Reagan and Conservatism in two minutes
- Reagan won in 1980 promising to shrink the federal government. His advisers held to supply-side economics: cut tax rates, and people will work, save and invest more.
- The Economic Recovery Tax Act of 1981 cut income tax rates about 23 percent over three years. Defense spending rose, deficits grew, and the national debt nearly tripled by 1988.
- In August 1981 Reagan fired more than 11,000 striking air traffic controllers, and more employers then replaced strikers. Paul Volcker's high interest rates broke inflation but caused a deep recession.
- Voters would not let conservatives cut Social Security. A bipartisan 1983 law instead raised payroll taxes, taxed some benefits and raised the retirement age gradually to 67.
- The New Right fought over values. The Moral Majority brought evangelicals into politics, the Equal Rights Amendment died in 1982, and AIDS, first reported in 1981, sparked groups like ACT UP.
- George H. W. Bush broke his no-new-taxes pledge in 1990 and signed the Americans with Disabilities Act. Clinton's NAFTA passed, Republicans won the House in 1994, and a 1996 law ended AFDC.
- On the exam: Questions ask about the causes of the conservative resurgence, the effects of supply-side economics and deregulation, and whether the 1980s kept or changed the New Deal and Great Society.
Topic 9.2 key terms
- Supply-side economics
The idea that cutting tax rates, especially at the top, leads people to work, save and invest more, so the economy grows. Critics called it trickle-down. Also called Reaganomics.
- Keynesian economics
The idea, used by Democrats since the New Deal, that in a slump the government should spend money so people have paychecks and buy things. Supply-side starts with taxes. Keynesian starts with spending.
- Brady Bill (1993)
A 1993 law, named for James Brady, requiring a background check and a five-day wait to buy a handgun. He and his wife, Sarah, campaigned for it for years. An instant check replaced the waiting period in 1998.
- Boll weevils
Conservative Southern Democrats in the House who voted with Republicans for Reagan's 1981 budget and tax cuts. The name is the cotton pest. Their votes were the margin in a House the Democrats still held.
- Economic Recovery Tax Act (1981)
Rate cuts of 5 percent, then 10, then 10, starting October 1, 1981. Added up, textbooks say 25 percent. Compounded, the cut is about 23. The 70 percent top rate, by then only on investment income, fell to 50. Brackets were indexed to inflation from 1985.
- PATCO
The Professional Air Traffic Controllers Organization. About 13,000 of its 17,500 members struck on August 3, 1981, breaking the federal ban on strikes by federal workers. Reagan fired more than 11,000 who stayed out. The union was decertified on October 22, 1981, and lost the right to represent the controllers.
- Striker replacement
A worker hired to do the job of someone on strike. After the controllers were fired, more private employers replaced strikers instead of bargaining with them.
- Prime rate
The rate banks advertised for their best-rated business borrowers. It hit 21.5 percent in December 1980, after the Federal Reserve, under Paul Volcker, pushed rates up to break inflation.
- Recession of 1981–82
The downturn that followed the Fed's high rates. Unemployment reached 10.8 percent in late 1982, the highest since the Great Depression, then fell as inflation broke and the economy recovered.
- Social Security Amendments of 1983
The Greenspan Commission's rescue of Social Security, signed April 20, 1983. Payroll-tax increases were moved up, the full retirement age rose from 65 to 67 by 2027, up to half of benefits were taxed for higher-income retirees, and new federal workers were brought into the system.
- Deregulation
Removing government rules on an industry. Begun under Carter with airlines in 1978 and trucking in 1980. Under Reagan it reached savings and loans, natural gas prices, federal land and offshore oil leases, and some environmental and auto-safety rules.
- Geraldine Ferraro
Mondale's running mate in 1984. A congresswoman from Queens, and the first woman on a major party's national ticket.
- Tax Reform Act of 1986
A bipartisan rewrite of the income tax. It closed many loopholes and set two main rates, 15 percent and 28 percent. Signed October 22, 1986.
- Moral Majority
A political group the Rev. Jerry Falwell founded in 1979 to bring evangelical Christians into elections. It campaigned against abortion, pornography, the Equal Rights Amendment, and gay rights. Topic 8.14 tells how it started.
- Roe v. Wade (1973)
The 1973 decision that recognized a constitutional right to abortion. Webster (1989) and Casey (1992) let states add limits. They kept Roe's core. In 2022 the Court overturned it.
- Affirmative action
Efforts to open hiring and public contracts to people who had been shut out, taking race into account. In City of Richmond v. J. A. Croson (1989), the Rehnquist Court held cities and states to strict scrutiny and narrowed these plans. It did not end them.
- Immigration Reform and Control Act (1986)
Gave legal status to about 2.7 million immigrants living here without legal permission, and penalized employers who knowingly hired workers without it. Topic 9.5 follows the fight.
- Culture wars
The political fights of the 1980s and 1990s over religion, family, sexuality, gender roles, abortion, and diversity.
- Savings and loan crisis
Thrifts made riskier loans while the government still insured the deposits. More than 1,000 failed from 1986 to 1995. In 1989, FIRREA, the Financial Institutions Reform, Recovery, and Enforcement Act, created the Resolution Trust Corporation to close them and tightened the rules. Taxpayers paid about $124 billion. An early fight over regulating the financial system.
- Americans with Disabilities Act (1990)
A civil rights law signed July 26, 1990. It bans discrimination against people with disabilities in jobs, public services, public places, and telephone and television access, and it requires reasonable accommodations, practical changes so a person can work and get in. One of the broadest civil rights laws since 1964.
- New Democrat
A Democrat of the political center. Bill Clinton used the name in 1992. New Democrats backed free trade, smaller deficits, welfare reform, and tough crime laws.
- NAFTA
The North American Free Trade Agreement. It removed most tariffs among the United States, Canada, and Mexico, starting in 1994. Bush negotiated it. Clinton got the votes to make it law. Topic 9.4 follows what it did to factories and towns.
- Government shutdown
Parts of the federal government stop work when Congress and the president have not agreed on funding. In the winter of 1995–96 it happened twice. The second lasted 21 days, the longest to that date.
- Personal Responsibility and Work Opportunity Act (1996)
Replaced AFDC with Temporary Assistance for Needy Families (TANF): block grants to the states, work requirements, and a five-year lifetime limit on cash aid.
- Aid to Families with Dependent Children
Cash help for poor families with children, begun in the Social Security Act of 1935. States paid it with federal matching money. The 1996 law ended it.
- Don't ask, don't tell
The 1993 compromise on gay and lesbian service members. They could serve if they said nothing, and no one would ask. In September 1996 the Defense of Marriage Act defined marriage, for federal law, as a union of a man and a woman.
- Political polarization
After 1980 the parties sorted. Conservative Southern whites moved to the Republicans, and liberal Republicans faded. Close elections produced divided government, and in 1995–96 the budget fight shut the government down.
Transcript
Quotes are from the historical record and name their source. Lines marked Dramatized are reconstructions.
Forty Billion Dollars
1981
Key terms: Supply-side economics, Keynesian economics, Brady Bill (1993), Boll weevils, Economic Recovery Tax Act (1981)
"In this present crisis."
The crisis Reagan meant was the economy. Most people quote him without those four words.
Ronald Reagan
Now, so there will be no misunderstanding, it's not my intention to do away with government.
Ronald Reagan
It is rather to make it work—work with us, not over us; to stand by our side, not ride on our back.
His advisers believed in supply-side economics. Cut tax rates, and people will work, save and invest more, and the whole economy grows.
On March 30, sixty-nine days into his term, a gunman shot the president outside a Washington hotel. The bullet stopped near his heart.
In the operating room he told the surgeons he hoped they were all Republicans. One of them answered: Today, we're all Republicans.
James S. Brady
Three other men were wounded. His press secretary, James Brady, was shot in the head. He used a wheelchair for the rest of his life.
Four weeks later, to a standing ovation, he asked Congress for his program. Conservative Southern Democrats, the boll weevils, helped pass it.
The Economic Recovery Tax Act cut income tax rates about 23 percent over three years. The top rate fell from 70 percent to 50.
Cutting taxes was the easy half. Reagan also asked Congress to cut $41.4 billion from the next year's spending.
On August 13, at his California ranch, he signed the tax cut and about $35 billion in spending cuts. Defense rose almost $28 billion the next year. The tax cut cost about $38 billion in its first year and $139 billion in its third.
In September, the Agriculture Department proposed that schools could credit "a condiment such as pickle relish" as a vegetable. Critics said ketchup. The rule never did, but the name stuck, and the White House pulled it three weeks later.
Forty-Eight Hours
1981–1983
Key terms: PATCO, Striker replacement, Prime rate, Recession of 1981–82
At 7 a.m. on August 3, 1981, almost 13,000 air traffic controllers walked off the job.
Their union, PATCO, wanted better pay and shorter hours. Federal law banned strikes by federal workers.
PATCO had endorsed Reagan in 1980.
Ronald Reagan
…as president of my own union, I led the first strike ever called by that union.
Ronald Reagan
…if they do not report for work within 48 hours, they have forfeited their jobs and will be terminated.
August 5, 1981 The deadline passes
Two days later he fired more than 11,000 who stayed out, and barred them from the FAA for life.
Supervisors, military controllers and the few who hadn't struck kept the planes flying, with fewer flights.
Many historians call it a turning point for unions. More private employers began replacing strikers instead of bargaining with them.
Meanwhile the Federal Reserve, under Paul Volcker, had pushed interest rates to record highs to break inflation. The prime rate hit 21.5 percent.
Home builders mailed Volcker two-by-fours.
Help! Help! We Need You. Please Lower Interest Rates.
Car dealers mailed him coffins full of keys.
In late 1982, unemployment reached 10.8 percent, the highest since the Great Depression.
Then inflation broke: 13.5 percent in 1980, 3.2 in 1983. The economy came back fast. Carter had appointed Volcker; Reagan backed him when it hurt.
Morning Again
1983–1988
Key terms: Social Security Amendments of 1983, Deregulation, Geraldine Ferraro, Tax Reform Act of 1986
One block in the budget room was about to break: Social Security.
Without a fix, the checks would be late by July 1983.
A bipartisan commission found one. Higher payroll taxes, a retirement age rising slowly to 67, and a tax on some retirees' benefits.
Ronald Reagan
This bill demonstrates for all time our nation's ironclad commitment to social security.
Rescued, not shrunk.
Reagan also cut rules for business. A 1982 law let savings and loans make riskier loans with deposits the government insured.
Ronald Reagan
All in all, I think we hit the jackpot.
The deficits kept coming. The national debt nearly tripled in eight years. In 1985 America became a debtor nation for the first time since World War I.
So the president who cut taxes signed several tax increases, too.
By 1984, inflation was down and jobs were back.
It's morning again in America. Today, more men and women will go to work than ever before in our country's history.
Mr. Reagan will raise taxes, and so will I. He won't tell you. I just did.
Asked in a debate about his age, Reagan, 73, said:
I will not make age an issue of this campaign. I am not going to exploit, for political purposes, my opponent's youth and inexperience.
Reagan won 49 states.
In 1986 both parties rewrote the tax code. The top rate fell to 28 percent, and about six million low-income people stopped owing income tax.
The recovery was real. So was a widening gap between the richest Americans and everyone else.
Whose Family?
1980–1992
Key terms: Moral Majority, Roe v. Wade (1973), Affirmative action, Immigration Reform and Control Act (1986), Culture wars
The New Right had a second agenda: traditional values.
Jerry Falwell's Moral Majority brought evangelical voters into politics.
In 1992, Vice President Dan Quayle criticized a TV character, Murphy Brown, for
mocking the importance of fathers by bearing a child alone
A year later, The Atlantic ran an article called "Dan Quayle Was Right."
Reagan made Sandra Day O'Connor the first woman on the Supreme Court.
His later picks moved it right. It let states limit abortion, but it kept Roe v. Wade.
The Equal Rights Amendment died in 1982, three states short. A 1986 law gave legal status to about 2.7 million immigrants.
In June 1981, a government health bulletin described five young gay men in Los Angeles with a rare pneumonia. It was the first report of AIDS.
By the end of 1987, about 41,000 Americans had died of AIDS.
By the end of 1987, about 41,000 Americans had died of AIDS. By the end of 1995, almost 320,000 had.
Reagan first spoke about AIDS at length in 1987. His surgeon general, C. Everett Koop, a conservative evangelical, mailed this to 107 million homes.
Who you are has nothing to do with whether you are in danger of being infected with the AIDS virus.
What matters is what you do.
ACT UP said the government was moving far too slowly. Its poster took the pink triangle the Nazis forced on gay prisoners and turned it point up.
Why is Reagan silent about AIDS?
Turn anger, fear, grief into action.
Compare a 1988 book from Focus on the Family, a Christian ministry. It worries about how TV shows love and marriage, and teaches parents to model family at home. One demands that the government act. The other asks families to guard the home. Both argue over who defines a family.
At sunrise on October 11, 1987, volunteers unfolded the AIDS Memorial Quilt on the Mall. It had 1,920 panels, each about the size of a grave.
Read My Lips
1988–1994
Key terms: Savings and loan crisis, Americans with Disabilities Act (1990), New Democrat, NAFTA
Reagan left office very popular. His vice president, George H. W. Bush, ran in 1988 on one promise above all.
And they'll push again, and I'll say to them, 'Read my lips: no new taxes.'
George H. W. Bush
We as a people have such a purpose today.
George H. W. Bush
It is to make kinder the face of the Nation and gentler the face of the world.
The deregulated savings and loans collapsed. Cleaning them up cost taxpayers about $124 billion.
Deficits kept growing. In 1990 Bush and the Democratic Congress agreed to raise taxes, and the top rate went from 28 to 31 percent.
One New York paper's front page read: 'Read my lips: I lied.'
In March 1990, about sixty disability activists left their wheelchairs at the foot of these stairs and climbed them on their hands and knees. They wanted the House to pass the Americans with Disabilities Act.
George H. W. Bush
Let the shameful wall of exclusion finally come tumbling down.
The law banned discrimination against people with disabilities in jobs, transportation and public places.
After a recession, Bush lost in 1992 to Bill Clinton, the governor of Arkansas, who called himself a New Democrat.
You're going to hear a giant sucking sound of jobs being pulled out of this country.
Clinton pushed NAFTA through anyway, with more Republican votes than Democratic ones, over the unions' objections.
His plan to guarantee health insurance to every American died in 1994 without a vote.
In September 1994, 367 Republican candidates signed a Contract with America on these steps. That fall they won the House for the first time in forty years.
The Era of Big Government
1995–1996
Key terms: Government shutdown, Personal Responsibility and Work Opportunity Act (1996), Aid to Families with Dependent Children, Don't ask, don't tell, Political polarization
The new Congress and the president fought over the budget until the government shut down twice.
Bill Clinton
The era of big Government is over. But we cannot go back to the time when our citizens were left to fend for themselves.
People remember his first sentence and forget the second, the way they drop Reagan's first four words. Compare them. Both men promised less government. Both, in the next breath, promised not to leave people on their own.
In August, Clinton signed a welfare law the Republican Congress had written. It ended AFDC, the cash aid program begun in 1935. States got block grants instead. Adults had to work within two years, and aid stopped after five.
Conservatives had argued for years that welfare trapped people in poverty. Three of Clinton's own officials resigned in protest.
Go back to the budget room. It's 1996.
Fifteen years after Reagan promised to shrink it, the government was smaller at its edges and bigger at its center.
The arguments kept going: over free trade, over the safety net, over how closely to watch the banks. Someone will stand on these steps again and say what the government is for. The country is still answering.