The Reagan Revolution A Win for Smaller Government

Dealing skillfully with Congress, Reagan obtained legislation to stimulate economic growth, curb inflation, increase employment, and strengthen national defense. He embarked upon a course of cutting taxes and Government expenditures, refusing to deviate from it when the strengthening of defense forces led to a large deficit... Ronald Reagan envisioned a smaller government, a greater America.

Despite his lip service toward smaller government, Reagan did not abolish even one government department or agency.

In 1980, President Reagan joined the office with this resounding declaration during his inaugural address In this present crisis, government is not the solution to our problem government is the problem. During his tenure, Ronald Reagan pursued many policies that were in consonance with his beliefs in individual freedom in order to reduce peoples dependence on the government. The Reagan Revolution saw America grow in prosperity, with a majority of Americans developing a new confidence in the economy. Reagan managed to give a massive boost to American morale in the difficult and uncertain last years of the Cold War. President Reagan was successful on many fronts, being instrumental in bringing about broad-based political and economic reforms. Reaganomics championed cutbacks in business regulation, government spending, and taxes so as to spur economic growth, and indeed provided the much needed impetus to the economy. Despite all this, Reagans success in achieving a major long-cherished goal of his  smaller government  remains debated. While Reagans supporters claim an impressive victory for Reagan in this area, many scholars and critics remain skeptical or do not agree. This is so because while Reagan wanted a smaller government, he was very keen on drastically increasing U.S. military spending, as a result of which the overall size of the government actually grew in his tenure. However, he did manage to obtain significant downsizing in governmental spending on welfare and other public programs and services. Reagan was definitely successful in checking the expansion of the welfare state, but even here critics argue that it would have occurred anyway.

President Reagan was not unique or unusual in taking up the cause of a smaller government. For many Americans, the word government does not have a whole lot of positive connotations. Presidents, presidential candidates, senators, members of congress  incumbents as well as seekers to the office  all of them typically indulge in rhetoric against a big government and large bureaucracies. It is simply in the American spirit to root for a streamlined government.

In the general perception the United States has always been a country of low taxes and small government, particularly in proportional comparison with European countries (that is, at least until the advent of the current economic crisis in late 2008 with its massive governmental spending and bailouts). American people do not have much faith in the capabilities of government in general it is felt that government tends to be out of touch with people and spends extravagantly in an unaccountable manner. President Reagan was able to tap in such sentiments of the voters when he won the election and became the American President at the beginning of the 1980s. Reagans insistence on small government was not unique in its nature but stands out nonetheless because of Reagans powerful commitment to this policy, his resolve and tenacity.

Recalling the emergence of his belief in a smaller government, Reagan said in a speech toward the end of his presidency

 But back in the 1960s, when I began, it seemed to me that wed begun reversing the order of thingsthat through more and more rules and regulations and confiscatory taxes, the government was taking more of our money, more of our options, and more of our freedom. I went into politics in part to put up my hand and say, Stop. I was a citizen politician, and it seemed the right thing for a citizen to do.

He continues the speech remarking on the success of his presidency in this regard and reaffirming his credo of smaller government

I think we have stopped a lot of what needed stopping. And I hope we have once again reminded people that man is not free unless government is limited. Theres a clear cause and effect here that is as neat and predictable as a law of physics As government expands, liberty contracts.

Right at the very early stages of his political career, in 1961, Reagan took a stand against socialized medicine, what would become the Medicare program. And as early as 1964 when Reagan joined the presidential campaign of the conservative candidate Barry Goldwater, Reagan expressed his belief in the desirability of a smaller government. He traced his ideology to that of the Founding Fathers in a speech that made him famous

The Founding Fathers knew a government cant control the economy without controlling people. And they knew when a government sets out to do that, it must use force and coercion to achieve its purpose. So we have come to a time for choosing.

 This Time for Choosing speech put Reagan on the political map and soon led to his becoming the governor of California, in which role he acquitted his duties from 1967 to 1975. During this period, many of the policies that he would pursue as a president took shape. Reagan rallied against the notion of the welfare state and spoke about sending the welfare bums back to work. He became the most noticed spokesperson for Republican ideals of less government, less regulation and lesser taxes.  He was leading the movement of conservatism.

Although conservatism has a wide array of meanings, in the context of contemporary American politics it is usually associated with the Republican Party. Conservatives have a particularly strong faith in capitalism (which goes with anti-communism) they believe in the need for strong armed forces, smaller (federal) government, and lower taxes. It was based on this conservative agenda that Reagan rose to Presidency.

Limited government conservatives, as they are called, follow Thomas Jefferson and James Madison in seeking a decreased role of the federal government. They nurture an implicit  suspicion of a powerful federal government. Reagan, though, sometimes felt that the word conservative has a negative aura and preferred to call his ideology libertarianism, at the heart of which lies the need to strive for more individual freedom and less governmental authority

If you analyze it I believe the very heart and soul of conservatism is libertarianism The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom and this is a pretty general description also of what libertarianism is.

Ronald Reagan reshaped and reinvigorated the Republican party, spearheaded the modern conservative movement, and was preparing himself to drastically alter the political dynamic of the United States. However, for many decades by then Congress tended to be more or less in favor of a strong centralized government, its sympathies of course somewhat wavering according to its composition. In the aftermath of the Great Depression there was a monumental growth in the size and reach of the government during the FDR era. Since then Republicans and even some Democrats sought to disperse the concentration of power from the center back to the states. The Republican stance became stronger in reaction to the growth of the welfare state during the tenure of Lyndon Johnson. During the presidency of Nixon, the goal was to achieve a bigger, stronger, and a more effective government. This again rubbed the conservatives in the wrong way. President Carter though, despite being a Democrat, wanted to move away from this trend. Carter famously said America has the greatest economic system in the world. Lets reduce government interference and give it a chance to work. However, he was not able to accomplish much in the direction of a smaller government and lesser governmental regulation.

It was in this backdrop that Reagan assumed the leadership of the nation. The stage was set for the Reagan-Republican smaller-government rebellion in the 1980s and 90s.  In 1981, Reagan sought to implement his economic policies with the following priorities
cut government spending
cut marginal tax rates on income from labor and capital
reduce regulation
check the money supply to reduce inflation.

Reagan was bent on reducing and in some cases eliminating social programs that had been in place for a few decades, significantly increase defense spending in a bid to definitively win the Cold War, and slash taxes in any way that is possible. The Reagan approach became the conservative standard for social, economic and foreign policy issues. The Age of Reagan was about to dawn.

Reagan led the first Republican majority in the Senate since 1954, but he had to contend with a Congress dominated by Democrats. However, Republicans gained increased representation in the House during 1980 congressional elections, forming a segment that at least initially strongly backed Reagan. Many of the Southern Democrats too were favorable to Reagan in promoting his conservative policies. In fact Reagan fared in Congress better than his three immediate predecessors, Nixon, Ford and Carter. A factor that certainly helped reduce the resistance from Congress is Reagans landslide victory against the incumbent president Carter and his popularity as the leader of the nation.

At the first opportunity, Reagan urged Congress to clear the passage for some drastic spending and tax cuts.In forging a new beginning for America, Reagan proposed to send Congress a comprehensive economic program that has for its focus budget cuts in virtually every department of government.Thus began Reagans long turbulent relationship with Congress as the President. Reagan was in office during the 97th, 98th, 99th, and 100th congresses. In the first years, many in the Congress joined Reagans cause in slowing the growth of the federal government, shifting of the focus of social programs from center to the states, making massive budget cuts, and amply expanding military spending.

In May 1981, Congress approved most of the elements in the package presented by Reagan.  Personal income taxes were slated to be brought down by a 25 percent over a three-year period. Reagan worked with Congress to bring about budget cuts to the tune of 39 billion, which induced cuts in federal spending on a range of social programs. An acceleration in military buildup was underway, with Reagans hallmark SDI (Strategic Defense Initiative or Star Wars) looming on the horizon. Reagan also proposed considerable streamlining of the government departments

It is my belief that these actual budget cuts will only be part of the savings. As our Cabinet secretaries take charge of their departments, they will search out areas of waste, extravagance and costly overhead, which could yield additional and substantial reductions.

Thus the President was off on a promising start in implementing his economic reforms, but unfortunately the levels of cooperation between him and the Congress gradually eroded. Reagan wanted to reduce the power and influence of Washington and such an agenda was bound to run into tough opposition in Washington sooner or later. Furthermore, while Reagan had a clear theoretical approach  that of cutting federal spending on local and state programs in order to downsize government at all levels  he did not have a clearly formulated program to achieve it.

The ideological commitment to a smaller government is fine, but when it came to practice, Reagan became increasingly more and more preoccupied with Cold War and less and less with domestic programs. In fact, the topics of downsizing government and cutting taxes feature prominently only during his first term, in the second term they moved to the backstage. Not that Reagan was done with what he set out originally by the end of his first term itself, but it is simply that there were more pressing issues to look after. Another factor to be taken into account is that Reagan suffered a major blow to his reputation during the Iran-Contra scandal, we must remember that some part of the support he initially mustered from the Congress was owing to his popularity, and as his popularity suffered a setback so did the support from Congress. By the mid-1980s Congress was significantly tempering the Reagan cutback program, though American military spending had already dramatically expanded by then. As a result of all this, the size and expenditures of the federal government effectively grew during Reagans administration, and also the states gained no significant new powers.
At the beginning of his presidency, Reagan was genuinely hoping to elicit cooperation from Congress, cutting across the party lines. He said in a speech, I extend my hand in cooperation, and I believe we can go forward in a bipartisan manner. Ive found a real willingness to cooperate on the part of Democrats and members of my own party.But by the next year itself, Reagan was already on the defensive. This time he was saying, I do not believe that a collision between Congress and the Administration is inevitable. I know that such a collision would be destructive. This time, instead of support from both the sides, he had even incurred displeasure from the members of his own party. Remarking on the opposition he faced from within his own party, an article in the Time magazine of that period said the following

Sketching out his proposed fiscal 1984 budget, Reagan has tentatively decided to call for more severe cuts in social spending, while leaving the Pentagons budget essentially intact Republican leaders in the House and Senate ranged from unenthusiastic to angry about the Presidents intransigence. If Reagan holds firm, he may be headed for the bloodiest fight of his presidency.

If Reagan stood adamant and did not back down in his budgetary program, a stalemate with Congress was widely expected, which could have resulted in the further deterioration of the economy.

We must note that Reagan entered presidency at the height of a depression. In February 1981, he said in a nation-wide address that the United States was in the worst economic mess since the Great Depression. In such circumstances, Reagan could not afford to embark upon any course of action that could further jeopardize the health of the economy, simply in order to further his conservative ideology. At the same time, the military might of the U.S. had to be bolstered at any cost, for it could become a crucial factor in winning the Cold War the Soviet Union was clearly coming apart slowly after the death of Brezhnev and that was the time for the United States to take advantage of the situation and gain the upper hand in a decisive manner. Reagan was trying to compel the Congress to make way for cutting governmental size and programs through lack of choice on the one hand taxes were cut and on the other hand military expenditure was boosted, with the result that the governmental revenues diminished by a significant margin and the Congress was left with no alternative but to make cuts on welfare and other social programs, whether Reagan wanted it or not. It was a simple strategy on Reagans part but it was not as easy to implement. Reagan could achieve only a modest success in realizing his vision of smaller federal government and reduced welfare programs.

However, Reagan did turn the tide of the economy.  Just after a couple of years of Reagans presidency, the economy bounced back forcefully. The fast and strong economic recovery is the one thing that helped Reagan win the second term, defeating the Democrat contender Walter Mondale again by a long margin. Reagans era is in fact remembered today as the time when America reached a peak of prosperity. Reagans limited success with the issue of smaller government must be seen in this context. On the whole, Reagan was able to cut the budget allocations for quite a few social programs which included food stamps, Medicaid, federal education programs, and subsidies given by the Environmental Protection Agency. More controversially, Reagans administration managed to get many people with (alleged) disabilities removed from the Social Security disability rolls. Other aspects of Social Security, though, were preserved intact, as well as the Medicare program. Some of Reagans more ambitious proposals, however, like abolishing the department of education, were categorically rejected by Congress.

The Reagan era was marked by mammoth budget deficits which escalated the national debt. But in most other ways the legacy left by Reagan was a positive and inspiring one. Ideologically, the Reagan legacy was one of exaltation of free enterprise which perforce necessitated a distrust of the role of the government. The fundamental block in realizing the goal of a smaller government is a simple logical paradox, because even in the 21st century the nation still wanted a smaller government, in theory, but in practice people continue to hanker for more government services. So there is this inherent difficulty in implementing this ideal. But that does not mean we must abandon it. We must constantly strive to achieve a balance. Reagans vision was above all a light on the path toward reaching and sustaining such a balance.

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