An American Life

by Ronald Reagan

  A second debate—covering foreign affairs—was scheduled in two weeks in Kansas City, so I had a second chance; another disastrous performance could send Nancy and me packing, headed back to the ranch for good.

  I decided I wasn’t going to do as much cramming as I had done before the first debate, and it’s a good thing I didn’t, because something happened at the second debate that I think wouldn’t have happened if I had been overtrained. One of the reporters on the panel asked me whether age was going to be a handicap or other factor in the campaign. I suppose it was a polite way of raising the fact that I was seventy-three; and the question alluded, by inference, to my troubles at the previous debate.

  My answer to the question just popped off the top of my head. I’d never anticipated it, nor had I thought in advance what my answer might be to such a question. I just said, “I am not going to exploit for political purposes my opponent’s youth and inexperience.”

  Well, the crowd roared and the television cameras flashed a shot of Mondale laughing. I’m sure that if I had been as stuffed with as many facts and figures as I was before the first debate, I wouldn’t have been able to come up with that line; your mind just isn’t flexible enough if it’s saturated with facts because you’ve been preparing for an examination.

  According to the count of some reporters, Mondale took twenty-two tough personal potshots at me during the debate in Kansas City, most of which questioned my capabilities for leadership. But the majority of people watching the debate that night, the reporters wrote, remembered that one line more than any other: I guess my response had satisfied them that I wasn’t senile. After my goofs during the previous debate, I think it’s possible I sewed up reelection with those fourteen words; I’m not sure. But the incident reminded me once again of how unpredictable, even fleeting things can often make a big difference in life.

  Besides the debates, two other things stand out in my memory from the 1984 campaign. One was the enthusiasm of the blue-collar workers—voters traditionally allied with my former associates in the Democratic Party—that I met while stumping the country that summer and fall. While Walter Mondale and Ted Kennedy and Tip O’Neill were forever harping that I was the “rich man’s candidate,” everywhere I went crowds of working men and working women roared with approval when I asked them whether they thought they were better off than they had been four years earlier; the country was moving again, and they were sharing in the fruits of the economic recovery.

  Another thing I will always remember: an outpouring of affection and support from college and university students I never expected. Although there were always a few hecklers on the campuses I visited, they were usually outnumbered by students enthusiastically cheering the policies of the previous four years, and this really took me by surprise: These students in the eighties seemed so different from those that I’d dealt with as governor a decade earlier.

  Two days after the Kansas City debate, following a busy schedule of campaigning that began at the University of Oregon and ended with a giant rally on the campus of Ohio State University, I wrote in the diary: “The O.S.U. students were on fire; another small heckler group only added to the fun. By this time I was so in love with young America I was all choked up. For lunch we went to the T.K.E. house, my fraternity. These have been the greatest four days I can remember.”

  As election day approached, our campaign polls showed that following the second debate I had increased my lead over Mondale substantially. But I was still edgy. What happens, I thought, if my supporters read the polls and decide their vote isn’t necessary? I kept pressure on the staff, telling them to work me hard and add as many appearances to the campaign schedule as they could before election day.

  Two days before the election, after getting up in Milwaukee and flying to rallies in Minnesota, Missouri, and Chicago, we arrived in Sacramento for a rally the following day. Nancy and I were put up in a suite at the Red Lion Inn that had a bed on an elevated platform. About 3:30 A.M., Nancy got up to get an extra blanket and took a header off the platform that left her with an egg-size lump on the left side of her head.

  In the morning, she could hardly walk and I was very frightened for her, but a doctor who saw her said the injury, while painful, would not leave any lasting damage. Still worried, I resumed the campaign schedule. That day I felt a twinge of nostalgia as I spoke as president before a huge crowd that gathered on the steps of the state capitol—the same place where twice I’d been sworn in as governor.

  From there, we flew to Southern California for some final campaigning and then our traditional election-night party at the Jorgensen home to await the voters’ verdict. Nancy was still badly bruised but feeling better.

  While we were having dinner, I was called to the telephone. It was Walter Mondale, conceding.

  The next day, with Nancy still sore from her fall, we flew to Rancho del Cielo for three days of rides in the morning and cutting and splitting wood from downed oak trees in the afternoons. It was a happy time. I was feeling high after the election; we had taken forty-nine states and fifty-nine percent of the vote, and I saw the election as approval of what I’d been trying to do and a mandate to continue it.

  In the rotunda of the Capitol on a very cold day ten weeks later, I pledged to do that. George Bush and I first took our oaths of office, as required by the Constitution, on Sunday, January 20, in the White House. The formal inaugural ceremonies and parade were scheduled the following day. But on Sunday afternoon, the inaugural committee came to the White House and suggested I cancel the parade and outdoor ceremony because the wind-chill factor the next day was predicted to be twenty degrees below zero or worse; doctors were warning that at that temperature, exposed skin would freeze in about fifteen seconds. We couldn’t inflict that on the bandsmen and other people who had come to Washington for the parade, so we canceled it, and just before noon the following day, George and I took our oaths of office a second time before about one thousand people in the Capitol rotunda.

  Afterward, at the traditional inaugural lunch with congressmen, Tip O’Neill made a point of telling me privately that he was very much aware of the fact that we had received fifty-nine percent of the vote during the election. I hoped that was a signal he’d be more agreeable the second time around, but it didn’t work out that way. As far as he was concerned, it still wasn’t six o’clock.

  I felt sorry for all those bandsmen who had come to Washington from the fifty states and were deprived by cold weather of a chance to participate in the inaugural parade, so that afternoon Nancy and I helicoptered to a big arena in Maryland where thousands of disappointed paraders from all over the nation were gathered in their uniforms and regalia. I got a chance to thank them and they got a chance to play some of the music they’d planned for the parade. We all had fun, and I think it made up for some of their disappointment.

  That night, there were eleven inaugural balls. Nancy and I got to all of them and danced a few steps at each.

  The next day, January 22, it was back to work. On the economic front, my biggest goal for the second term was to make the federal tax code less complicated and less onerous on the Americans who were the real producers in our economy. Tax reform, I thought, would not only accelerate the economic expansion but make our whole system of taxation more fair.

  In 1986, after almost two years of haggling with Congress, we got the tax reform bill we wanted.

  52

  A NUMBER OF THINGS that happened during my watch as president gave me great satisfaction, but I’m probably proudest about the economy. In 1981, no problem the country faced was more serious than the economic crisis—not even the need to modernize our armed forces—because without a recovery, we couldn’t afford to do the things necessary to make the country strong again or make a serious effort to lessen the dangers of nuclear war. Nor could America regain confidence in itself and stand tall once again. Nothing was possible unless we made the economy sound again.

  The economic expansion that began
in October 1982, a year after the first phase of the three-year tax cut went into effect, created more than eighteen million new jobs by the time I left office, the largest increase for a comparable period of time in history. Meanwhile, the percentage of Americans employed at good jobs rose to an all-time high. As I write this, the expansion is in its ninety-second month and still going strong.

  The twenty-five-percent tax cut, followed by the Tax Reform Act of 1986, touched off a surge of growth in America that brought down inflation, brought down interest rates, brought down unemployment, and created a cascade of additional tax revenue for government. Realizing that they could keep more of what they earned, people went out and made more money. They used this money to buy more houses, more furniture, more appliances, more cars.

  Corporate as well as personal taxes were simplified and reduced to the lowest rate since 1941. Businesses began investing more in plants and equipment, making their workers more competitive. And instead of throwing money into wasteful shelters and tax dodges, individuals and businesses began putting it into productive investments that created growth and new jobs.

  Although it didn’t bring as much simplification to the tax code as I had hoped, the Tax Reform Act of 1986 reduced the number of personal income tax brackets from fourteen to three, and lowered the top personal tax bracket (which had been seventy percent in 1981) for most Americans to twenty-eight percent, the lowest rate since 1931.

  Knowing they could now keep seventy percent of what they earned instead of paying seventy percent of it to the government, the most affluent Americans invested in new projects and new ideas; but contrary to what some of the tax-and-spend liberals have said, tax reform didn’t create a windfall for the rich at the expense of the poor; instead, it was the other way around.

  Under the new laws, more than eighty percent of Americans paid the lowest tax rate, fifteen percent, or no tax at all; the households of four million lower-income working Americans were excused from paying federal income taxes altogether. Meanwhile, the proportion of personal income taxes paid by the top-earning one percent of Americans increased by more than a third between 1981 and 1987—from 17.9 percent to almost twenty-five percent. During the same period, the tax burden on the poorest half of American taxpayers fell by almost twenty percent—from 7.4 percent of the total to 6.1 percent. More than eighty percent of the increased personal income tax revenues since 1981 have come from taxpayers with incomes of over $100,000 a year, while the amount paid by those earning less than $50,000 dropped by billions of dollars.

  By and large, the jobs created during the expansion were good jobs: more than ninety percent were full-time jobs; more than half paid salaries of over $20,000, and a large proportion of these were in managerial and professional occupations with a median income of more than $27,000. Many of the best of the new jobs went to women and minorities. During those six years, the median income for American families increased twelve percent, compared with a decline of 10.5 percent during the previous decade. The nation’s real gross national product (the value of all goods and services produced in the United States, adjusted for inflation) went up twenty-seven percent; manufacturing production went up thirty-three percent. American workers became more productive each hour they worked and made their employers more competitive in world markets.

  We got government out of the way and began the process of giving the economy back to the people, but I don’t take credit: The American people did it themselves, responding to incentives inherent in the free enterprise system. I watched in wonder and awe as they responded and excelled and produced. There is no limit to what a proud, free people can achieve.

  With the tax cuts of 1981 and the Tax Reform Act of 1986, I’d accomplished a lot of what I’d come to Washington to do.

  But, on the other side of the ledger, cutting federal spending and balancing the budget, I was less successful than I wanted to be. This was one of my biggest disappointments as president. I just didn’t deliver as much to the people as I’d promised.

  I never thought we could cut costs so fast that we’d balance the budget overnight. I knew it would take time. There were too many programs that people based their lives and businesses on; you couldn’t pull the rug out from under all of them at once. But I wanted to cut more of the waste that had accumulated in government like flab around the waist of a middle-aged man.

  I didn’t come to Washington with stars in my eyes, thinking it would be easy. I’d been through the same kind of battle at the state level and knew how difficult it could be. I came to Washington thinking that it was going to be tough, but that it could be done.

  Over time, we rendered a lot of fat out of the government; we reduced the size of the bureaucracy and cut the rate at which the government was growing and spending money, and I’m very proud of that. But the vested interests that hold sway over Congress prevented us from cutting spending nearly as much as I had hoped to, or as the country required.

  I’d argued for years that if you cut tax rates, government revenues would go up because lower rates would stimulate economic growth. Well, in the first six years after tax rates started coming down in late 1981, the federal government, despite the lower rates, experienced an increase of $375 billion in tax revenues—more than four times greater than the amount projected before the cuts. This was more than enough to pay for our $140 billion military buildup. But, during this same period, Congress increased spending by $450 billion. So, we lost our chance to slash the deficit.

  Deficits, as I’ve often said, aren’t caused by too little taxing, they are caused by too much spending. Presidents don’t create deficits, Congress does. Presidents can’t appropriate a dollar of taxpayers’ money; only congressmen can—and Congress is susceptible to all sorts of influences that have nothing to do with good government.

  Presidents can propose a budget, lobby to get it passed, and do their best to make sure that government agencies under their control within the executive branch don’t waste the money appropriated by Congress. They can veto spending bills passed by Congress. But under our system of separation of powers, it is Congress that determines the programs government finances and how much money is appropriated for each of them.

  Spending for government “entitlement” programs—money committed by Congress for various programs in past years that is as good as spent before the administration ever gets a shot at writing its budget—accounts for forty-eight percent of federal spending. To many members of Congress, this money is off-limits forever: Once a program gets started, it’s virtually impossible to reduce or stop it. Every one of these programs—most of which were born or expanded enormously during the explosive growth of big government in the 1960s and 1970s—develops a powerful constituency in Congress, and a bureaucracy that is dedicated to preserving it. As I once said in a speech, the tendency of government and its programs to grow are about the nearest thing to eternal life we’ll ever see on this earth.

  Presidents can try to rein in spending through their powers of persuasion, but aside from jawboning members of Congress and taking their case to the people, their running room is limited. Over the years, the majority party in Congress (for fifty-five of the last fifty-nine years the Democrats) has devised a bag of tricks that can be very effective in foiling efforts by the executive branch to contain spending. Congress may write a vital piece of legislation, then tack on a pork-barrel rider that throws billions at the pet project of a narrow special-interest group, knowing the president may be forced to accept something he doesn’t want in order to save something he does.

  Congress has the power to prevent even as basic a thing as the adoption of a budget for the federal government, and it does so routinely almost every year. Every budget I submitted to Congress outlined spending reductions; if I’d gotten cuts I proposed in 1981, for example, the cumulative deficit between 1982 and 1986 would have been $207 billion less than it was. But I could never get a complete budget passed. Instead, we got a succession of “continuing resolutions” th
at allowed the government to stay in business and keep on spending money without a formal budget. Meanwhile, Congress, posturing and playing cynical games with the truth, blamed the White House for the deficit, and at the same time slipped costly gifts for special interests into these makeshift spending resolutions, preventing any real progress in cutting the deficit.

  When one of these spending resolutions would go through Congress, it would be a foot thick and fourteen hundred pages long. (I once sprained a finger picking up one of these hefty budget resolutions.) I don’t believe any congressman on Capitol Hill ever reads all those fourteen hundred pages. The press, which tries to keep an eye on everything in Washington, seldom digs deeply into the process. Yet there are things contained in these budget resolutions that cost taxpayers billions.

  Congress put virtually every one of the budgets I drafted on the shelf and sent me a continuing resolution. If I had vetoed it, the government wouldn’t have been able to write a paycheck or a Social Security check. The whole government might have ground to a halt, and the baby would have gone out with the bath water. So, they’d have me. I’d have to sign the next continuing resolution and, as a result, I never got the things we were asking for with regard to major cuts in spending and I wasn’t able to persuade Congress to balance the budget.

  I don’t think we’ll solve the problem of the deficit until three things happen: We need more discipline on spending in Congress. We need a constitutional amendment requiring Congress to balance the budget. And we need to give our presidents a line-item veto.

  I think the first American to favor a balanced-federal-budget amendment was the founder of the Democratic Party, Thomas Jefferson. After the Constitutional Convention was over and the Constitution was approved, signed, and ratified, he pointed out a glaring omission: There was no provision to prevent the federal government from borrowing money and going into debt. Times haven’t changed; that’s still a glaring omission in the Constitution.