He served as special assistant to
United States Representative and 1980 U.S. presidential candidate
John Anderson of
Illinois, 1970–1972, and was executive director,
United States House of Representatives Republican Conference, 1972–1975.
U.S. House of Representatives In 1976, Stockman was elected from
Michigan's 4th congressional district (in
Southwest Michigan) to the
House of Representatives for the
95th Congress. He was reelected in the two subsequent elections. In total, he served in the House from January 3, 1977, until his resignation on January 21, 1981, to accept appointment as Director of the
Office of Management and Budget for
President Ronald Reagan.
Office of Management and Budget Stockman was one of the most controversial OMB directors ever appointed, also known as the "Father of
Reaganomics." Committed to the doctrine of
supply-side economics, he assisted in the passing of the "Reagan Budget" (the
Gramm-Latta Budget), which Stockman hoped would curtail the "
welfare state". He thus gained a reputation as a tough negotiator with House Speaker
Tip O'Neill's Democratic-controlled House of Representatives and Majority Leader
Howard Baker's Republican-controlled
Senate. During this period, Stockman became well known to the public during the contentious political wrangling concerning the role of the federal government in American society. Stockman's influence within the Reagan Administration was weakened after the
Atlantic Monthly magazine published the infamous 18,246-word article, "The Education of David Stockman", in its December 1981 issue, based on lengthy interviews Stockman gave to reporter
William Greider. , 1981 Stockman was quoted as referring to Reagan's tax act in these terms: "I mean,
Kemp-Roth [Reagan's 1981 tax cut] was always a Trojan horse to bring down the top rate.... It's kind of hard to sell 'trickle down.' So the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory." because of his candor with Greider, Stockman became concerned with the projected trend of increasingly large federal
deficits and the rapidly expanding
national debt. On August 1, 1985, he resigned from OMB and later wrote a memoir of his experience in the Reagan Administration titled
The Triumph of Politics: Why the Reagan Revolution Failed in which he specifically criticized the failure of congressional Republicans to endorse a reduction of government spending to offset large tax decreases to avoid the creation of large deficits and an increasing national debt.
Fiscal legacy and David Stockman at
Camp David during a debate preparation for upcoming debate on domestic policy, 1984 President Jimmy Carter's last fiscal year budget ended with a $79.0 billion budget deficit (and a national debt of $907.7 billion as of September 30, 1980), The gross federal national debt had just increased to $1.0 trillion during October 1981 ($998 billion on September 30, 1981, up from $907.7 billion during the last full fiscal year of the Carter administration). Stockman's OMB work within the administration during 1981 until August 1985 was dedicated to negotiating with the Senate and House about the next fiscal year's budget, executed later during the autumn of 1985, which resulted in the national debt becoming $2.1 trillion at fiscal year end September 30, 1986.
Business career After leaving government, Stockman joined the Wall St. investment bank
Salomon Brothers and later became a partner of the New York–based private equity company, the
Blackstone Group. His record was mixed at Blackstone, with some very good investments, such as American Axle, but also failures, including Haynes International and Republic Technologies. On the strength of his investment record at Blackstone, Stockman and his partners raised $1.3 billion of equity from institutional and other investors. With Stockman's guidance, Heartland used a contrarian investment strategy, buying controlling interests in companies operating in sectors of the U.S. economy that were attracting the least amount of new equity: auto parts and textiles. With the help of about $9 billion in
Wall Street debt financing, Heartland completed more than 20 transactions in less than 2 years to create four portfolio companies:
Springs Industries,
Metaldyne,
Collins & Aikman, and TriMas. Several major investments performed very poorly, however. Collins & Aikman filed for bankruptcy during 2005 and when Heartland sold Metaldyne to Asahi Tec Corp. during 2006, Heartland lost most of the $340 million of equity it had invested in the business.
Collins and Aikman Corp. During August 2003, Stockman became CEO of
Collins & Aikman Corporation, a Detroit-based manufacturer of automotive interior components. He was ousted from that job days before Collins & Aikman filed for bankruptcy under Chapter 11 on May 17, 2005.
Criminal and civil charges On March 26, 2007, federal prosecutors in Manhattan indicted Stockman in "a scheme... to defraud [Collins & Aikman]'s investors, banks and creditors by manipulating C&A's reported revenues and earnings." The
United States Securities and Exchange Commission also brought civil charges against Stockman related to actions that he performed while CEO of Collins & Aikman. Stockman suffered a personal financial loss, over $13 million, along with losses suffered by as many as 15,000 Collins & Aikman employees worldwide. Stockman said in a statement posted on his law firm's website that the company's end was the consequence of an industry decline, not due to fraud. On January 9, 2009, the US Attorney's Office announced that it would discontinue prosecution of Stockman for this case. ==Personal life==