Category Archives: Ronald Reagan

Arkansas Media Watch accuses Reagan of increasing spending

Did Ronald Reagan explode federal spending?

On the Arkansas Times Blog on July 21, 2011, the link by Arkansas Media Watch to an article that was critical of Ronald Wilson Reagan (who by the way I named my son Wilson after).

In the article “Arkansas Democrat Gazette editors make fun of Ronald Reagan” by arkansasmediawatch on July 21, 2011 you will read:

Today’s Arkansas Democrat Gazette editorial is a lighthearted satire on Reagan deficit spending. It opens with the following quote from Saint Reagan himself:

“Governments don’t reduce deficits by raising taxes on the people; governments reduce deficits by controlling spending and stimulating new wealth.”

Excellent joke – I never thought Paul Greenberg had a sense of humor. Reagan of course never balanced a budget, on the contrary he was responsible for record deficits as high as 6% of GDP, almost tripling the national debt. Neither did he control spending – he presided over a 69% increase in federal spending, much of which went to the military.

The truth is very different. After adjusting for inflation, federal spending grew less than 1% a year during the 8 years Reagan was in office. Take a look at the video clip below:

Take a look at this article below. To Fix the Budget, Bring Back Reagan…or Even Clinton

Posted by Daniel J. Mitchell

President Obama unveiled his fiscal year 2012 budget today, and there’s good news and bad news. The good news is that there’s no major initiative such as the so-called stimulus scheme or the government-run healthcare proposal. The bad news, though, is that government is far too big and Obama’s budget does nothing to address this problem.

But perhaps the folks on Capitol Hill will be more responsible and actually try to save America from becoming a big-government, European-style welfare state. The solution may not be easy, but it is simple. Lawmakers merely need to restrain the growth of government spending so that it grows slower than the private economy.

Actual spending cuts would be the best option, of course, but limiting the growth of spending is all that’s needed to slowly shrink the burden of government spending relative to gross domestic product.

Fortunately, we have two role models from recent history that show it is possible to control the federal budget. This video from the Center for Freedom and Prosperity uses data from the Historical Tables of the Budget to demonstrate the fiscal policy achievements of both Ronald Reagan and Bill Clinton.

Some people will want to argue about who gets credit for the good fiscal policy of the 1980s and 1990s.

Bill Clinton’s performance, for instance, may not have been so impressive if he had succeeded in pushing through his version of government-run healthcare or if he didn’t have to deal with a Republican Congress after the 1994 elections. But that’s a debate for partisans. All that matters is that the burden of government spending fell during Bill Clinton’s reign, and that was good for the budget and good for the economy. And there’s no question he did a much better job than George W. Bush.

Indeed, a major theme in this new video is that the past 10 years have been a fiscal disaster. Both Bush and Obama have dramatically boosted the burden of government spending — largely because of rapid increases in domestic spending.

This is one of the reasons why the economy is weak. For further information, this video looks at the theoretical case for small government and this video examines the empirical evidence against big government.

Another problem is that many people in Washington are fixated on deficits and debt, but that’s akin to focusing on symptoms and ignoring the underlying disease. To elaborate, this video explains that America’s fiscal problem is too much spending rather than too much debt.

Last but not least, this video reviews the theory and evidence for the “Rahn Curve,” which is the notion that there is a growth-maximizing level of government outlays. The bad news is that government already is far too big in the United States. This is undermining prosperity and reducing competitiveness.

Ronald Wilson Reagan Part 99

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President and Nancy Reagan with Prince Charles and Princess Diana in the Yellow Oval room. 11/9/85.

Ronald Reagan – The Presidential Years Part 1 of 4

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the 12th portion:

Reagan’s most dramatic defeat came in 1987 when he nominated Judge Robert Bork to the Supreme Court.[xli] Bork’s confirmation became an ugly battle against liberal organizations like the American Civil Liberties Union, the AFL-CIO, and People for the American Way. One analyst put the cost of the anti-Bork media campaign at $15 million.[xlii]

Although the American Bar Association rated Bork “well qualified,” the ACLU called him “unfit.” Senator Edward Kennedy, who led the Senate fight against the conservative jurist, charged that Bork’s nomination would lead to an America where women would be forced into back-alley abortions, blacks would sit at segregated lunch counters, rogue police would break down citizens’ doors in midnight raids, school children would not be taught about evolution, writers and authors could be censored at the whim of government and the doors of the federal courts would be shut on the fingers of millions of citizens.[xliii]

Not since 1964 and LBJ’s Anti-Campaign against Barry Goldwater had a conservative been subjected to so fierce and unfair an attack. The Boston Globe’s Supreme Court correspondent wrote that Kennedy “shamelessly twisted Bork’s world view.”[xliv]

Bork’s nomination dominated the political agenda in the late summer and early fall of 1987. His five days of testimony before the Senate Judiciary Committee were nationally televised. Former President Gerald Ford personally introduced the nominee to the committee. Former President Jimmy Carter then sent a letter stating his opposition. One hundred and ten witnesses appeared for and against Bork during two weeks of hearings. Finally, the Democrat-controlled Judiciary Committee refused by a vote of 9-5 to recommend Bork’s nomination. The Senate then voted 58-42 against confirmation: six moderate Republicans broke party ranks and voted with fifty-two Democrats against Bork while two Democrats voted for Bork. Liberals loudly celebrated their victory, but soon after, Reagan nominated and won confirmation of a lower-keyed conservative, Anthony M. Kennedy.

Several factors combined to deny Robert Bork a seat on the Supreme Court: a strongly partisan Democratic Senate, a president weakened by the Iran-contra affair, a White House that did not launch its nomination campaign early enough, a liberal opposition that was better organized and financed than the conservative support, and a nominee who was often contentious and contradictory in his testimony. But ultimately Bork was rejected because of his view that the Constitution was “the Founders’ Constitution” bound by original intent and not a “living document” susceptible to the interpretation of current justices.[xlv] Today, however, Bork’s traditional view of the Constitution is increasingly articulated by a majority of the Supreme Court.

Although Bork’s defeat was a major setback for the Reagan administration, it could not negate Reagan’s significant legal legacy of a conservative federal judiciary from top to bottom. “Reagan’s success lies not simply in quantity but quality,” concluded conservative author Terry Eastland, who worked in the administration’s Justice department. Indeed, Reagan’s judges, according to biographer Lou Cannon, “ranked above [those of] Carter, Ford, Nixon and Johnson.”[xlvi]

Ronald Wilson Reagan (Part 98)

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Princess Diana dancing with John Travolta in the entrance hall at the White House. 11/9/85.

From November of 1980, here is CBS’s coverage of Election Night. Taped from WJKW-TV8, Cleveland. This is part 3 of 3.

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the eleventh portion:

The more than 350 federal judges that Reagan appointed during his eight years in office also constitute an important legacy. He named close to half of all lower-court federal judges, more than any other president. He also elevated conservative William H. Rehnquist to Chief Justice of the United States and appointed three Associate Justices, including the first woman, Sandra Day O’Connor, a moderate conservative. Almost as important as the Rehnquist nomination was that of Antonin Scalia, a U.S. Court of Appeals judge and a former scholar at the American Enterprise Institute. Scalia has been unwavering in his opposition to affirmative action, abortion and what he has called the “liberal jurisprudence” that undergirded judicial activism.[xxxviii]

As Reagan stated in 1986, his goal was a federal judiciary “made up of judges who believe in law and order and a strict interpretation of the Constitution.”[xxxix] The man in charge of the selection progress, Attorney General Edward Meese III, emphasized that the administration aimed “to institutionalize the Reagan revolution so it can’t be set aside no matter what happens in future presidential elections.”[xl]

The president persuaded the Senate to approve his judicial nominations because he was able to forge a broad coalition among traditional conservatives like Strom Thurmond, chairman of the Senate Judiciary Committee; New Right conservatives like John East of North Carolina and Jeremiah Denton of Alabama; and moderate but law-and-order Republicans like Arlen Specter of Pennsylvania. That changed abruptly when Democrats regained control of the Senate in 1986 and named Joseph Biden of Delaware chairman of the Judiciary Committee.

Ronald Wilson Reagan (Part 97)

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The Reagans have tea with Prince Charles and Princess Diana in the White House residence. 11/9/85 .

I remember when I visited London in July of 1981 and the whole town was getting ready for the big royal wedding between Prince Charles and Princess Diana. Above you will see them pictured with President Reagan.

From November of 1980, here is CBS’s coverage of Election Night. Taped from WJKW-TV8, Cleveland. This is part 2 of 3.

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the tenth portion:

Even the Heritage Foundation, as good a friend of the Reagan administration as there was in Washington, concluded after one year that although headed in the right direction, the administration “should and could have accomplished more.” The foundation estimated that of two thousand recommendations made in its monumental Mandate for Leadership: Policy Management in a Conservative Administration, published in late 1980 just before Reagan took office, about 1,270 suggestions — “only” 60 percent — had been implemented or initiated. The “only” seemed gratuitous: Even the fabled Ted Williams of the Boston Red Sox would have been satisfied with a .600 batting average. But conservatives, out of power for decades, were impatient and demanding of results.

Certainly the Reagan administration achieved much in the domestic field in its first term — reducing inflation, lowering unemployment, cutting the prime interest rate in half and producing economic growth of six percent in 1983. But it did not solve all the old problems and indeed failed to even tackle some, such as the federal deficit and intrusive federal departments like Education. After chalking up a series of impressive budget victories in their first year and maintaining the policy initiative, Reagan officials, according to Heritage’s Stuart M. Butler, “appeared to lose their edge.”[xxxv]

There were several reasons for the slowdown. The federal bureaucracy, protective of its power, began to dig in and practice its well-honed delaying tactics. The Democratic opposition in Congress, led by the wily House Speaker Tip O’Neill, organized more effectively. Pragmatic Reagan aides like Jim Baker kept resisting bold initiatives. And the complicated budget process (authorization, appropriation, conference committees, etc.) allowed liberal legislators to block White House proposals and whittle away at the president’s early antispending victories. All the while, the mounting federal deficits made conservatives in Congress increasingly nervous.

Contrary to conservative hopes, Reagan was not able to cut overall government spending, which remained at roughly 22 percent of GNP during his eight years in office. But the change in priorities was significant, with defense spending increasing from 5 to 6.5 percent of GNP, thus enabling the president to deal with the Soviets from a position of strength. Even so, Heritage analysts Robert Rector and Michael Sanera pointed out, the Reagan buildup, measured in constant dollars, was “about half the size of Eisenhower’s peacetime military increases.”[xxxvi] Which suggests, ironically, that Ike himself might have been responsible, at least partially, for the creation of the “military-industrial complex” which he warned America about in his farewell address.

Still, if one examines the economic report cards of American presidents from Truman through Reagan, Reagan easily finishes first. Using the change each year in inflation, unemployment, interest rates and growth in Gross National Product, Harvard economist Robert Barro ranked Reagan number one. Among other things, Reagan engineered the largest reduction in the misery index (the total of inflation and unemployment) in history — 50 percent. In fact, sums up economist Richard B. McKenzie, the 1980s were, up to then, “the most prosperous decade in American history.”[xxxvii]

Ronald Wilson Reagan (Part 96)

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Nancy Reagan photo with Lab School Honorees Tom Cruise, Bruce Jenner, Cher and Robert Rauchenberg in State Dining Room. 10/30/85.

My wife Jill loves to watch the reality show “Keeping up with the Kardashians.” Bruce Jenner who is pictured above is one of the main characters in that show since his wife is Kris Jenner is the mother of all the Kardashians.

From November of 1980, here is CBS’s coverage of Election Night. Taped from WJKW-TV8, Cleveland. This is part 1 of 3.

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the ninth portion:

Sometimes the president sided with reformers as when, after a year of hard work, he signed the Tax Reform Act of 1986 into law. In his 1984 State of the Union address, Reagan had signaled his intention “to simplify the tax code so all taxpayers would be treated more fairly.”[xxxii] An unusual coalition formed around the president’s initiative, including Democrats Richard Gephardt and Dan Rostenkowski in the House and Budget Chairman Pete Domenici and Democrat Bill Bradley in the Senate. A bipartisan deal was ultimately struck with Reagan agreeing to close existing tax loopholes if the Democrats would agree to lower marginal rates for individuals and families.

Reagan was deadly serious about the measure. In mid-December 1985, for example, he made an unusual personal visit to Capitol Hill to lobby members of Congress for his tax reform. A few days later, he telephoned House Speaker O’Neill to report that he had rounded up at least fifty Republican votes for final passage of the legislation. O’Neill had set the 50-vote requirement for bringing the bill to the floor.

Describing his plan as a “Second American Revolution,” Reagan promised that it would make taxes lower, fairer, simpler, and more productive. And it did, lowering the top marginal rate from 50 percent to 33 percent, simplifying the number of tax brackets, and increasing personal deductions so much that an estimated 4.3 million low-income families were removed from the tax rolls. At the same time, a minimum tax was established to ensure that wealthy taxpayers would not escape paying at least some income tax. And hundreds of special interest provisions, such as deductible “three martini luncheons,” were eliminated.

Reagan described his tax reform initiative as one of the proudest achievements of his administration. He called his tax reform act “the best anti-poverty bill, the best pro-family measure and the best job-creation program ever to come out of the Congress of the United States.”[xxxiii]

However, whichever way he tacked, Reagan often found himself being roundly criticized by leaders of the New Right, eager as always to find fault with a conservative for not being quite conservative enough. Richard Viguerie and others pointed out that regardless of Reagan’s successful battles to reduce income tax rates, the average American’s total tax payments had actually gone up in Reagan’s second year if you included increases in Social Security withholding. As for Reagan’s spending cuts, the New Rightists stressed, they were not absolute reductions but merely reductions in the rate of increase.

“We constantly hear nonsense about how conservatives are running everything,” remarked Terry Dolan, head of the National Conservative Political Action Committee (NCPAC). “If that were true, we wouldn’t have the biggest budget deficits in history.”[xxxiv]

Ronald Wilson Reagan Part 95 B (How to get out of recession, Obama should note Reagan’s path)

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President and Nancy Reagan with Prince Charles and Princess Diana in the Yellow Oval room. 11/9/85.

Ronald Reagan – The Presidential Years Part 1 of 4

Larry Elder makes some excellent points in his article, “Economy: Reagan Gets No Credit, Obama Gets No Blame”:

Ronald Reagan did nothing. Barack Obama saved the nation from total collapse.

How else to explain the absence of jobless pitchfork-wielding Americans storming the White House? How else to explain the contrast between the explosive Reagan Recovery and the dud on our hands right now? Fortunately, the left is up to the task.

“The secret of the long climb after 1982 was the economic plunge that preceded it. By the end of 1982 the U.S. economy was deeply depressed, with the worst unemployment rate since the Great Depression. So there was plenty of room to grow before the economy returned to anything like full employment,” said left-wing economist, Nobel laureate and New York Times columnist Paul Krugman in 2004. Oh.

An economy that is “deeply depressed,” Krugman insists, or at least he did seven years ago, naturally comes back strong. To what principal factor did Krugman point to in calling the 1982 economy “deeply depressed”? Unemployment. It peaked in the early ’80s at 10.8 percent, even higher than during “The Great Recession” (aka the economy “inherited” by President Barack Obama). In 2010, the unemployment rate hit 10.2 percent, which means the early ’80s still holds the record for the “worst unemployment rate since the Great Depression.”

What most people care about are jobs. By that standard, Reagan faced an even tougher economy. Throw in a higher rate of inflation — 1980’s 13.5 percent average vs. 2011’s 2.6 percent — and much higher prime interest rates — 20 percent vs. 3.25 percent — and the early ’80s looked even grimmer than The Great Recession.

Krugman gives no credit to the Reagan policies of lower taxes, deregulation and a slowdown in the rate of government spending. He believes Reagan’s policies (SET ITAL) harmed (END ITAL) the economy. Krugman approvingly quotes Bill Clinton, who, as a presidential candidate, said: “The Reagan-Bush years have exalted private gain over public obligation, special interests over the common good, wealth and fame over work and family. The 1980s ushered in a Gilded Age of greed and selfishness, of irresponsibility and excess, and of neglect.”

Enter President Barack “Hope and Change” Obama, with a Democratic majority in the House and a supermajority filibuster-proof Senate. Out went policies like reductions in income taxes, corporate taxes, capital gains and dividends. In came transfers of money from one pocket to another to “spread the wealth.”

Under ObamaCare, the Democrats placed the entire health care system under the command and control of the federal government. Through a nearly $1 billion “stimulus” package, Democrats spent money on “shovel-ready” projects with a promise to “save or create” 3.5 million jobs. To rein in “greed” and to fight “climate change,” the Obama administration imposed billions of dollars’ worth of new regulations on businesses. Through “quantitative easting,” the Federal Reserve effectively printed money to keep interest rates low, a widely disputed policy designed to encourage banks to lend and businesses to borrow.

So where is it? When do we see the massive bounce-back from this “deeply depressed” economy, at minimum the kind of bounce-back that occurred in the ’80s in spite of the allegedly harmful policies of Reagan?

Krugman’s analysis of the Reagan recovery — a deep recession equals sharp recovery — tells us that the economy should be storming ahead, especially given Obama’s enlightened leadership. But in the seven quarters following the end of this recession, gross domestic product growth has averaged 2.8 percent. In the seven quarters following the Reagan recession, GDP growth averaged 7.1 percent.

Forecasters are now lowering expectations for economic growth. Ominously, “core inflation,” which excludes “volatile” categories of food and fuel, is up. Unemployment, after dipping below 9 percent, is now back to 9.1 percent.

So how does the left explain this?

“This was a (SET ITAL) financial (END ITAL) (emphasis added) crisis,” explains Robert Shapiro, a Clinton administration economist, “and these take longer to recover from.” Does this explain why last spring the Obama administration confidently predicted a “Recovery Summer”? Does this explain why the Obama economic team predicted that the 2009 passage of “stimulus” would prevent unemployment, then at 7 percent, from reaching 8 percent? Krugman, of course, in refusing to credit Reagan policies for the Reagan Recovery, made no distinction between a “financial” and a regular old crisis.

It’s flat-out tough to explain how anti-Reagan policies are supposed to produce Reagan-like growth.

Here’s the real explanation. The top priority of the left isn’t “jobs, jobs, jobs.” Andy Stern, the former head of the Service Employees International Union and hero to the left, makes this clear: “Western Europe, as much as we used to make fun of it, has made different trade-offs which may have ended with a little more unemployment but a lot more equality.”

The goal of the leftist is social justice — using government to close the gap between the have and the have-nots, to secure the “right” to health care. Obama’s policies are therefore an acceptable trade-off even though they kill jobs — as long as it’s somebody else’s job that gets killed.

 

Ronald Wilson Reagan (Part 95)

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President Reagan speaking at a Take Pride in America event with actors Clint Eastwood and Louis Gossett Jr. in the Rose Garden. 7/21/87

7:52 PM EDT on November 6, 1984 from ABC7 WLS-TV Chicago
ABC News – The 84 Vote
Peter Jennings, David Brinkley, Barbara Walters, Tom Wicker – The New York Times, George Will – ABC News

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the eighth portion:

“People are policy,” Ed Feulner of the Heritage Foundation has often remarked, and nowhere was this more true than in the Reagan administration. There was a constant struggle between the Reaganauts who wanted to transform the government and the pragmatists who were content with change at the margin. Between them was the president himself, who sometimes aligned himself with the Reaganauts and sometimes with the pragmatists, instinctively seeking a golden mean between the two camps. He was willing to accept less than 100 percent if that was all he could get and if the agreement moved him toward his basic goal of minimizing government and maximizing individual freedom. As he once said of his landmark welfare reforms in California, “If I can get seventy percent of what I want from a legislature controlled by the opposition, I’ll take my chances on getting the other thirty when they see how well it works.”[xxix]

Sometimes Reagan went along with a pragamatist like chief of staff James Baker, who persuaded the president to accept the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), which turned out to be the great tax increase of 1982 — $98 billion over the next three years. That was too much for eighty-nine House Republicans (including second-term Congressman Newt Gingrich of Georgia) or for prominent conservative organizations from the American Conservative Union like the Conservative Caucus and the U.S. Chamber of Commerce, which all opposed the measure.

Baker assured his boss that Congress would approve three dollars in spending cuts for every dollar of tax increase. To Reagan, TEFRA looked like a pretty good “70 percent” deal. But Congress wound up cutting less than twenty-seven cents for every new tax dollar. What had seemed to be an acceptable 70-30 compromise turned out to be a 30-70 surrender. Ed Meese described TEFRA as “the greatest domestic error of the Reagan administration,” although it did leave untouched the individual tax rate reductions approved the previous year. (TEFRA was built on a series of business and excise taxes plus the removal of business tax deductions.)[xxx]

The basic problem was that Reagan believed, as Lyn Nofziger put it, that members of Congress “wouldn’t lie to him when he should have known better.”[xxxi] As a result of TEFRA, Reagan learned to “trust but verify,” whether he was dealing with a Speaker of the House or a president of the Soviet Union.

Ronald Wilson Reagan (Part 94)

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President Reagan attending the Bob Hope Salute to the United States Air Force 40th Anniversary celebration with Kirk Cameron, Phyllis Diller, Lucille Ball and Emmanuel Lewis at Pope Air Force base in Fayetteville, North Carolina. 5/10/87

7:40 PM EDT on November 6, 1984 from ABC7 WLS-TV Chicago.
ABC News – The 84 Vote
Peter Jennings, David Brinkley, Bert Lance – Georgia Dem State Chairman

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the seventh portion:

There is no denying that American indebtedness increased significantly during the Reagan years. Reagan borrowed $1 for every $5 he spent, increasing the national debt by $1.5 trillion through 1988. He didn’t have to worry too much about where to get the money — America was still such a good credit risk that people around the world “pressed money on us, and we obliged, borrowing easily, quickly, and almost guiltlessly,” in Cannon’s words, [xxi] But Reagan did feel guilty about the accumulated debt or as much as anyone with his unassailable optimism could feel guilty. He admitted that his failures to cut federal spending absolutely and to balance the federal budget were his “biggest disappointments” as president.[xxii]

But it is a little-remembered fact, as Cato Institute economist Stephen Moore has emphasized, that by the end of the Reagan era, the federal deficit as a share of gross domestic product was falling, and rapidly — from 6 percent in 1985 to 3 percent in 1989. As Reagan left office, the Democrat-controlled Congressional Budget Office projected that “deficits were on a path to fall to about one percent of GDP by 1993,” without any action by future presidents.[xxiii]

Reagan never ignored the deficit — he just had more important things on his mind. As he said in 1981, “I did not come here to balance the budget — not at the expense of my tax-cutting program and my defense program.”[xxiv] Still, every budget he submitted to Congress outlined spending reductions which would have reduced the cumulative deficit during the 1980s by several hundred billion dollars. But Congress nullified this possibility with a succession of “continuing resolutions” that enabled the government to keep operating and keep spending at the same level.

The persistent deficits did, however, have an unintended impact on Congress, which for the first time in the post-war era began to “impose limits on the growth of government.” Of all the measures we know, Milton Friedman wrote, “the deficit has been the only effective restraint on congressional spending.”[xxv]

President Reagan devoted most of his time in the spring and early summer of 1981 (after he had recovered from the March 30th shooting by would-be assassin John Hinckley) building a consensus for his economic recovery program. Time’s Lawrence Barrett described the president’s strategy as initial “seduction” followed by a “blitzkreig.”[xxvi] Reagan began by showing the Washington establishment that he was not a dangerous man or a “political freak.” He had drinks with House Speaker Tip O’Neill, a meeting with Senator Edward Kennedy, and a chat with publisher Katharine Graham of the Washington Post. Quite a charmer, they agreed, but certainly no real threat to the way Washington works.

O’Neill was so deceived that he condescendingly offered some advice to the new fellow in town: “You were governor of a state,” he told Reagan, “but a governor plays in the minor leagues. Now you’re in the big leagues. Things might not move as quickly as you would like.” Just eight months later, the House of Representatives passed Reagan’s economic recovery plan by 238-195, with the cross-over help of forty-eight Democrats who didn’t mind going against their Speaker when it was in the best interests of their constituents.

Reagan called Congress’s passage of the bill “the greatest political victory in half a century.” Jubilant conservatives described it as a “new economic beginning.” David Broder of the Washington Post proclaimed Reagan’s tax victory as “one of the most remarkable demonstrations of presidential leadership in modern history.”[xxvii] The $162 billion tax cut dwarfed any previous one in the postwar period — Ford’s $22.8 billion reduction in 1975 was a distant second.

The cuts in personal income taxes “had a permanency unlike that of any [previous] tax bill” because of the indexing provision. In the past, individuals were pushed into higher tax brackets whenever their income rose along with inflation. ERTA did away with “bracket creep” and prevented political leaders from “solving” fiscal deficits by waiting for inflation to increase revenues each year. From now on, Congress had to pass and the president had to sign any tax increase out in the open. How to collect government revenues “became the dominating political issue of the 1980s.”[xxviii]

Ronald Wilson Reagan (Part 93)

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President Reagan and Bob Hope performing at the Bob Hope Salute to the United Sates Air Force 40th Anniversary Celebration at the Pope Air Force Base in Fayetteville, North Carolina. 5/10/87.

the first presidential debate between Ronald Reagan and Walter Mondale in 1984

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the sixth portion:

Five principles guided the Reagan budget cuts: The growth of government should be curbed; federal benefits should be focused primarily on the poor; benefits should be contingent on an individual’s effort to leave welfare; decisions on social programs should be returned to the states and localities; and finally, programs that don’t work should be eliminated. At the heart of all these principles was a simple proposition: entitlements as the “underlying principle of American social policy” should be replaced by “benefits contingent on responsible behavior.”[xvii]

But in practice these principles were sometimes shunted aside — as in the case of the politically popular Medicare program. The “most serious policy error of the Reagan administration,” conservative analyst Ronald F. Docksai asserted, was its support for the expansion of Medicare to provide catastrophic acute care protection for the elderly. Reagan believed, correctly, that senior citizens should not be impoverished by a serious or persistent illness. But instead of seeking legislation to give private insurance companies an incentive to offer catastrophic hospital and long-term care insurance, the president was “persuaded by administration officials and Republican lawmakers” to endorse an expansion of Medicare and the federal government. Conservative congressmen who favored a private-sector approach to provide quality care and constrain federal spending were undercut by the White House and labeled “anti-elderly” by liberal Democrats.[xviii]

Reagan’s personal feelings about Social Security had not changed since his 1964 televised address for Barry Goldwater when he had suggested the introduction of “voluntary features” into the system so that “those who can make better provisions for themselves” be allowed to do so.[xix] But he had come to accept, reluctantly, that Social Security was an issue that Republicans could not touch without getting badly burned. Two months into his presidency, biographer Lou Cannon wrote, the White House was given a congressional initiative that would have sharply slowed the growth of Social Security and reduced the budget deficit. The device was a freeze or severe reduction in automatic cost-of-living allowances (COLAs), which had increased Social Security payments so much that the program now accounted for 21 percent of the total budget.

Reagan was tempted, but as he told Senator Peter Domenici of New Mexico, the author of the amendment and chairman of the Senate Budget Committee, “I made a commitment during the campaign not to cut Social Security, and … I don’t want to go back on my word.”[xx] Other senators, including John Tower and William Armstrong of Colorado, endorsed Domenici’s approach, but Reagan would not be moved. And regardless of the modest bipartisan support in the Senate, liberal House Democrats would have relished an opportunity to charge that Republicans were once again trying to reduce the size of the monthly Social Security checks on which millions of senior Americans depended.

Bill Clinton with Ronald Wilson Reagan (Part 92)

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President Reagan, Nancy Reagan, Bill Clinton and Hillary Clinton attending the Dinner Honoring the Nation’s Governors. 2/22/87.

ronald reagan debates walter mondale in 1984 Presidential race second clip

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the fifth portion:

Though Reagan promised deep cuts in domestic spending, that did not turn out to be the case. Indeed, overall welfare spending increased during the Reagan presidency — primarily because Reagan could not overcome, even with vetoes and the bully pulpit of the White House, the spending impulses of Congress, which, after all, signed the checks. Throughout his two terms, he was confronted by Democrats still enthralled by the New Deal as well as Republicans (particularly in the Senate) still mesmerized by its political appeal.

When the administration proposed to abolish the Department of Education in 1981, Howard Baker, the first Republican Senate majority leader since 1954, actively opposed abolition.[x] Baker wanted to remain majority leader and was worried that getting rid of the department would alienate too many voters.

Reagan was not discouraged. He understood he had to proceed prudently with cuts, one billion dollars at a time — he could not just pull the plug on the federal government. Over the past fifty years, millions of people had grown dependent upon it.

Many people remember Reagan saying in his inaugural address that “government is not the solution to our problems; government is the problem.” But the new president also said:

It is not my intention to do away with government. It is rather to make it work — work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.[xi]

Here was no radical libertarian with a copy of Atlas Shrugged in his back pocket but a traditional conservative guided by the prudential arguments of The Federalist. Reagan was a modern federalist, echoing James Madison’s call for a balance between the authority of the national and state governments. He also shared Madison’s concern about “the abridgement of the freedom of the people” by the “gradual and silent encroachment of those in power.” As he later said in his 1990 autobiography, “We had strayed a great distance from our founding fathers’ vision of America.”[xii]

He was determined to recapture that lost vision. As he stated in his inaugural, he would begin by seeking to “curb the size and influence of the federal establishment.” Revealing his pragmatism, his immediate target was the welfare excesses of Lyndon B. Johnson, not the long-established social programs of Franklin D. Roosevelt. As he wrote in his diary in January 1982, “The press is trying to paint me as trying to undo the New Deal. I’m trying to undo the Great Society.”[xiii]

It was a slow uneven process, always made more difficult by a Democratic House of Representatives. He was obliged to allow federal spending for welfare — work programs, education and training, social services, medicine, food and housing — to rise sharply; expenditures almost doubled from $106.1 billion (in real or nominal dollars) in 1980 to $173 billion in 1988.[xiv] Nor did Reagan’s own cabinet secretaries protest when the increases benefited their agency or department.

Conservative critics like the Heritage Foundation’s Stuart Butler did not try to hide their disappointment and frustration. Six years into the Reagan presidency, Butler wrote that “the basic structure of the Great Society is still firmly intact …. virtually no program has been eliminated.”[xv]

But Reagan reduced federal outlays in some welfare areas — such as regional development, commerce and housing credit — from $63 billion in 1980 to just over $49 billion in 1987, a decrease of about 22 percent. And the size of the federal civilian work force declined by about five percent, much of it traceable to conservatives like Gerald Carmen at GSA, Raymond Donovan at Labor and the OPM’s Donald Devine, described by the Washington Post as “Reagan’s terrible swift sword of the civil service.”[xvi] The agencies that led the personnel downsizing were Education, down twenty-four percent; Housing and Urban Development, down twenty-two percent; Office of Personnel Management, down nineteen percent; and Government Services Administration and Labor, both down fifteen percent.