Who's the Real Howard Dean?

As Vermont governor, the liberal firebrand was a fiscal conservative with close ties to business

Howard Dean has fought his way to the front of the Democratic pack jostling for the 2004 Presidential nomination partly because he has won the hearts of so many liberals with his antiwar rhetoric and shoot-from-the-lip style. But who is the real Howard Dean? Is he the left-of-center insurgent being portrayed in the press or the business-friendly fiscal conservative and pragmatic moderate who governed Vermont for 11 years?

Many who worked with Dean are astonished at his current image and comparisons to liberal icons such as George McGovern. "The Howard Dean you are seeing on the national scene is not the Dean that we saw around here for the last decade," says John McClaughry, president of the Ethan Allen Institute, a conservative Vermont think tank. "He's moved sharply left."

Conservative Vermont business leaders praise Dean's record and his unceasing efforts to balance the budget, even though Vermont is the only state where a balanced budget is not constitutionally required. Moreover, they argue that the two most liberal policies adopted during Dean's tenure -- the "civil unions" law and a radical revamping of public school financing -- were instigated by Vermont's ultraliberal Supreme Court rather than Dean. "He was not a left-wing wacko," says Bill Stenger, a Republican and president of Jay Peak Resort, who says he supported Dean because of his "fiscally responsible, socially conscious policies."

Business leaders were especially impressed with the way Dean went to bat for them if they got snarled in the state's stringent environmental regulations. When Canada's Husky Injection Molding Systems Ltd. wanted to build a new manufacturing plant on 700 acres of Vermont farmland in the mid-'90s, for instance, Dean greased the wheels. Husky obtained the necessary permits in near-record time. "He was very hands-on," says an appreciative Dirk Schlimm, the Husky executive in charge of the project.

And when environmentalists tried to limit expansion of snowmaking at ski resorts, "Dean had to show his true colors, and he did -- by insisting on a solution that allowed expanding snowmaking," says Stenger. IBM (IBM ) by far the state's largest private employer, says it got kid-gloves treatment. "We would meet privately with him three to four times a year to discuss our issues," says John O'Kane, manager for government relations at IBM's Essex Junction plant, "and his secretary of commerce would call me once a week just to see how things were going."

Dean also wins accolades for his handling of fiscal policy. "He is a very frugal man," says A. Wayne Roberts, president of Lake Champlain Regional Chamber of Commerce, who worked in the Reagan White House in the '80s. "There is no way in heck he would tolerate a deficit." In fact, Dean resisted pleas from more liberal Democratic legislators to hike spending while pushing through two income tax cuts, paying down the state's debt, and funding the state's "rainy day" reserves. As a result, "we are now one of the few states that is in good shape financially," says Jim Douglas, Dean's Republican successor as governor. In fact, Vermont closed the books on its 2003 fiscal year with a $10.4 million surplus, even as California, Massachusetts, and many other states battle huge deficits.

Dr. Dean gets more mixed reviews for his signature effort to extend health insurance to children and low-income adults. He did that by dramatically increasing Vermont's Medicaid program, quadrupling the number of youngsters it covers. Critics argue that this expansion of government-run health care wasn't adequately funded, and tough regulations drove out many private insurers, reducing competition. Part of the cost was offset by limiting reimbursements to doctors to the point where "they are now far less than the cost of actually providing the services," says Paul Harrington, executive vice-president of the Vermont Medical Society. Still, "Medicaid is on an unsustainable track," warns Governor Douglas, who projects that the program will be losing $150 million a year within five years -- a huge shortfall in a small state, though Vermont is hardly alone when it comes to Medicaid woes.

The most controversial change under Dean's watch was the overhaul of Vermont's traditional system of paying for public schools with local property taxes. The new system shifted funds from rich towns to poor towns through a "sharing pool" and raised the burden on Vermonters earning more than $75,000 a year. It sparked an explosion in education spending, "which is up 40% since 1997 even as the number of students are down 6%," says Douglas -- and a firestorm of protest in wealthy towns such as Stowe. After Douglas took office, the sharing pool was eliminated, property taxes for homeowners were reduced, and the sales tax was boosted to make up for lost revenue, making the Dean education plan less controversial.

On most issues, however, Dean positioned himself as a moderate, well to the right of many members of his own party. To be sure, that was in the context of what is arguably the most liberal state in the country. Conservative critics complain that for all his efforts to help business, Dean never challenged the state's onerous regulations or heavy tax burden. "These policies really discourage development," says Richard Heaps, vice-president of Northern Economic Consulting, who advises many of his clients not to move to Vermont.

Still, Dean had a knack for positioning himself and never lost an election. Those who know him best believe Dean is moving to the left to boost his chances of winning the nomination. "But if he gets the nomination, he'll run back to the center and be more mainstream," predicts Stenger. Says Garrison Nelson, a political science professor at the University of Vermont: "Howard is not a liberal. He's a pro-business, Rockefeller Republican."

Indeed, virtually everyone who has worked with Dean believes he would be a demon at reducing the federal deficit. While balancing the budget and keeping defense expenditures intact, that would leave precious little room for new liberal programs. What it more likely would leave are a lot of dashed expectations among the crowd that so fervently wants the doctor to be in.

By William C. Symonds in Burlington, Vt.

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