Tag Archives: fiscal responsibility act

Reagan’s 1982 tax increase mentioned during the Republican debate of October 11, 2011 with video clip

Reagan’s statement concerning 1982 tax increase is responded to by Republican Candidates in this clip below:

Washington Could Learn a Lot from a Drug Addict

Concerning spending cuts Reagan believed, that members of Congress “wouldn’t lie to him when he should have known better.” However, can you believe a drug addict when he tells you he is not ever going to do his habit again? Congress is addicted to spending too much money.  Lee Edwards wrote in his article “Golden Years” about Ronald Reagan:

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.

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Rick Perry’s answer in Republican debate of October 11, 2011 (with video clip)

I really like Rick Perry because he was right when he called Social Security a “Ponzi Scheme” which it is. How did he do in the last debate? You be the judge by watching his response above. Rick Perry’s Moment Posted by Roger Pilon Last night POLITICO Arena asked: Who won the Reagan debate? My […]

Romney attacked in Republican debate of October 11, 2011 (with video clip)

I am not too pleased with Mitt Romney and the article below shows one good reason to oppose him. Can Mitt Romney Escape His Romneycare Albatross? by Doug Bandow Doug Bandow is a senior fellow at the Cato Institute. A former special assistant to Ronald Reagan, he is the author of Foreign Follies: America’s New […]

Reagan’s 1982 tax increase mentioned during the Republican debate of October 11, 2011 with video clip

Reagan’s statement concerning 1982 tax increase is responded to by Republican Candidates in this clip below: Washington Could Learn a Lot from a Drug Addict Concerning spending cuts Reagan believed, that members of Congress “wouldn’t lie to him when he should have known better.” However, can you believe a drug addict when he tells you […]

Cain’s 9-9-9 plan center stage at Republican debate of October 11, 2011 (with video clip)

Herman Cain’s 9-9-9 plan did steal the show at the Republican debate of October 11, 2011. Take a look at this article below: The Republican presidential debate in Hanover, N.H. (AP) There was one clear winner from Tuesday’s Republican presidential debate, based on the simple metrics of name recognition: businessman Herman Cain’s “9-9-9 Plan.” Virtually […]

Ron Paul speaking at Values Voter Summit

Ron Paul speaking at Values Voter Summit In this speech above Ron Paul repeats his view that we should not have a Dept of Education and the article below does the same thing. Beating Back Big (Ed.) Brother? Posted by Neal McCluskey It certainly seems quixotic to try to reverse the federal invasion of American […]

Mitt Romney’s religion is becoming an issue

This issue concerning Mitt Romney’s religion is heating up. Baptist pastor taken to task Russ Jones and Chad Groening – OneNewsNow – 10/10/2011 11:05:00 am Popular radio and television commentator Glenn Beck wrapped up the Values Voter Summit in Washington, DC, Sunday in a wave of anti-Mormonism comments lodged towards GOP presidential hopeful Mitt Romney.   […]

Will the Republicans embrace an agenda that will get our country back on tract?

Will the Republicans embrace an agenda that will get our country back on tract? Republicans need to cut spending as the video above says. I wish the Republican candidates for president will embrace these policy positions: A Republican Agenda for Real Change by Doug Bandow This article appeared in Forbes on October 3, 2011 The desperate search […]

Lt Gov. Mark Darr endorses Romney

I think that many evangelical Christians may have a problem with supporting Mitt Romney who is a Mormon. I think that Romney is a very good speaker and will beat President Obama easily. He is not my favorite candidate though. John Brummett rightly noted that this endorsement by Lt. Governor was sought after by Romney […]

Ron Paul, Rick Perry and Mitt Romney have the money coming in

I really like Ron Paul and Rick Perry. Only three Republican presidential candidates are worth any money _ campaign money, that is. Mitt Romney, Rick Perry and Ron Paul have banked millions. But the other GOP candidates are struggling or broke, putting their candidacies in question four months before the first nominating contests take place. […]

Rick Perry says Social Security is a Ponzi scheme

Rick Perry says Social Security is a Ponzi scheme Rick Perry and Mitt Romney went after each other at the debate over this term “Ponzi scheme.” Over and over Rick Perry has said that Social Security is a Ponzi scheme and I agree with him. John Brummett asserted,”Rick Perry was last week’s savior, but then he […]

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Brummett:”Political dysfunction” caused by Fox News?

Washington Could Learn a Lot from a Drug Addict

Fox News is the number one by far because it does not take the liberal bias that everyone is sick of. However, liberals just can’t stand that Fox News has risen to the top.

John Brummett in his article Who to blame? Here’s the answer, August 1,  2011, Arkansas News Bureau observed:

People will try to tell you that all politicians are equally to blame for this political dysfunction by which our nation has flirted with downgraded credit, debt default and global economic turmoil.

They merely will be providing insulation for those really mostly to blame.

So let us peel away such insulation. Let us lay it out in order of blame:

1. Tea party extremists in the Congress, who are penny wise and pound foolish

2. Mainstream Republicans in the Congress, because they could have fallen in behind Speaker John Boehner’s twice-aborted adult discussions with President Obama. Instead they cowered and tucked tail as soon as the kook caucus on the right fringe invoked the specter of primary opposition from the strident extreme.

3. All of us in the great American apolitical center, “independents” who go one way in one election and the other in the next.

4. Fox News, because it exacerbates the above.

Why no blame for Democrats? I ran out of space. The strident leftists, moveon.org and the talking heads on MSNBC, would surely be coming up shortly.

I think that Brummett is looking at the wrong issue. The problem is overspending by Congress and we should be addressing that. I do think we have “political dysfunction” but I believe it is because the liberals in Congress are addicted to spending like a drug addict is addicted to his drugs. I think that his point number 3 is very good, but point number 4 is dead wrong. Fox News is doing everything they can to expose the liberals’ addiction to overspending which is the root of our problem.

In the clip above Reagan promises to cut the size of government, but look what Congress did to him a few years later.

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President Reagan got his tax-rate cuts through Congress later that year (1981).  But because they were being phased in gradually, the economic pain they were designed to alleviate lingered well into 1982. High deficits persisted, and he faced enormous pressure to raise taxes.

The president had no interest in increasing taxes, but he agreed to consider some kind of compromise with Congress. His representatives began meeting with members of House Speaker Tip O’Neill’s team to find some way to hammer out a deficit-reduction pact. So began what, in our opinion, became the “Debacle of 1982.”

From the outset, the basic idea of the GOP participants was to trade some kind of concessions on the tax front for a Democratic agreement on spending cutbacks. The negotiators knew that Ronald Reagan would be hard to sell on any tax hikes. So they included a ploy they felt might overcome his resistance: a large reduction in federal spending in return for a modest rise in business (but not individual) taxes.

The ratio in the final deal — the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) — was $3 in spending cuts for every $1 in tax increases. It sounded persuasive at the time. Believing it to be the only way to get spending under control, most of the president’s colleagues signed on. He disliked the tax hikes, of course, but he agreed to it as well.

The cuts never came

You don’t have to be a Washington veteran to predict what happened next. The tax increases were promptly enacted — Congress had no problem accepting that part of the deal — but the promised budget cuts never materialized. After the tax bill passed, some legislators of both parties even claimed that there had been no real commitment to the 3-to-1 ratio.

In fact, spending for fiscal year 1983 was some $48 billion higher than the budget targets, and no progress was made in lowering the deficit. Even tax receipts for that year went down — a lingering effect of the recession, which the additional business taxes did nothing to redress.

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Washington Could Learn a Lot from a Drug Addict because they are both addicted. A drug addict is addicted to his drugs and Washington is addicted to spending.