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Late N.H. senator’s words bear on fiscal fight

Senator Warren B. Rudman doubted President Reagan’s fiscal policies.

Carol M. Highsmith/Library of Congress/File

Senator Warren B. Rudman doubted President Reagan’s fiscal policies.

WASHINGTON — Warren B. Rudman, the famously cantankerous Republican senator from New Hampshire, sat down two years ago for one of those oral history interviews that are supposed to set the record straight, blunt talk for the ages.

As it turns out, Rudman — who died last week and will be given a Capitol Hill tribute Thursday — provided not only an epilogue to his life, but also insights for solving today’s fiscal crisis.

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“Frankly, I blame the American people as much as I blame the Congress,” Rudman said of the deficit. “They talk a great game, the American people do . . . [they] are against deficit spending, as long as it didn’t affect anything that they benefit from.”

Few politicians still in office would dare utter such thoughts. The public overwhelmingly gives low ratings to Congress, and now, with tax increases and mandated spending cuts set for year’s end, legislators are struggling to solve the crisis without further angering voters.

Any solution is likely to rely on selling the public on massive cuts down the road, which will put Rudman’s words to the test.

Rudman’s little-noticed oral history was recorded by the University of California,Berkeley. It could provide lessons about how to resolve the crisis — if legislators are interested in paying more than lip service to Rudman’s words and want to follow a model he pursued more than two decades ago.

As Rudman recalled his role in his fight to eliminate the deficit, nearly every element echoes what is happening today: There were automatic spending cuts, debates about whether tax cuts increased growth, votes to increase the debt ceiling, and rancor about violating a no-new-taxes pledge. In the end, Rudman’s legislation eventually prompted measures that put the nation on the road to budget surpluses, but those laws and deals were eventually undone. The total accumulated debt is about $15 trillion, more than three times than when the legislation was passed.

Americans ‘are against deficit spending, as long as it didn’t affect anything that they benefit from.’

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Thus, as members of Congress prepare to attend today’s memorial service for Rudman, his former associates say the lesson of that prior battle not only should be remembered, but applied to the current crisis.

“Everybody knows what has to be done,” said Rudman’s former communications director, Bob Stevenson. “Rudman didn’t have a lot of patience for political timidity.”

Rudman, who was elected in 1980 and served two terms, recalled in his oral history how he was pushed by fellow Republicans to support President Reagan’s tax cuts under the theory that they would spur growth and actually increase tax revenues.

He recalled then-Senate majority leader Howard Baker of Tennessee admitting, “It’s a riverboat gamble.”

The oral history interviewer asked Rudman what he thought about Reagan’s supply-side theory.

“Oh, I never believed that for a minute,” Rudman replied.

As for his colleagues, he said, “some of them went for it hook, line, and sinker. Some didn’t.”

That theory, of course, remains at the center of the debate over how to resolve today’s fiscal cliff. Many Republicans argue against ending the George W. Bush-era tax cuts for families earning more than $250,000 a year on grounds that letting the lower rates expire will cut economic growth and eventually reduce revenues.

President Obama has argued that tax cuts for the wealthiest should be allowed to expire, asserting that they increased the deficit and caused some of the problems that led to the fiscal cliff.

Back in the mid-1980s, after Reagan’s tax cuts had begun to take effect, Rudman became further convinced the “supply-side” tax cuts were increasing, not decreasing, the deficit. Votes were taken to raise the debt ceiling, just as has been necessary more recently. Rudman came up with the idea of attaching a resolution to the debt-ceiling vote that required deficit reduction.

Rudman said he called Phil Gramm, the Texas Republican senator who had played a key role in passing the tax cuts. “I said to Phil, ‘Look what the hell you’ve done . . . you’ve got to fix this.’ ” They became partners in the effort, along with some like-minded senators.

The so-called Gramm-Rudman measure took effect in 1985 and resulted in what was called a sequester — the same word now being used in discussions about the fiscal cliff — that required billions of dollars in automatic budget cuts. The Supreme Court found the measure unconstitutional due to the way the cuts were triggered, prompting Congress to pass a version in 1987 that shifted authority for making the cuts to the White House.

But as $100 billion worth of cuts loomed in 1990, President George H.W. Bush agreed to negotiations that resulted in his decision to violate his “no new taxes” pledge.

That led to passage of a package of tax hikes and more moderate spending cuts, which Rudman supported. Referring to the tax increases in the deal, Rudman said in the oral history, “Nobody likes them, but what the hell? It was obvious we had to do it.”

The initial Gramm-Rudman approach, relying on automatic cuts, was highly controversial at the time, with echoes of the crisis facing Congress today.

“Most scholars believe that while Gramm-Rudman on its face was a failure, it slowed down government spending,’’ said Allen Schick, a University of Maryland professor who has written extensively about the federal budget. “And it led to the 1990 budget deal, which was the equivalent of the fiscal cliff.”

After deciding not to seek reelection in 1992, Rudman and former senator Paul Tsongas of Massachusetts joined with others to create the Concord Coalition, which advocates deficit reduction. In 2001, Rudman and the coalition criticized President George W. Bush’s proposal for sweeping tax cuts.

Rudman appeared at a Washington press conference and suggested a more modest approach. It would be better, he said, to enact “a more moderate tax cut in place over the next several years, and then . . . if these surpluses pile up, no reason not to renew it and expand it. That would make a great deal of sense.”

Bush rejected that advice and presided over passage of his tax cut package, the first of two such reductions that critics have said exploded the deficit.

As Rudman sat for the interview in 2010, history seemed to be repeating itself. It took place a day after Obama gave in to Republican demands to extend the George W. Bush-era tax cuts, even though Obama feared the measure would further increase the deficit.

“My party is to blame for it as much as anyone, although neither party has been very fiscally conservative over the last eight years, 10 years,” Rudman said.

Over the years, Rudman often joked that measures forcing automatic cuts such as Gramm-Rudman were bad ideas whose time had come. “You shouldn’t have to have a statute that causes people to do what they were elected to do, and that’s to be responsible,” Rudman said in the oral history.

Bob Bixby, the Concord Coalition executive director who worked for years with Rudman, plans to be at the memorial service and hopes it will serve as a springboard for solving the fiscal cliff. The question, he said, is whether lawmakers attending the service will go beyond the solemn rhetoric of the hour and implement what Rudman believed.

“It couldn’t be any better that they would go from the Rudman memorial into a budget negotiation,” Bixby said. “Just go into the next room and start thinking about what everybody said about Warren Rudman. Clearly if he stood for anything it was for members of Congress to make hard choices on the budget and to do so in a bipartisan way, which is exactly what we need to do now.”

Michael Kranish can be reached at kranish@globe.com. Follow him on Twitter @GlobeKranish
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