Restless Giant: The United States From Watergate to Bush v. Gore (26 page)

Explanations for the Democratic disaster understandably varied. Bill Moyers, a liberal who had been a top aide to Lyndon Johnson, observed: “We didn’t elect this guy [Reagan] because he knows how many barrels of oil are in Alaska. We elected him because we want to feel good.”
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Moyers had a point: A majority of Americans were obviously tired of Carter and hoped that the ever optimistic Reagan would deliver them from the dark days of the late 1970s. In this sense, the election resembled that of 1932, when voters had chosen the jauntily optimistic FDR over the incumbent, Herbert Hoover, the dour embodiment of hard times. Carter was the first incumbent president since Hoover to lose in a bid for reelection.

Many voters in 1980 also liked the prospect of tax cuts—these appeared to be a simple (and simplistic) way to make life better—and supported Reagan’s war against the cultural excesses, as he saw them, of the 1960s. Results like these were hardly consoling to Democrats, who recognized that Reagan had won a striking personal triumph and that his victory foretold an era in which political conservatives might dominate national affairs. Speaker O’Neill was grimly forthright about the outcome: “A tidal wave hit us from the Pacific, the Atlantic, the Caribbean, and the Great Lakes.”
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5
“Morning Again in America”

Ronald Reagan loved to spin a yarn about two young brothers, one of whom was an inveterate pessimist, the other an incurable optimist. Their parents tried to narrow these extremes by giving them very different gifts on Christmas Day. The pessimist, presented with a huge pile of toys, cried in the corner, certain that the toys would break. The optimist, staring at a pile of horse manure, dug happily into it and exclaimed, “I just know there’s a pony in here somewhere.”
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Throughout his presidency Reagan was like the optimist. As he had during his campaign, he repeatedly scoffed at the notion that the country had entered an Age of Limits or was tumbling into an Era of Decline, and he never stopped telling Americans that they had what it took to climb to unimaginable heights. The United States, he reiterated, was “as a city upon a hill,” an exceptional, liberty-loving nation whose democratic institutions were destined to spread about the world.
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In his inaugural address, he urged Americans to “believe in ourselves and to believe in our capacity to perform great deeds, to believe . . . we can and will resolve the problems which now confront us.” He demanded, “Why shouldn’t we believe that? We are Americans.”

That Reagan truly believed this optimistic message was obvious to everyone who came into contact with him or heard him speak. His faith in the capacity of the United States continued to know no bounds. And his media-wise aides made sure that the message got across. As Michael Deaver, a top aide, later put it, “We kept apple pie and the flag going the whole time.” In 1984, Deaver and others made “It’s Morning Again in America” the central theme of Reagan’s feel-good campaign for reelection. Then as always they carefully orchestrated his public appearances, often providing television reporters with a “line-of-the-day” sound bite—almost invariably an optimistic one—for use in the evening news.

Staged this way, Reagan struck opponents as little more than a pitchman—a national master of ceremonies who was disconnected from events about him. That was often the case, especially in his second term, but some of the goals that he advanced—winning the Cold War, shoring up traditional values, embracing the American Dream of upward social mobility—resonated with millions of voters. Blaming liberals for being “soft” on Communism and “permissive” about developments at home, many Americans were receptive to his rhetoric and supportive of his policies. That is to say, they were not fools who were seduced by flash and dash. Reagan’s message, as much as his manner of delivering it, helped to explain why his political appeal, though fluctuating during his eight years in office, managed to endure.

He was nonetheless a masterful television presence. When he prepared a major address, he memorized his scripts to the extent that he needed only to glance at cue cards when he spoke.
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At his best he was a powerfully moving, inspiring orator—the Great Communicator of legend. House Speaker Tip O’Neill, listening to Reagan speak to the nation following the fiery explosion of the space shuttle
Challenger
in 1986, admitted that he wept, and added, “He [Reagan] may not be much of a debater, but with a prepared text he’s the best public speaker I’ve ever seen. . . . I’m beginning to think that in this regard he dwarfs both Roosevelt and Kennedy.”
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Reagan was a seasoned enough politician and administrator to recognize in January 1981 that he had to do more than talk: He had to act as quickly as possible on his electoral mandate. Whereas Carter had assumed that he and his team of young Georgians could conquer Congress, Reagan took no chances. Assembling a strong transition team, he selected James Baker, Bush’s campaign manager in 1980, as chief of staff. Baker proved to be a politically shrewd, media-savvy, and highly efficient insider during Reagan’s first term, after which he took over as treasury secretary.
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Reagan also visited Washington before his inauguration to meet with O’Neill and other key figures in Congress. His affability and obvious desire to consult and cooperate impressed titans on the Hill. Then, as later, political opponents found him to be unfailingly civil and friendly, never demonizing them. His gifts as a raconteur stood him in especially good stead with O’Neill, who enjoyed swapping yarns with him.

Unlike Carter, Reagan knew enough not to send a pile of big programs to Capitol Hill. Instead, he concentrated on the most important issues of the campaign: increasing expenditures for the military, cutting domestic spending on social welfare, and—above all—reducing federal income taxes by 30 percent over the next three years. Reagan’s zeal for lower taxes was partly grounded in his understanding of contemporary theoretical arguments for supply-side economics, as it was called, but it was primarily visceral—a result in large part of his own experience with the IRS. Donald Regan, treasury secretary in Reagan’s first term, later explained why Reagan felt as he did about taxes:

When he was in Hollywood he would make about three or four hundred thousand dollars per picture. Reagan would work for three months, and loaf for three months, so he was making between six and seven hundred thousand dollars per year. Between Uncle Sam and the state of California, over 91 percent of that was going in taxes. His question, asked rhetorically, was this: “Why should I have done a third picture, even if it was
Gone with the Wind
? What good would it have done me?”

So he loafed for a part of the year. And he said the same thing was happening throughout America. People would reach a certain peak, and they weren’t willing to do the extra effort that was needed to keep us a first-class nation.
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The fundamental concept behind supply side-economics was simple: Cutting taxes would enable Americans, notably employers and investors, to retain more income, which would give them the incentive to make even more. Greater entrepreneurial activity would spur rapid economic growth, which would hike personal income—and bring in greater tax revenue, even at the lower rates. Many economists ridiculed these ideas, complaining that people who supported supply-side ideas had a “have your cake and eat it, too” approach to government: They demanded benefits from Washington but refused to pay for them. There was surely truth in such complaints, but Reagan was unmoved. “You know economists,” he was wont to say. “They’re the sort of people who see something works in practice and wonder if it works in theory.” Reagan also emphasized that the tax bite had grown sharper in recent years. For this reason, among others, tax cuts had great political appeal. And the economic stagflation of the 1970s had convinced many policy-makers that prevailing economic wisdom, notably Keynesian ideas, had not worked.

Supply-side economics had developed widespread support in the late 1970s. As early as 1977, Republican congressman Jack Kemp of New York, a presidential aspirant in 1980, had argued strongly for supply-side ideas. Democratic senator Lloyd Bentsen of Texas, chairman of the Joint Economic Committee of Congress, declared in 1980 that America had entered “the start of a new era of economic thinking. For too long we have focused on short-run policies to stimulate spending, or demand, while neglecting supply—labor, savings, investment, and production. Consequently, demand has been over-stimulated and supply has been strangled.” The committee, following Bentsen’s lead, recommended a “comprehensive set of policies designed to enhance the productive side, the supply side, of the economy.”
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Bentsen’s position indicated that Reagan’s tax plans could expect to receive some bipartisan support. Still, most Democrats opposed him. With a majority in the House—divided government persisted throughout Reagan’s presidency—they had enough votes to stop him. Tax cuts, they said, would benefit the rich more than the poor and exacerbate economic inequality. They would also expand budget deficits, the more so because the president was also calling for huge increases in defense spending. As Reagan and his aides lobbied hard for the bill in March 1981, it was by no means clear that the measure would pass.

At this point fate dealt the president a cruel but, as it happened, a politically beneficial hand. On March 30, a deeply troubled twenty-five-year-old man, John Hinckley Jr., tried to assassinate him as he left a speaking engagement at a Washington hotel. Firing six times with a .22 caliber pistol, Hinckley shot James Brady, Reagan’s press secretary, in the head. Severely wounded, Brady became permanently disabled. Other shots bloodied a Washington policeman and a Secret Service agent. One of Hinckley’s shots ricocheted off the presidential limousine, hit Reagan under his left arm, struck a rib, and lodged in his left lung close to his heart. He was rushed to a nearby hospital, where he was bleeding heavily. Doctors operated for two hours in order to remove the bullet and to save his life. Reagan’s brush with death, closer than Americans understood at the time, kept him in the hospital until April 11.

While Reagan recovered in the hospital, news releases informed a frightened American public how calm and good-humored he had been. As he was being taken into the operating room, he told his wife, Nancy, “Honey, I forgot to duck.” When doctors were about to operate, he quipped, “Please tell me you’re all Republicans.” Polls recorded that his courage and humor were helping him to soar to new heights of popularity, with more than 70 percent of the people giving him favorable ratings. After returning to the White House, Reagan kept a fairly low profile until April 28, when he emerged to give an eagerly awaited televised speech to a joint session of Congress. Still recovering, he seized this dramatic, emotionally charged occasion to call upon the legislators to enact his tax and spending programs.

How could Congress defy such a popular man? During the next three months Reagan worked hard to get his budget and tax bills through the Congress. One historian has calculated that during the first 100 days of his term (within which time he was recovering from his wound) he met sixty-nine times with 467 members of Congress, in addition to lobbying many others over the phone.
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In so doing he showed patience and good humor. Though Reagan rejected major changes to his plans, his actions indicated (as had been the case when he was governor of California) that he was far from the inflexible ideologue that critics had described. When he needed votes, he compromised in order to craft bipartisan coalitions of Republicans and conservative Democrats—“boll weevils,” critics called them. O’Neill, who had underestimated him, complained to a constituent, “I’m getting the shit whaled out of me.” James Wright of Texas, the House majority leader, wrote in his diary in June: “I stand in awe . . . of [Reagan’s] political skill. I am not sure that I have seen its equal.”
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The president’s persistence paid off in July, when Congress passed slightly modified tax and budget bills. Reagan signed both into law on August 13. The tax law, which forty-eight Democratic House members supported on the final vote, called for a 23 percent cut in federal income taxes over the next three years. It reduced the top marginal rate on individuals from 70 percent to 50 percent, and it cut rates in lower brackets. The administration estimated that the reductions would amount to $750 billion—an enormous sum—over the next five years. The budget bill, along with new regulations that his appointees put into place, gave Reagan many of the cuts in domestic spending—in public assistance, food stamps, and other means-tested programs for the poor—for which he had campaigned. Reagan also terminated a Carter-era jobs program, the Comprehensive Employment and Training Act (CETA), which had provided work for some 300,000 people in 1980. At the same time, he approved the paring of some 500,000 names from the rolls of people covered under Social Security’s disability program.
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Reagan said that cuts in the budget bill alone would total some $130 billion over the next three years.
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In securing these large goals, Reagan greatly advanced the salience of conservative economic ideas, thereby driving liberals—then and thereafter—onto the defensive. His successes wowed many seasoned observers. Reporters spoke of the “Reagan Revolution” that he had wrought in fiscal policy. Hedley Donovan of
Fortune
wrote that the tax and budget acts represented the “most formidable domestic initiative any president has driven through since the Hundred Days of Franklin Roosevelt.”
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At last, it seemed, the United States had a president who could oil the gears of government and make them turn.

Just a few days after Congress passed his tax and budget bills, Reagan took a step that gave him an undying reputation for firmness under pressure. When federal employees who were members of the Professional Air Traffic Controllers’ Organization (PATCO) threatened to strike for better pay and benefits, he determined to resist their demands. When they voted to strike, he gave them forty-eight hours to return to work or be fired. Many Americans were appalled, sure that air safety would collapse, but Reagan (who was the first American president in history to have served as the head of a union, and who had received the endorsement of PATCO in 1980) believed that such a strike would be illegal, and he held firm. When the deadline passed, he announced that 38 percent of the strikers had returned to work and that military controllers would step in to help. Ten days later, having fired more than 11,000 air traffic controllers, he reassured the nation that flight schedules had returned to 80 percent normal. His action destroyed the union and sent an unmistakable message to other labor leaders that he could be a man of steel.