“I didn’t come to Washington to raise taxes.”
— Congressman Jack Kemp to President Ronald Reagan
Jack Kemp was furious.
Summoned to the White House in 1982 for a one-on-one with President Ronald Reagan — Reagan not only his longtime ideological and political ally but his old boss (as an off-season football quarterback for the Buffalo Bills Kemp had served an internship as a special assistant to the fledgling California Governor Reagan in 1967), now-Congressman Kemp was adamant.
Reagan was being told by all manner of GOP Establishment leadership types like Kansas Senator Bob Dole, the chairman of the Senate Finance Committee, that taxes had to be raised as Democrats insisted. The Reagan economic policy was a failure, Reagan was being told. And the Democrats had a deal — a spending reduction of $3 for every $1 in tax cuts. After trying mightily to get Reagan to give up on the third-year of his tax cuts — which Reagan flatly refused — Dole made his pitch for an increase in business and excise taxes. Based on the idea of those corresponding budget cuts, Reagan reluctantly went along.
“My heart isn’t in it,” he wrote in his diary. It wasn’t — and it decidedly wasn’t in Kemp’s either.
Reagan was frustrated, Kemp incensed. Neither man saw increasing taxes as anything more than the umpteenth excuse to grow government as opposed to the economy.
Be that as it were, the Reagan White House was sent out there full bore to raise business and excise taxes. The House Republican leadership, including a GOP Congressman from Wyoming named Dick Cheney, pressed the case that working with House Speaker Tip O’Neill and his majority was the way to solve the problem.
So too was Reagan’s Budget Director David Stockman — a close Kemp ally when Stockman served in the House as a young Michigan congressman — pressing the case. Stockman had been an early behind-the-scenes deserter on the President’s tax cuts, coming close to getting fired when it was revealed he had been covertly making all manner of wild accusations about the economics of tax cutting.
Yet Jack Kemp was refusing to go along. He simply didn’t buy the pitch. If taxes rose, he was convinced — and this was in the aftermath of the first round of Reagan tax-rate and budget cuts a year earlier in 1981 — not only would ground be lost in the fight for economic growth. More to the point the budget cuts would never occur — and Democrats would soon be back demanding even more spending.
So, fresh from his tense meeting with Reagan, Kemp returned to Capitol Hill and rounded up some 61 House Republicans to say what he was saying quite publicly:
I did not come to Washington to raise taxes.
In a speech on the House floor Kemp took direct aim at the story Dole and other Republicans, not to mention O’Neill and his Democrats, were spreading: that the business and excise tax increases were really not such a big deal. To which Kemp replied by running down an itemized list of the proposed tax increases, mocking the promise that the tax increases wouldn’t really affect middle-class Americans. This was correct, said Kemp sarcastically, if
…you don’t use the telephone, don’t pay medical insurance premiums, don’t suffer losses due to theft or casualty, don’t smoke, don’t ride in airplanes, or don’t have a savings account.
Sending his formal letter of protest to the President that was signed by those 61 House Republicans, Kemp pointedly added:
Quietly, without debate, the Republican Party is in danger of making a U-turn back to its familiar role of tax collector for Democratic spending programs.
This Kemp remark, writes Reagan biographer Steven Hayward, was the origin of the thought that Kemp’s compadre Congresssman Newt Gingrich would later tartly express: that the GOP’s Senate Finance Committee Chairman Bob Dole and his support for tax increases made Dole and his fellow GOP tax increasers the “tax collector for the welfare state.”
Bob Dole was furious, protesting — in a remark that is uncannily prescient for the same struggle in December of 2012 —
We’re not trying to make a U-turn. We’re just trying to avoid going over the cliff.
Then Dole grumbled about the classical economics — or as it was being called, “supply-side economics” — that had already been a stunning success for presidents Calvin Coolidge and John F. Kennedy:
I never understood all that supply-side business.
Catch that? In 1982 the tax wing of the Republican Party was insisting that if Reagan juuuuuuuuuust went along with Tip O’Neill and his band of liberals and increased taxes….America would nevvvvvvvvvvver face the threat of going over the fiscal cliff again.
Honest. Really. Never, ever again.
Ronald Reagan reluctantly agreed. Later saying it was the worst mistake of his presidency.
And lo and behold……here we are again. Not to mention there we were in 1990 when President George H.W. Bush was told the same fairy tale — and fell for it too.
Amidst all the abuse principled House Republicans of 2012 are taking for not agreeing with Speaker John Boehner to go along with President Obama and raise tax rates on the “rich” — it is important to learn from Reagan and Kemp’s hard-learned experience as they themselves did.
For once in his presidency, in 1982 Reagan went against his always superb instincts. Not to mention his knowledge of economics gained over time as an economics major in college, an actor, spokesman for General Electric, and, last but not least as a labor negotiator in his role as head of the Screen Actors Guild.
But Reagan never, as is frequently portrayed today by Obama allies, abandoned his belief in the economic necessity of lower tax rates.
First, Reagan flatly refused to raise the very income tax rates he had just finished cutting and signing into law in August of 1981 — not even a year earlier. To be quite colorfully specific, when then-House Majority Leader Jim Wright, the Texas Democrat and later Speaker, tried to get Reagan to go along with giving up the third year of the Reagan tax cuts for a list of larger, unspecified domestic spending cuts, Reagan bluntly replied:
You can get me to crap a pineapple but you can’t get me to crap a cactus.
In fact, Reagan’s signature was literally not even dry on the new 1981 law when the cry went up from liberals for its repeal. Using the same “tax the rich” class warfare rhetoric employed by Obama today, it a liberal demand that grew louder as 1982 rolled in and before the new law had even taken effect. Reagan believed the lower tax rates were essential to a robust economy — and he stuck to his guns. Indeed, when Democrats on the Senate Finance Committee sought to roll back the third year of Reagan’s tax rate cuts, not a single Republican on the Republican-held committee went along with them and the proposal died. What passed instead was a compromise: Dole’s increase on excise taxes — telephones, air travel and the like as Kemp noted on the House floor.
Second, the role of the media needs to be understood in this. Just as the House Republicans of today are being pilloried both in the media and by some fellow Republicans for refusing to agree on principle to an increase in tax rates, so too back in 1982 was Bob Dole and any other pro-tax increase Republican being lionized in the media. With Establishment Republicans snarling at Kemp and, in a lower voice, Reagan himself.
It’s the oldest game in town — then and now.
Biographer Hayward notes in detail the sudden media slobberings over the once hated-by-the-media Dole. Because he had insisted on raising taxes Dole was suddenly winning accolades from liberal outlets such as the Boston Globe, Time magazine, the New Republic, and the Baltimore Sun.
Here in the 1982 pages of The American Spectator, Tom Bethell was once again writing about the eternal liberal media game of suddenly praising a Republican politician who carried the liberal water. Bethell had repeatedly pointed out that when a GOP politician does this, stories mysteriously blossom in the liberal media about how X has “grown in office.” Almost like clockwork in 1982, George McGovern — defeated two years earlier for his South Dakota Senate seat in the Reagan landslide — was quoted in the press as saying exactly that: “Bob Dole has grown.”
How does all this translate to the realities of the fiscal cliff battle of 2012 — yet another fiscal cliff caused by massive government overspending?
Other than taking what Reagan himself called the “bitter medicine” on those excise tax hikes — officially the Tax Equity and Fiscal Reform Act or TEFRA — Reagan was like a rock in holding on to principle. He walked out of the Reykjavik summit with Gorbachev rather than give up the Strategic Defense Initiative. He fired the air traffic controllers over the objections of a tremendous liberal media chorus. He insisted on challenging the Soviets in Grenada, Nicaragua, and Central America generally. He never wavered in his opposition to abortion. And he came back for another round of tax cuts — which he got — after his 1984 landslide re-election.
Was it tough?
But if there’s one thing today’s House Republican dissidents can take both heed and heart from, it’s that both Reagan and their former House colleague Kemp stayed the course with their beliefs. The one time Reagan wavered… he regretted it.
The current drama playing out in Washington over the fiscal cliff is identical in many respects to the drama of the 1980s.
This time, instead of Bob Dole being accused of being “the tax collector for the welfare state” the name attached is John Boehner.
It is a political tag that should send shivers through those Republicans willing to abandon tax rate cuts — thinking they can somehow appease the unappeasable Obama media machine. A machine set to blame Republicans no matter what they do. Just as they blamed both Reagan and George H.W. Bush after the two had signed on to the liberal demands of the day for tax increases.
It will be interesting over the next few days and months to see how many House and Senate Republicans are prepared to give a Republican primary challenger the ammunition of saying:
My opponent in this Republican primary is serving as the tax collector for Barack Obama’s welfare state.
We will see.
And a Happy New Year to you.