I, PHIL GRAMM

Instead Gramm started talking, as he so often does, about himself. He described how he would beat Bob Dole, how he was the only candidate who could. He talked about fund-raising, organization, his by-now- legendary computer list of supporters, and his strategy. The one thing he barely mentioned was cutting taxes. Winding down his monologue, Gramm finally asked Forbes for his thoughts. “You just keep doing what you’ve been doing, Senator,” Forbes replied. Within weeks Forbes was a candidate himself, spending millions on a message Gramm had spurned and, at least at this writing, emerging as the strongest challenger to Dole.

Only a year ago the smart Republican money was betting on Phil Gramm to play that role. Bob Dole was to be the favorite of the party establishment. Lamar Alexander, remade from his Bush years, was bidding to be the outsider. But Bill Bennett, Dan Quayle, Jack Kemp, and Dick Cheney had all dropped out, leaving the way clear for Gramm to unite the GOP’s nominating wing of conservatives. While Pat Buchanan would run, he couldn’t win. Phil Gramm was poised to be Ronald Reagan’s heir.

That Gramm has failed in that effort, at least so far, is one of the biggest surprises of the 1996 campaign. Especially given his many political strengths. The Texan may be the smartest presidential candidate since Nixon. He has a solid conservative record. His signature lines — “I know who I am; I know what I believe in” — are designed to convey his toughness and willingness to stand alone against Washington, in contrast to the deal-making Dole. And these claims have some credibility given his early opposition, back in 1993, to the Clinton health care plan. Gramm’s attacks pulled that debate to the right — and right out from under the White House.

Yet this same stubborn strength of conviction has also turned out to be an ironic source of weakness for Gramm as a presidential candidate. His self- absorbed meeting with Forbes is notable not because it is unique but because it echoes so many others. Gramm is running a campaign out of his own hip pocket the way Dole did in 1976 and 1988. He is his own political strategist and his own policy adviser. A joke among Texas politicos describes a Phil Gramm strategy session: Phil and his mirror. Ronald Reagan liked to use the democratic “we,” as if he were speaking for a movement and eventually the country. Gramm speaks and thinks in terms of”I,” which has hurt his attempt to inherit the movement.

Gramm, who has a better sense of humor than most people know, even jokes about this trait himself, trying to turn it into a virtue. Before a gun owners rally in Manchester, N. H., this month, Gramm put it this way: “The job of your staff is to give you bad advice. Your job is to ignore it.” One of his friends says only two people can give Gramm advice he’ll actually heed: his wife Wendy and his best friend in the Senate, John McCain.

More than once Gramm has followed his own advice headlong into avoidable trou ble. The first was giving everyone in New Hampshire the idea that he wanted to undermine the state’s primary. Every four years one candidate or another thinks he can somehow dodge the Granite State. This time Gramm dallied with b oth Arizona and Delaware as they tried to out- maneuver New Hampshire’s first- in-the-nation status.

The Texan was warned repeatedly — by advisers, by GOP Gov. Stephen Merrill — how damaging this would be. He didn’t listen. Three New Hampshire Republicans say Gramm promised them personally he’d defend their state’s ability to remain at least seven days ahead of all others on a 1995 visit to Delaware. But when he spoke in Delaware he never mentioned the seven days. The episode hurt Gramm with two institutions that once thought of endorsing him: Gov. Merrill and the Manchester Union Leader. “He comes across, before public groups and in private, as not really listening, but telling people,” says Joe McQuaid, editor of the Union Leader, which later endorsed Buchanan. Gramm is now running fourth in New Hampshire.

One plausible Gramm selling point was that only he had a message to unite both social and economic conservatives. Yet his “I, Gramm” style managed to alienate important members of both groups early in the campaign. His disastrous meeting last spring with Christian radio broadcaster James Dobson has been well reported. “I am not a preacher,” Gramm told Dobson. The episode allowed Buchanan and Alan Keyes to portray Gramm as a “libertarian” uncomfortable with social concerns.

More damaging still was its timing, coming as it did when Dole was traveling to Hollywood to attack Hollywood mores. The Dole speech made a splash and helped Dole with the Christian right. Gramm tried to recoup by giving a widely advertised commencement address at Jerry Falwell’s Liberty University. The candidate took a speech draft from Quayle writer John McConnell and rewrote most of it himself. It elaborated on a favorite Gramm theme: The only real obstacle to a revival of American virtue is big government. He hardly mentioned the broader culture or other sources of cultural rot. He even took a shot at “politicians who lament the passing of America’s virtues and call for a moral revival.”

Gramm is right that smaller government can unite social and economic conservatives, but he then undermines that very unity when he suggests that politics is separate from culture. He likes to say that the job of “Caesar” ( the politicians) is to shrink the state, while the job of moral revival is best left to “God” (religion). He seems to abjure any role for a president in encouraging such a revival, or even speaking to the country’s best moral instincts. There is a libertarian consistency to this. Yet it overlooks what many conservatives, not to mention most Americans, want to hear from their political leaders. Reagan understood that politics is, in part, preachment.

In the event, the speech fell flat; it seemed to be following in Dole’s wake and pandering to a Christian crowd. “At a critical early moment in the campaign, when it came to gaining the support of social conservtives, Gramm was playing defense when he should have been playing offense,” says the Christian Coalition’s Ralph Reed, who has remained neutral in the GOP race. While Gramm has since made inroads on the social right, especially in Iowa, that early misstep gave the Dole camp a wedge to split off support.

Gramm’s biggest self-inflicted wound, however, was in giving little credence to the GOP’s tax-cut wing. Especially after Kemp dropped out, these free- marketeers should have been his. It wouldn’t have taken much to get them. He might have endorsed a version of the flat tax, or even simply made tax-cutting and optimism a more prominent part of his message. Several advisers, and Forbes in two different meetings, urged Gramm to do so. But in late 1994 Gramm had made his own political judgment that the main lesson voters had sent that year was to cut spending. “It is clearly what our mandate was in that election, ” he told me at the time.

That judgment happened to fit conveniently into the broader Gramm vision of politics going back to the 1980s. Even in the Reagan years, he was always a spending-cuts-first man. Gramm, the free-market economist, would never fall for Lester Thurow’s brand of “zero-sum economics.” Yet his political model is surprisingly zero sum. You’re either pulling the wagon, as he likes to say, or you’re riding in it. Democrats like to take money from families to give to government, so the Republican agenda should be to take money from government to give to families.

This is a reductionist political vision that is very un-Reaganesque. While Re agan assailed government, as Gramm rightly does, he also offered tax cuts to li ft the boats that’d be pushed from their government docks when spending was cut . But Gramm, in attacking Forbes, claims that Reagan’s approach failed in the 1 980s. Gramm says that only by cutting spending first can Republicans get the mo ney to cut taxes. “I believe that deficits matter in a very powerful way,” Gram m says, while bouncing around his New Hampshire van, “because unless you deal w ith the deficit, you wil l never be able to get support for the growth incentives you’re going to need.”

But Forbes isn’t saying that deficits don’t matter. His point is that only by cutting taxes and spurring the economy can Republicans maintain the political support to cut spending. Forbes wins the political argument, in my view, when he says: “If Ronald Reagan had just passed spending cuts, he’d have been a one-term president.” The trouble Republicans have had cutting spending even in this “revolutionary” Congress is more evidence for Forbes’s point of view.

Forbes’s sudden rise would also suggest that Gramm’s political judgment on tax cutting was wrong. This month the Texan implicitly admitted as much by introducing his own version of a flat tax. Yet it comes late, and on the stump Gramm still introduces his proposal by saying, “The most important tax reform is not spending the money.”

For all of his talk of political bravery, Gramm takes a far less daring approach than Forbes by retaining the deductions for mortgage interest and charity. He even walks away from the capital gains tax cut, except for indexing for inflation. “I don’t think taxing wages and capital at the same rate is sustainable in a democracy,” he says. That may be safer politically, but it’s strange to hear Phil Gramm waving the white flag at Democratic class- warfare attacks.

One virtue of stubbornness is that it keeps you driving despite the polls, and Gramre, in his relentless fashion, claims to be right on course. “I believe that’s going to happen,” Gramm says about conservatives unifying behind him. “But I believe it’s going to happen late. For a number of reasons, people did not focus on this race early. There were lots of diversions.”

His strategy now is to win in Louisiana (where only he and Buchanan are playing) to give him a lift into Iowa. Gramm has spent lavishly to build an organization in Iowa that he hopes will propel him past Forbes into second in the caucuses. He’s been hitting social conservative themes hard, hoping that in the end Keyes and Buchanan supporters will move to him as the only one of those three who can win.

Gramm hopes that finishing second in Iowa will then lift him from his current depths in New Hampshire. Forbes is an obstacle, but Gramm is counting on his new flat tax proposal combined with his balanced-budget pitch to prevail.

“Our polling shows that the balanced budget is the most important issue by far. The flat tax is seventh or eighth,” Gramm says. If he’s close to Dole in New Hampshire, then the campaign moves to Gramm’s strength in the South, where it will be a two-man race.

It’s a plausible scenario, especially if Forbes can’t translate his polling support into actual votes on Iowa caucus night. But it had better work, because Gramm all but admits that he won’t have enough money to survive past South Carolina on March 2 without showing early strength. The renowned fundraiser has turned out to be a legendary campaign spender. He wasted some of it on 1995 straw polls that counted for little. He has to hope he hasn’t wasted it on his Iowa organization.

The intriguing question is how well he’d be doing if Forbes hadn’t entered the race. Some voices on the right have lately been lamenting that conservatives are falling for the liberal sin of factionalism. National Review, which once tried to unite the right, now attacks Forbes as a ” spoiler” whose candidacy will hurt its favorite, Gramm. And it’s true enough that conservatives no longer fight moderates within the GOP; there aren’t enough moderates to fight. They compete with other conservatives to influence the Republican message.

The task of political leadership is to offer a vision large enough to encompass these competing wings. Gramm says he knows what he believes in. But he’d be a stronger candidate if he had reached out earlier to persuade more conservatives that he believed in what they believe in. ,

Paul A. Gigot’s column appears Fridays in the Wall Street Journal.