Today is the 100th anniversary of the birth of Ronald Reagan, and it is being commemorated in so many places around the nation and in such a variety of ways as to suggest it is a national holiday in the making. That would be fitting, considering the many notable achievements of America’s 40th president. One of the lesser-known Reagan achievements was the remarkable degree to which he was able to reduce the size of federal spending, relative to the nation’s gross domestic product. The federal deficit in 1985, at the outset of Reagan’s second term, was 6 percent of GDP. By 1989, it was down to 3 percent, and the Congressional Budget Office projected that it would reach 1 percent within five years if then-current spending patterns continued.
But Reagan’s efforts to reduce federal spending were not an unmixed success, nor did they come about without a continuing series of titanic battles against the special interests who benefitted from the hundreds of Great Society programs put in place by LBJ in the 1960s. As historian and Examiner contributor Lee Edwards of the Heritage Foundation observed, Reagan wrote in his diary in 1982 that “the press is trying to paint me as trying to undo the New Deal. I’m trying to undo the Great Society.” When Reagan appeared to be succeeding, the special interests almost always found a way around his proposals. In the Tax Equity and Fiscal Responsibility Act of 1982, for example, (which inspired the preceding diary entry), Democrats in Congress promised to cut $3 in federal spending for every one dollar of tax increases Reagan accepted. In the end, though, Congress only cut 27 cents in spending for each dollar of increased taxes. Reagan never again accepted a pledge of spending cuts in exchange for tax hikes.
The same battle lines are forming today as Republicans claiming Reagan’s mantle move to reduce federal spending, regulation and debt, and Democrats gather their special interest allies to block them. Jonathan Karl and Matthew Jaffe of ABC News reported Friday, for example, that Senate Democrats convened a meeting last week with more than 400 lobbyists for programs funded by the Department of Health and Human Services. According to one of the ABC reporters’ sources, attendees “were reaching out to a vast number of organizations to build a coalition of people who are willing to take action against whatever may come out of the House.” A committee aide to Sen. Tom Harkin, D-Iowa, said everybody in the meeting agreed that “a higher [HHS] allocation improves the chances for every stakeholder group to receive more funding.” Just as in Reagan’s day, the special interests want more federal spending, not less. And it won’t be long before they insist that raising taxes is the only fair way to reduce the government’s $1.5 trillion annual budget deficit.