Ronald Reagan Hated Big Government Like a Rat Hates Cheese, Part 6: Federal Spending

 

Thus far, we have examined Reagan’s support for big government on issues where the pro-government position is generally considered right-wing (obscenity laws, State persecution of gay people, and the War on Drugs) or is difficult to classify on the political spectrum (conscription and the drinking age.) The final two posts in this blog series, however, will look at two areas in which conservatives are generally considered to be for small government. The first of these areas is spending. The Right is typically associated with support for lower levels of federal spending and balanced budgets.

Traditionally, Republicans tended to believe that tax levels had to be commensurate with spending levels. This belief dated back to Abraham Lincoln, imposing an income tax to help finance the Civil War. Republican presidents could certainly overspend, but they rarely created budget deficits by combining high spending with low taxes. Despite arguably supporting overly high spending, Eisenhower was able to achieve a balanced budget through maintaining high taxes on the wealthy. In 1963, with both domestic and military spending very high, most House Republicans rejected John F. Kennedy’s tax cuts. Richard Nixon, while certainly spendthrift, nonetheless submitted a balanced budget to Congress. (It was rejected.) This is not to say that high spending and taxes is a form of small government by any means. It is merely to point out that pre-Reagan Republicans mostly tried to avoid massive federal debt and deficits. In the 1970s, however, some fiscal conservatives developed a theory called “Starve the Beast.” This theory was that if taxes were cut, it would force the government to reduce spending, since they would be taking in less money. Additionally, it was believed that the economic boom caused by tax cuts would make some federal spending on public assistance programs unnecessary. In his September 21, 1980 debate with third party candidate, John Anderson, Reagan took this position, with Anderson representing traditional Republicanism. A ten-term Representative from Illinois, Anderson had begun his career as a staunch conservative but had drifted to the center as time went on. His candidacy drew much of its support from Republicans who thought that the party was becoming too conservative. While Anderson stated that he would like to sign on for Reagan’s proposed tax cuts, he maintained, “what I’m going to do is to bring federal spending under control first.” Reagan dismissed this idea thusly: “Now, John’s been in the Congress for 20 years. And John tells us that first, we’ve got to reduce spending before we can reduce taxes. Well, if you’ve got a kid that’s extravagant, you can lecture him all you want to about his extravagance. Or you can cut his allowance and achieve the same end much quicker.” Did Reagan prove this claim correct?

As many people admit, defense spending increased greatly under the Reagan Administration. From 1980 to 1985, for example, annual defense spending more than doubled. In a 1983 speech, Reagan stated, “Now, I know that this is a hard time to call for increased defense spending. It isn’t easy to ask American families who are already making sacrifices in the recession, or American businesses which are struggling to reinvest for the future, and it isn’t easy for someone like me who’s dedicated his entire political career to reducing government spending.” But call for an increase he did. This played an important role in buoying up overall federal spending. According to FactCheck.org, “total federal spending soared” in Reagan’s first term. In addition to defense spending, the tools necessary for the drug war came with a high price tag.  Reagan’s own budget director, former Congressman David Stockman (R-MI) resigned in disgust and published a book in 1986 eviscerating his old boss for not cutting spending along with taxes. Did Reagan’s tax cuts spur enough economic growth to prevent the national debt and budget deficits from ballooning? Far from it. The national debt went from a little under a trillion dollars to almost three trillion, and the debt ceiling was raised seventeen times, while the budget was never balanced. Conservatives often attribute these problems to liberal Democrats in Congress spending heavily on economic programs. And it is certainly true that domestic spending on the economic safety net was very high in the 1980s. But throughout his presidency, Reagan never submitted a balanced budget to Congress. Moreover, these defenders are ignoring the fact that their argument goes against what Reagan himself had claimed in the debate with Anderson. Remember, he had insisted that once taxes were cut, federal spending would decrease accordingly. His own record would prove him wrong.

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