Guess who said this:
“The full consequences of a default – or even the serious prospect of default – by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar.”
President Obama? Treasury Secretary Tim Geithner? No, Ronald Reagan, in a 1983 letter to then-Senate Majority Leader Howard Baker. And yet GOP Sen. Jim DeMint called Geithner a “Chicken Little” for issuing an almost identical warning against undermining America’s global creditworthiness.
The Republicans have come a long way since Ronald Reagan occupied the Oval Office – and it’s mostly been downhill.
Winning no prizes for statesmanship is House Majority Leader Eric Cantor, who argues that it’s more important to prevent the government from raising a penny more in tax revenue than to prevent it from going bankrupt and defaulting on its debts. He says Republicans are making a major concession to Obama just by considering his request to raise the debt ceiling.
The Gipper must be rolling in his grave. Unlike Cantor, he didn’t worry that doing his public duty might be construed as a favor to his political opponents. Reagan was no fan of higher taxes either, but he manned up and raised them when that became necessary to corral federal deficits and restore fiscal responsibility.
What would Reagan do today? The best way to answer that is to look at what he actually did do as president.
First, Reagan pushed through the giant 1981 tax cut that marked America’s first misbegotten experiment with supply side economics. Whatever stimulative effect it may have had was soon overwhelmed by Fed Chairman Paul Volker’s decision to raise interest rates to wring inflation out of the economy. America suffered a harrowing recession in 1982, and federal deficits exploded.
Reagan urged the nation to “stay the course,” but on taxes he changed course. In 1982, when unemployment stood at 10.1 percent, he signed the Tax Equity and Fiscal Responsibility Act, which increased taxes by around one percent of GDP. Irate conservatives blamed the baleful influence of Senate Majority Leader Bob Dole. A young GOP backbencher and bombthrower, Newt Gingrich, famously called Dole “the tax collector of the welfare state.”
That was something of a bad rap, however, since Reagan ended up raising taxes a total of 11 times during his presidency. Unlike today’s Republicans, he believed fiscal discipline was more important than supply side theories and he understood that compromise is crucial to advancing national interests. In his second term, Reagan embraced a Democratic proposal to broaden the tax base by closing loopholes, and use the savings to bring rates down. The Tax Reform Act of 1986 simplified the tax code by drastically reducing the number of deductions and the number of tax brackets.
Reagan’s determination to not let deficits get too far out of hand continued under his successor. President George H.W. Bush even broke his “read my lips” pledge in 1990, pushing a deficit reduction package that cut spending by $324 billion and raised revenues by $159 billion over five years. Many conservatives were apoplectic, but Bush’s brave move helped put America on track toward the budget surpluses that President Bill Clinton achieved in the late 1990s.
Tea Party Republicans reject that legacy – even though it led to the balanced budget they are now loudly demanding. As conservative NYT columnist David Brooks wrote recently, that’s a radical departure from the party’s tradition of fiscal rectitude as well as the political give and take that makes democratic politics work.
It’s also repudiation of Reagan, the man conservatives love to venerate and name airports after but, as it turns out, honor in the breach when it comes to protecting the full faith and credit of the United States.
Photo Credit: Brett Tatman

The stock market plunged over 150 points yesterday as Republicans hardened their stance in debt reduction talks with the White House. The sharp drop was a timely reminder that a political failure to raise the debt ceiling would be a body blow to America’s already weak economy.
As negotiations in Washington over a prospective debt limit increase stall and sputter, the process is not exactly getting an assist from Republican presidential candidates. With the exception of Mitt Romney and Jon Huntsman, the field is joining conservative activists demanding that congressional GOPers hold the line against any revenue increases as part of a solution in favor of huge domestic spending cuts. Romney hedged his bets by signing onto the notorious “cut, cap and balance” pledge to oppose any debt limit increase not associated with big immediate spending cuts, a permanent limitation of federal spending to a fixed (and much lower) percentage of GDP, and a balanced budget constitutional amendment with a supermajority requirement for tax increases. Using his pledge signature as cover, the former governor is
Recently released
The “invisible primary” of Republican presidential candidates positioning themselves to become the Wingnut alternative to Mitt Romney is now getting close to its first major landmarks: the “closing of the field” when Republicans stop fantasizing about late entries who will shake up the race, and the August 13 Iowa State GOP straw poll, which will likely end the campaigns of poorly financed also-rans who can’t show significant grassroots support in Iowa or other early states.
Being a campaign finance reformer in the era of Citizens United is good for job security and bad for one’s sense of personal achievement. Most people agree that the need for sweeping reform is greater than ever and most people fear that it’s harder than ever to achieve. “Most people” are right.
To some extent, Bachmann’s notoriety flows from her willingness to say outrageous things for which she has absolutely no evidence. The Pulitzer Prize-winning fact-checking service PolitiFact
While ordinary Americans celebrate the start of summer warm weather and bemoan the lack of progress on a deficit reduction deal in Congress, members of Congress themselves have been gearing up for the July 4th recess by engaging in a different sort of Washington pastime–by raising money.
Yesterday, Jim Arkedis, director of PPI’s National Security Project, gave his
Ideological litmus tests have always been a big feature of Wingnut World, with Americans for Tax Reform chief Grover Norquist’s “pledge” against support for tax increases being the most famous example. Grover’s pledge has been in the news lately, as Senate Republicans grappled with the question of whether a vote to kill tax incentives for ethanol development would run afoul of Norquist, who has always demanded that any revenue-enhancing action to close off a tax loophole be paired with a tax cut to make the action revenue-neutral.
Both the House of Representatives and the president have shown that when it comes to Libya, NATO is not the only organization susceptible to bouts of friendly fire. A bipartisan group of ten congressmen
In the era of big money, it is a familiar, if sobering, theme in modern presidential administrations, and this week President Obama’s administration took its turn.
It’s been a bad month for cap and trade.
It’s a nostrum of American politics that presidential candidates do best by first playing to the party base in competitive primaries, but then “moving to the center” to appeal to swing voters in close general elections. As a result, one of the strategic pitfalls for candidates is to go “too far” in the primaries in a way that makes “moving to the center” impossible.