Congress Did Not Cause Reagan's Debt

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Reagan's Budgets and the National Debt

Contrary to Republican claims, "The Democratic Congress" did not bust Reagan's budgets. In fact, for the first six years, Congress was not Democratic, it was half and half, and the Republican Senate had just as much say, even though the budget bill starts in the House. On top of that, Reagan got the Southern Democrats to vote with him and so he controlled the House too.

But none of this matters because over Reagan's 8 years, Congress approved smaller budgets than he requested on average, and the deviation from what he requested averaged less than half a percent. He raised the debt by $1,860 billion and Congress reduced his budgets by $16 billion. Otherwise he would have raised the debt by $1,876 billion.

So why do Republicans repeat this lie so often? Silly question, isn't it.

New Data: Congress Reduced Reagan's Budgets slightly.

September 20, 2010. OK, I finally tracked down exactly what Congress did. There were a few scattered cites on the web to a mysterious House report from 1992, but I could never find it, so I was using ultra-conservative data to be cautious.

But a few days ago, I pulled together my best clues and wrote to the help desk at the Library of Congress. They nailed it in less than a day. Amazing. There is no such report, but they found a table with that name that is published annually and has all the budget results going back to the 1920s or so. Here it is from the government printing office.

The upshot is that Congress actually appropriated less than Reagan's budget requests on average and also less then G.H.W. Bush's. Only by about 0.5%, but Congress shares no blame with Reagan.

I also checked stories in Time magazine

and the NYTs for the first Reagan budget, which the supply-siders and Reaganites claim was the big over-run by Congress. Totally wrong. First of all the Senate (with equal say) was Republican, and second, lots of the Southern Dems sided with Reagan and they massacred the more liberal Dems. This budget was only 1/2 a percent high, and it was the Republicans' that did it. The Dems lost.

Was it Really the Democratic Congress?

Reagan won the 1980 presidential election claiming the national debt was at an all time high of $1 trillion, and he would bring it down. It was almost that high, but compared to the size of the American economy it was the smallest it had been in over 50 years. It just looked big because of inflation, but Reagan either did not understand inflation or enjoyed his little deception.

Beyond dispute is the fact that eight years later, when he left office, the debt was $2.6 trillion. "When a conservative says it is bad for the government to spend more than it takes in, he is simply showing the same common sense that tells him to come in out of the rain." (Reagan, 1977) By his own standard, he showed an amazing lack of common sense.

To cover for him, Republicans often blame his deficits on the Congress. So I went to the most extreme pro-Reagan website

and used their numbers for how Congress changed Reagan's budgets.

Now, a lot the pork Congress added was added by Republicans, and it's entirely possible that these numbers are exaggerated, but let's accept them as the gospel and blame the budget changes entirely on Democrats. What do the numbers say?

The annual budget changes are $51, $35, −$11, $6, $17, $10, $40 and $50 billion dollars. And that adds up to $200 billion which is $0.2 trillion. But Reagan grew the debt by over $1.6 trillion. Hmmm. So the pro-Reagan site talks of a "compounding increase of 2.8% every year during the 8 budget years." In fact the extra Congressional debt would have carried a 12.8% interest rate in Reagan's first fiscal year, falling to 8.8% in his last year. That increases the damage supposedly inflicted by the Democrats to $290 billion ($0.29 trillion). But that still barely makes a dent in Reagan's gigantic deficits.

How did the pro-Reagan site miss this? They "forgot" that the debt comes from causing "the government to spend more than it takes in," just as Reagan said. They looked only at spending. What caused most of the problem was Reagan's tax cuts for the rich.

He may have had no intention busting the budget, but there can be no question that he is entirely to blame for knocking America off course—way off course—from its 43-year bipartisan march toward paying off the debt that pulled us out of the great depression and helped us win World War II.

From the W. Bush White House: The Reagan-Bush Debt Explained
"The traditional pattern of running large deficits only in times of war or economic downturns was broken during much of the 1980s. In 1982 [Reagan's first budget year], partly in response to a recession, large tax cuts were enacted. However, these were accompanied by substantial increases in defense spending. Although reductions were made to nondefense spending, they were not sufficient to offset the impact on the deficit. As a result, deficits averaging $206 billion were incurred between 1983 and 1992. These unprecedented peacetime deficits increased debt held by the public from $789 billion in 1981 to $3.0 trillion (48.1% of GDP) in 1992." [emphasis added]

From "Historical Tables, Budget of the U.S. Government, Fiscal Year 2006." Downloaded from www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf. Page 5.

http://zfacts.com/p/57.html | 01/18/12 07:19 GMT