Read My Lips and How the 1990 Budget Deal Led to the 1992 Defeat

Politicians break promises every day, and most of the time nobody cares. The promises that sink a career are the ones short enough to fit on a bumper sticker.

Four words did it for George H. W. Bush: no new taxes. He said them in a speech in New Orleans in August 1988, and he said them with a flourish that made it impossible to take them back. Two years later he signed a budget law that raised taxes. Two years after that he lost to the governor of Arkansas.

I want to argue that this is the most useful cautionary tale in modern Republican history, and that it has been misread in both directions. Some conservatives treat it as proof that you must never compromise. Some Washington insiders treat it as proof that voters are fools who punish responsible governing. Both lessons are wrong. The right lesson is about what a promise is, what it is worth, and what you owe people when circumstances change.

The thesis

Here is my argument in one paragraph. A specific, repeated, public pledge is a form of currency. When a politician spends it, he spends something that belongs to the voters who relied on it. Breaking it can be defensible if the facts change, but it has a price, and the price is paid not mainly in the policy but in trust. Bush paid it in full. The lesson for the rest of us is not "never compromise." It is "never promise what you cannot deliver, and if you must break your word, do it openly, early and for something big."

I'll build that out in numbered steps, answer the strongest objection, and give a verdict.

Premise one: the pledge was specific, and it was the centerpiece

In the summer of 1988, Bush trailed the Democratic nominee, Michael Dukakis, in the polls. On August 18, at the Republican convention in New Orleans, he gave the speech of his life. It was written by Peggy Noonan, and the line everyone remembers was a direct challenge to Congress, which he expected to press him to raise taxes: "Read my lips: no new taxes."

Look at what that sentence did. It was not "I will try to hold the line" or "I will oppose unnecessary increases." It was an unqualified pledge with a flourish. Voters remembered it because it was unambiguous. He repeated the idea throughout the fall, and he won in November with 426 electoral votes to Dukakis's 111.

Now ask what the voters concluded. They concluded that this man would not raise their taxes. That was the deal. It was not a footnote. It was the contract.

Premise two: the circumstances did change

Here is where the defense of Bush has force, and I'll state it as strongly as its supporters would.

By 1990 the federal deficit was a problem, and an automatic spending-cut process created by the Gramm-Rudman-Hollings law of 1985 threatened deep, indiscriminate cuts if the deficit targets were missed. Democrats controlled both the House and the Senate. They were not going to cut spending enough to close the gap without new revenue, and they said so.

In the spring of 1990, negotiators from the White House and Congress met at Andrews Air Force Base. The president's chief of staff, John Sununu, and budget director, Richard Darman, were at the table, along with Treasury Secretary Nicholas Brady. Eventually, in a written statement on June 26, 1990, Bush said that tax revenue increases would be necessary as part of a deal. The statement was short, and every word of it undid the convention pledge.

The economy was also turning down. The country went into a recession in July 1990. Iraq invaded Kuwait on August 2, and the government had to think about the cost of a Gulf deployment. (The other side of his record, the foreign policy of those years, is in George H. W. Bush managed the end of the Cold War without a victory lap.) The case for a deal was that a divided government, a looming automatic cut and a slowing economy gave Bush no clean way out.

Premise three: the deal he signed was a serious one

The agreement reached on September 30, 1990 included a package of tax increases and spending restraints. When it finally became law as the Omnibus Budget Reconciliation Act, signed on November 5, 1990, it included:

• A higher top income tax rate, from 28 percent to 31 percent.
• A five-cent increase in the gasoline tax.
• New taxes on luxury items such as yachts, jewelry, furs and expensive cars, most of which were later repealed.
• Spending cuts, including to Medicare.
• And a new set of budget rules: caps on discretionary spending and a pay-as-you-go requirement that new entitlement spending or tax cuts be paid for.

It was advertised as cutting the deficit by roughly $500 billion over five years. Some of those rules did what they promised. The caps and the pay-as-you-go rule, historians agree, helped keep spending in check in the 1990s, and they were one of the building blocks for the balanced budgets of the late decade. We trace that history in divided government gave us welfare reform and a balanced budget and in How Washington learned to budget, from the 1921 act to the 1997 deal.

That is the best case for what Bush did, and I don't dismiss it. Governing is not a debating contest. A president who refuses every compromise can leave the country with worse results.

Premise four: the way he did it was the problem

Here is where the defense runs out. A president could have made the case to the voters before he signed. He could have said: I made a promise, the circumstances have changed, here is what I am asking you to accept, here is what we get in return, and you can judge me for it. Instead, the shift happened in stages and in a written statement, with the language of a bureaucrat. The man who had said "read my lips" in front of the nation and the cameras now spoke of "tax revenue increases."

The deal was also lopsided in how it was perceived. Conservatives in the House saw the tax hikes as concrete and the spending cuts as promises. That distinction is one that Republicans had learned the hard way. In 1982, Reagan had accepted a tax increase on the promise of deep spending cuts, which, as we explain in The Reagan Tax Cuts Rate by Rate and the Tax Reform of 1986, largely never arrived.

And the House revolted. A young Georgia Republican, Newt Gingrich, then the minority whip, broke with the president and with his own party leader, Minority Leader Bob Michel, and campaigned against the agreement. On October 5, 1990 the House rejected the first version of the deal. The government briefly shut down over the Columbus Day weekend. A revised package passed a few weeks later. But the damage to Republican unity had been done in plain view.

Premise five: the cost showed up in 1992

Now watch the next two years.

In December 1991 the commentator Pat Buchanan announced he would challenge the president for the Republican nomination. In the New Hampshire primary in February 1992, Bush won, but Buchanan took about 37 percent of the vote. A sitting president in a primary against a protest candidate does not win by a nose; he loses face.

In February 1992 Ross Perot, a Texas billionaire, announced on a television talk show that he might run for president if volunteers put him on the ballot. He made the deficit the center of his campaign. He dropped out in July and got back in during October. When the votes were counted, Perot received 18.9 percent of the popular vote and no electoral votes.

Bill Clinton won with 43.0 percent of the vote, against Bush's 37.4 percent. In the Electoral College it was 370 to 168. The arithmetic of the vote tells part of the story: Bush's 37.4 plus Perot's 18.9 is 56.3 percent, a majority that, had it voted as one bloc, would have beaten Clinton's 43.0. I am not saying Perot voters would all have voted for Bush. They came from both directions, and the sum proves nothing by itself. It does show how large the anti-establishment vote was.

Historians give the 1992 defeat several causes: a slow recovery from the recession, Clinton's talent as a campaigner, the Perot candidacy, and the sense that Bush was out of touch with ordinary people's economic worries. The sign in Clinton's campaign headquarters about the economy summed it up. The broken pledge belongs on that list, and the record suggests it was not a minor item. It gave his opponents a one-line argument against his honesty, and it demoralized the voters he most needed.

The strongest objection

The objection goes like this. Voters are not that logical. Bush lost because of the economy, and he would have lost with or without the pledge. The recession and the slow recovery were the main cause, and the tax deal was a side issue that columnists made much of. Besides, the country was better for the deal. Revenue went up, the deficit shrank and the economic boom of the 1990s followed. And a conservative who believes, as we argue in A Balanced Budget Is a Moral Argument Before It Is an Accounting One, that deficits are a burden on the next generation should hesitate before condemning a deal that cut one.

This is a strong objection, and part of it is right. The economy was the main driver. And the budget rules did help.

But the objection leaves out three things. First, the broken pledge did not need to be the main cause to be a significant one. In a loss of 43.0 to 37.4, with a third candidate at 18.9, small shifts at the edge mattered. Second, the deal's tax increases came while the economy was shrinking, which critics argued was the wrong moment to raise taxes, though economists differ on how much it mattered. Third, and most important, the fight left the Republican coalition fractured. The voters most motivated by taxes were the ones the party could least afford to lose, and they stayed home or went to Perot.

And here is the clincher. Look at what followed. In 1993 Clinton and the Democratic Congress passed a deficit-reduction law that raised the top income tax rate to 39.6 percent. Not one Republican in either chamber voted for it. In the Senate it passed 51 to 50, with Vice President Al Gore casting the deciding vote. The Republicans had learned the lesson of 1990 in a way that no seminar could have taught them. The majority that swept into the House in 1994 made a point of promising only what it could put to a vote, a story told in The 1994 Contract With America and the End of Forty Years of House Rule.

The verdict

So what is a promise worth? Here is how I'd put it, plainly.

A promise to voters is worth exactly what it costs to break. Bush found the price was high because he had made it as loud and as clear as a promise can be. He then broke it in a muffled way, so that he got the political cost of a betrayal and little credit for courage.

The lesson for officeholders is simple. Don't promise on the one thing you may not control. If you do, treat the promise as a contract: if circumstances force a change, go to the voters first, explain what you are asking and what you are getting, and take your lumps in public.

The lesson for voters is just as plain. Judge candidates by the pledges they make and by how they handle them. A politician who takes a pledge seriously, even one you disagree with, is more dependable than one who treats every word as negotiable. This is why many Republicans after 1990 took up the pledge circulated by the group Americans for Tax Reform, which asked candidates to promise in writing never to vote for tax increases. Whether you think the pledge is wise policy or a blunt instrument, you can understand where it came from.

The bottom line

• Bush's August 18, 1988 pledge was specific and loud, and the November 5, 1990 budget law that raised the top rate to 31 percent and the gas tax by five cents broke it.
• The defense of the deal is real: divided government, automatic cuts and a slowing economy, plus budget rules that helped later. The failure was in how it was done and in the promise itself.
• The cost showed up in the Buchanan challenge, the Perot candidacy and a 1992 result of 43.0 percent for Clinton against 37.4 percent for Bush.
• Don't sign a pledge you can't keep, and don't ask a candidate to sign one you wouldn't keep yourself. Ask what he would do if the numbers changed.
• When a public official changes position, expect him to explain it to you directly, before he acts, and hold him to that standard.