Posted on 03/23/2018 3:05:07 PM PDT by detective
Want some perspective on the debt ceiling negotiations and calls for tax increases in exchange for spending cuts? You might want to consider a cautionary tale dating back to 1982 when President Ronald Reagan agreed to a deficit-reduction compromise—and a result he didn’t bargain for.
Former Attorney General Edwin Meese III, who served under President Reagan, and Heritage Action for America’s Michael Needham write in today’s USA Today of the agreement Reagan struck in 1982 in hopes of tackling high deficits. He agreed to a modest increase in business taxes (which he didn’t like) in exchange for spending cuts (which he wanted). The higher taxes were enacted, but the spending cuts never arrived. Meese and Needham explain:
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.
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.
Did the higher taxes help bring down the deficit? Nope. Meese and Needham write that “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.”
As Congress considers which road to take on the debt ceiling, they ought to take a look at their history books and realize that in Washington, what you bargain for isn’t always what you get.
But we should not lose perspective.
President Reagan was lied to and deceived by the Democrats and moderate Republicans in 1982. Democrats played Reagan for a fool and he did not even realize it until much later.
Trump at least realizes he has been sabotaged.
Reagan was able to become the most successful president in my lifetime despite this and other times he was sabotaged by the Washington establishment.
It will be difficult. But Trump can recover too.
I’m with you but recall that Ronald never had a Republican House. If he had had the one that exists today it wouldn’t have mattered.
The House could be lost this Fall and the President would be impeached. The Senate won’t be able to remove him but the damage to his history will have been done.
An impeachment without removal, it’s possible his enemies can make him a one-term President.
President Trump is going to have to come back from what he suffered today.
The President agreed to the Porkulus because of pressure from the Pentagon and advice from Vice President Pence to kick the can down the road.
I would have vetoed it then and there.
Hopefully, Trump will learn a lesson to never trust anyone in the Washington establishment ever again.
Trump was naïve and thought he could work with those people.
He can’t.
The sooner Trump learns this lesson the better.
No wall then either, but boy did the lefties get their amnesgy.. yeah, let’s repeat that!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.