The American Spectator

I write to associate myself with almost every word of Jim’s defense of Reagan’s record as a tax cutter and the beneficial effects thereof. He is absolutely right on those points. On the other hand, I do wish to correct the idea that Reagan was a failure in terms of limiting government or cutting spending. That is only partially true. Yes, federal spending rose overall under Reagan. But he actually did a good job, even against a Demo Congress, at restraining the parts of the budget that are easiest to manage, namely domestic discretionary spending. The Gramm-Latta spending cuts in the early 1980s were significant. The Gramm-Rudman-Hollings spending limitation provisions in 1986 were fairly successful, too, even after they had some of their teeth knocked out (rightly) by the courts. And the Social Security reforms engineered by Bob Dole, with Reagan’s tacit support, mostly involved minor tax hikes, but they also cut a few costs, partly by raising the normal “retirement age” up to 67 from 65.

What caused spending to skyrocket was a combination of two things, one of which any president would have had major trouble controlling, and the other of which President Reagan was right to expand. The second, of course, is military spending. While even back in the 1980s I was calling on Cap Weinberger to be a little less indiscriminate with the Pentagon’s spending, the simple fact is that the large bulk of the HUGE military spending hikes under Reagan were desperately needed in order to win the Cold War. It was spending that was almost entirely justified, and the part that wasn’t justified as specific line items was probably justified by the political need to keep building up the arms supply and the personnel levels rather than nitpicking them to death.

That said, one other HUGE, HUGE problem Reagan faced was that Presidents Johnson and ESPECIALLY Nixon had left behind some major fiscal time bombs. Each of them, especially the latter, had monkeyed with the formulas used for entitlement spending (including the various programs known collectively as “welfare,” which as a whole was effectively an entitlement at the time) so that the exra benefits expanded at what amounted to an exponential rate rather than a geometrical rate (or at least in the same way that “the magic of compound interest” works). And considering how high the inflation rates were during the latter Carter years, the COLAs for all those programs would have been outrageously expensive even if the formulas hadn’t been jimmied with. With the two recessions of the late-ish 1970s and then 1980-1982 hit, so many more people qualified for benefits, at rates that by then had had nearly eight years to compound, that entitlement spending absolutely skyrocketed. Again, all of that was based on formulas written into law that Reagan A) never could have reined in as long as Dems held a House majority and B) probably couldn’t afford to try to rein in, politically, when faced with so many other pressing political needs (Cold War, etc.) hat required him to press the envelope of his electoral mandates. Even when the Reagan recovery began, the added spending already was baked into the pie, so to speak — ESPECIALLY when the interest on the debt began to cost so much darn money because the debt in 1980-1982 was financed at the exorbitant interest rates that prevailed as Carter was leaving office.

In other words, the none-defense portion of Reagan’s big spending was a hangover from Johnson, Nixon and Carter. And it was a hangover that even a Ron Paul with dictatorial powers would have had a hard time avoiding.