Inside Mondale's 'mainstream crowd' of economic advisers
When President Reagan wants economic advice or budget statistics for campaigning, he can turn to a legion of government forecasters and budget experts.
Against that army, the Mondale campaign fields Susan Irving, a young, witty, Harvard PhD in public policy who is Democratic presidential hopeful Walter F. Mondale's sole in-house budget, tax, and economics specialist.
Campaign staff members are wary of the limelight, and Ms. Irving is no exception. Mr. Mondale knows a wide variety of economists from his years as vice-president and before that as a member of the Senate Finance Committee.
He often calls these experts directly, Irving notes. ''He doesn't have to go through me'' for economic advice, she adds.
Still, her ideas and activities shed some light on how Mondale makes economic policy and how that policy is being received.
Although Mondale draws on a large number of economists for tutorials on economic subjects, a relative handful actually participate in policy formulation. These policymakers tend to hold relatively homogenous and traditional economic views.
So far, the combination of tax increases and spending cuts that these advisers helped Mondale devise has drawn uneven reviews. The plan has been only cautiously embraced by other Democratic candidates; it received scathing reviews from most Republicans and many business groups; and some of its underlying assumptions drew restrained criticism from nonpartisan economic consulting firms.
Mondale's deficit-reduction program ''is traditional. There is nothing unique about it. It is one of a long line of attempts to get the deficit down,'' says Robert Gough, senior vice-president of Data Resources Inc., an economic forecasting firm.
Irving admits that she and other Mondale advisers on economics ''are a very mainstream crowd. The last sharp creative-departure crowd (the supply-siders) told you they could cut taxes and get more revenues and balance the budget. You don't have to defy common sense to be creative.''
Another member of this mainstream crowd is Sheldon S. Cohen, a former commissioner of the Internal Revenue Service and an outside Mondale economic adviser.
During Mondale's service on the Senate Finance Committee, Mr. Cohen set up informal tutorial luncheons with top budget and economic experts. This tutorial approach has continued. Before Mondale was nominated, he met at his North Oaks, Minn., home ''with a large group (of economists), where he heard a variety of ideas,'' Cohen says.
But when it came time time to draft the deficit reduction plan, Mondale worked with a smaller group ''he was more for comfortable with,'' Cohen says.
The main participants in the final drafting of Mondale's deficit-cutting plan were:
* William Galston, issues director for the Mondale campaign and a University of Texas government professor. He wrote speeches in 1980 for then-presidential candidate John Anderson.
* Richard Leone, senior adviser to the campaign.
* W. Bowman Cutter, now a partner in the accounting firm of Coopers & Lybrand and formerly associate director of the Office of Management and Budget under President Carter.
* Cohen, who is now a partner in the Washington law firm of Cohen & Uretz.
* Irving, who previously was chief of staff for Charles Schultze when he was chairman of the President's Council of Economic Advisers in the Carter administration. Later she served as vice-president of the nonpartisan Committee for a Responsible Federal Budget.
Mondale also sought advice directly from Rep. Dan Rostenkowski (D) of Illinois, chairman of the tax-writing House Ways and Means Committee, Irving notes.
''It would be a major mistake to imply that a group of staff people drew up a plan, and Walter Mondale checked 'yes,' '' Irving cautions. ''He believes that the budget is a statement of beliefs and priorities.''
While Mondale has been on the road trying to sell his deficit-cutting plan, Irving has been in Washington providing technical explanations to reporters and economists. Her job also involves watching for what she feels are economic misstatements by Reagan.
As a self-described ''middle-of-the-pack, but committed runner'' in her off-hours, Irving has a lot of experience in running uphill. And that was what the Mondale campaign seemd to be doing last week, as it tried to sell its deficit-cutting plan. ''We are not trying to suggest that the deficit is the be-all and end-all,'' Irving says. ''But asking my younger sister to pay for my living standard (by saddling her with high federal interest bills) is, at a gut-level, offensive.''
Mondale's deficit-cutting plan includes $85 billion in tax hikes and $24 billion in net spending cuts by fiscal 1989. It assumes that deficits will push up interest rates and harm the economy, and that the nation cannot grow its way out of the problem.
Irving disputes those who say boosting taxes to trim the deficit runs the risk of bringing on a recession. In effect, that is saying growth will continue ''only if you continue a $200 billion deficit. I don't believe that,'' she says. But she admits that since the economy seems to be slowing ''it would have been better to deal with the deficit last year or this year. But (the Mondale campaign) didn't have that option.''
Irving also disagrees with those who say Mondale's plan is unrealistic in assuming interest savings of $51 billion due to the effects of falling deficits. Economists she consulted say the 1.5 percentage-point drop in interest rates that the plan assumes ''is low. They would have expected a bigger'' drop in rates, she says.