What would President Reagan do in the debt limit battle? That’s unknowable, but we do know what his goal would be: get the best deal possible under the circumstances. Reagan never let the perfect or the unattainable keep him from achieving the good.
Reagan spent the 1980 campaign promoting a 30 percent, across the board tax cut on individual income. It would be phased in over three years, starting in 1982.
Since Democrats controlled the House by a sizeable margin, Reagan couldn’t get exactly what he wanted. True, he could have held out for a 30 percent cut – and probably gotten nothing. Instead, he trimmed his tax proposal to 25 percent over three years, starting in 1983, and Congress passed it in 1981.
Reagan’s tax cuts weren’t the only reason the economy soared, but they were a big one. And those cuts turned out to be a down payment on a further reduction in tax rates in sweeping tax reform in 1986. If he hadn’t compromised five years earlier on tax cuts that lowered the top rate to 50 percent, it’s unlikely he’d have succeeded in cutting it to 28 percent in 1986.
Reagan faced a similar situation on national security. In the campaign against Jimmy Carter, he’d advocated a tough stance against the Soviet Union that included an expensive military buildup. Most Democrats were opposed.
He made a deal, if only a tacit one. Democrats would go along with a surge in defense spending and Reagan would accede, to some extent anyway, to higher domestic spending. Deficits grew, but the groundwork was laid for winning the Cold War.
Now, back to the debt limit fight. Would Reagan support the Boehner plan for cutting spending while agreeing to a hike in the debt ceiling? I think so. He would see it as the best deal that’s attainable at the moment. Sure, he would favor deeper cuts, lower spending caps, and a balanced budget amendment, too, but he would recognize those can’t pass now. He wouldn’t let his pursuit of them keep him from achieving something substantial now.
By first grabbing what he could, Reagan opened the way to driving tax rates down later to the level he wanted all along. The result: an economic boom that lasted for a quarter century. He accepted a tradeoff between military and domestic spending. The result: we won the Cold War.
Lots of politicians are smart. Reagan was wise. He knew that, in politics, you never get everything you want in one swoop. You take what you can get now and, if all goes well, come back for the rest later.
It’s fine to stand on principle. You’d be hard pressed to name a Republican leader who was more principled, as a conservative, than Reagan. But Reagan applied his principles over the long run, and that’s why he achieved so much.