich. But it won't be easy for Gingrich to plunge in. Enacting the Contract With America will occupy him late into 1995. If he spends time campaigning and the contract falters, he will open himself to damaging accusations within the party. A Gingrich presidential campaign could also spark uncomfortable demands that he release the names of the contributors to his political-action committee, GOPAC. Besides, Gingrich has just won the job he spent twenty years working for. He would have to be a very discontented personality indeed to jeopardize it by immediately reaching for another one.

The basis of Robert Dole's claim is, essentially, seniority. He ran for Vice President in 1976, finished second in the 1988 primaries, and serves now as the Senate majority leader. He is hugely popular inside the party. Even conservatives who resented his antipathy to supply-side economics in the 1980s have made their peace with him.

Dole's greatest political weakness (or is it his greatest strength?) is his allergy to ideas. He mistrusts them, and he mistrusts people who have them. It's hard to imagine what a President Dole would spend his days doing -- except, of course, for building a U. S. ethanol industry second to none. Even so, he exudes power. One Republican compares the Dole machine to the Red Army in its great days: maybe it's creaky and anachronistic, but nothing on earth can match its mass and firepower.

If Dole disdains ideology, Lamar Alexander is attempting to transcend it. He had originally planned to run on a platform of congressional reform: "Cut their pay and send them home." That message, obviously, packs less punch among Republicans today than it did six months ago -- so Alexander is campaigning as an "outsider" against the Washington "insiders" Gramm and Dole. He hopes to attract party moderates with his friendly face and speaking style, while winning over conservatives by outlining big -- though vague -- changes in the way Washington does business.

On the face of it this would seem an unpromising strategy. Alexander, after all, served in the Bush Cabinet as Secretary of Education after two successful terms as a centrist probusiness governor of Tennessee. Never before in his political career has he evidenced any sign of unhappiness with the way the United States is governed. But since 1992 he has struck populist notes whenever he can, if not always on key. Visiting the lower-Manhattan editorial offices of The Wall Street Journal one day last August to make his pitch, he arrived in a polo shirt and hiking boots, looking less like the Last Angry Man than like someone who had paid an image consultant $400 an hour to tell him how to dress like Cincinnatus relinquishing the plough.

Any political consultant would have to rank Dole or Alexander as a safer choice than Gramm. Their ideas are less radical, their visages less homely, their personalities less prickly. But, curiously, the staid Republican Party seems to be the party that pays less attention to safety. The roster of recent Democratic presidential candidates is gray with moderation and risk-aversion: Clinton, Dukakis, Mondale. It is the party of Reagan and Gingrich that is the adventuresome party, the party that thrills to political risk. Nominating Gramm would be the biggest risk yet. And yet since last November, Republicans have become even more willing than usual to trust their luck.