Source: H.W. Brands. Reagan: The Life (2015)
20 January 1981, Inauguration Day: Outgoing President Jimmy Carter considered himself far more competent than the incoming President, Ronald Reagan. Carter still resented losing to Reagan in the Election of 1980; Carter's mood didn't improve in the least since the Iranian government refused to release the 52 American hostages as long as he was in office.
For the first time, a President was inaugurated on the West side of the Capitol Building. Only a handful of people have spoken to a larger crowd than Reagan on his first Inaugural. It was unseasonably warm and cloudy; but when Reagan reached the podium, the sun started to shine.
Reagan and his staff decided to cut taxes and get control of federal government spending. Reagan proposed to take the U.S. across the Rubicon with tax cuts ahead of spending cuts. Cutting taxes was the easy part, so Reagan and his staff decided to get those cuts through Congress first, saving the tougher battle on reducing government spending for later. David Stockman, the head of the Office of Management and Budget (OMB) suggested significant spending cuts in every Cabinet department except one . . . Defense. The Defense Department, under SecDef Caspar Weinberger, was able to get most of what it wanted due to Reagan's philosophy of building up the military in order to better deal with the USSR.
For the first time, a President was inaugurated on the West side of the Capitol Building. Only a handful of people have spoken to a larger crowd than Reagan on his first Inaugural. It was unseasonably warm and cloudy; but when Reagan reached the podium, the sun started to shine.
Reagan and his staff decided to cut taxes and get control of federal government spending. Reagan proposed to take the U.S. across the Rubicon with tax cuts ahead of spending cuts. Cutting taxes was the easy part, so Reagan and his staff decided to get those cuts through Congress first, saving the tougher battle on reducing government spending for later. David Stockman, the head of the Office of Management and Budget (OMB) suggested significant spending cuts in every Cabinet department except one . . . Defense. The Defense Department, under SecDef Caspar Weinberger, was able to get most of what it wanted due to Reagan's philosophy of building up the military in order to better deal with the USSR.
Presidents have influence on domestic affairs, but they have actual power in foreign affairs. That being said, Reagan in his first term had more influence on domestic affairs compared to most other Presidents, in that he was a believer in Theodore Roosevelt's "Bully Pulpit". Reagan believed that the "Bully Pulpit" gave him an advantage over the Legislative branch. Reagan was the most compelling and effective communicator as President since Franklin Roosevelt, and he knew it. Reagan knew how to read a room, and he was able to reach a vast audience through television. Reagan's message was always the same: smaller government and lower taxes.
On 18 February 1981, Reagan formally proposed his budget in the House of Representatives. Reagan stated that unless Congress acted now, the economy would get worse; America was experiencing double-digit unemployment and inflation at the same time ("Stagflation"). Reagan wanted a four-part plan passed by Congress. First, Reagan called for $498B in federal government spending cuts. Reagan went on to say that these were cuts in projected increases; there still would be an absolute increase of $41B in government spending. To some, it already appeared that the new President was weakening his stance on cutting federal government spending.
On 18 February 1981, Reagan formally proposed his budget in the House of Representatives. Reagan stated that unless Congress acted now, the economy would get worse; America was experiencing double-digit unemployment and inflation at the same time ("Stagflation"). Reagan wanted a four-part plan passed by Congress. First, Reagan called for $498B in federal government spending cuts. Reagan went on to say that these were cuts in projected increases; there still would be an absolute increase of $41B in government spending. To some, it already appeared that the new President was weakening his stance on cutting federal government spending.
Reagan further weakened his stance by announcing what areas of government would be exempted from spending cuts. Social safety nets such as Social Security and Medicare would be exempted. Reagan than announced that the Defense Department (pictured: President Reagan with his SecDef, Caspar Weinberger in 1981) would see increases in their budget; the President justified this decision by saying that the U.S. faced unprecedented challenges in terms of national security.
Federal aid for education would be cut, as would federal support for the arts. Concerning education, Reagan said that less federal money was a good thing, in that the cuts would lead to greater local control. Funding for the Energy Department's synthetic fuel research would be reduced, and the Import-Export Bank would lose 1/3 of their funding. Recipients of food stamps would be vigorously scrutinized in order to eliminate freeloaders. Medicaid payments to states would be capped, and the U.S. Postal Service would receive less federal money.
Federal aid for education would be cut, as would federal support for the arts. Concerning education, Reagan said that less federal money was a good thing, in that the cuts would lead to greater local control. Funding for the Energy Department's synthetic fuel research would be reduced, and the Import-Export Bank would lose 1/3 of their funding. Recipients of food stamps would be vigorously scrutinized in order to eliminate freeloaders. Medicaid payments to states would be capped, and the U.S. Postal Service would receive less federal money.
Part two of Reagan's proposed budget to Congress centered on tax cuts; specifically, Reagan wanted 10% across-the-board tax cuts. Every year for the next three years, taxes would be cut for all individual income taxpayers. Reagan disagreed that these tax cuts would increase inflation; like spending, these were cuts in projected tax increases. Reagan (pictured in February 1981; Reagan and David Stockman, Director of the OMB, to the right) argued that tax cuts would reduce inflation by increasing overall output, which then would lead to greater revenue for the federal government (that was basically what President Calvin Coolidge did in his administration).
Reagan predicted that the economy would not only recover under these tax cuts, but would be rolling along and expanding by 1985. Reagan also wanted to encourage investment in business by adjusting the complex-and-outdated tax brackets. But Reagan also stated that changing the tax brackets was a strategy that could be debated and implemented later.
Reagan predicted that the economy would not only recover under these tax cuts, but would be rolling along and expanding by 1985. Reagan also wanted to encourage investment in business by adjusting the complex-and-outdated tax brackets. But Reagan also stated that changing the tax brackets was a strategy that could be debated and implemented later.
Part three dealt with deregulation; Reagan believed that government regulation equaled hidden taxes. Reagan made it clear that no regulations would be removed that were essential for health and safety. But Reagan was clear that many government regulations would have to go, and there would not be any new regulations created. Reagan announced that Vice-President George Bush would lead a committee that would focus on government regulations.
Lastly was Monetary Policy; Reagan argued that to curb inflation, the growth of the money supply (MS) must be slowed. The Federal Reserve was not in the purview of the President, but Reagan wanted to clearly communicate that he wanted/expected cooperation by the Chairman of the Federal Reserve, Paul Volcker (pictured with Reagan in July 1981, just weeks after the attempted assassination on the President on 30 March 1981).
Not since the New Deal had a President presented such a sweeping economic program to Congress. It was Reagan's plan, but it required the assent of Congress; Reagan told Congress that the federal government must get out of the way of the American people in order to restore risk-taking, investment, consumer spending, and overall confidence in the economy.
Lastly was Monetary Policy; Reagan argued that to curb inflation, the growth of the money supply (MS) must be slowed. The Federal Reserve was not in the purview of the President, but Reagan wanted to clearly communicate that he wanted/expected cooperation by the Chairman of the Federal Reserve, Paul Volcker (pictured with Reagan in July 1981, just weeks after the attempted assassination on the President on 30 March 1981).
Not since the New Deal had a President presented such a sweeping economic program to Congress. It was Reagan's plan, but it required the assent of Congress; Reagan told Congress that the federal government must get out of the way of the American people in order to restore risk-taking, investment, consumer spending, and overall confidence in the economy.
Reagan enjoyed holding news conferences and dealing with reporters, at least in early years of his Presidency. Reagan took care to learn all of the names of the reporters that were assigned the White House as their primary beat. Reagan's mastery of details was much less than Carter, but his presence as President was far greater. The first press conference was one week after the Inauguration. Helen Thomas asked Reagan if he would punish or reconcile with Iran; Reagan answered that there would be no punishment, and no reconciliation.
Sam Donaldson of ABC News (the reporter that Reagan would come to detest the most) asked about his stance with the USSR; Reagan answered that the US would take a much harder line with the Soviets compared to recent Presidents. Walter Cronkite of CBS News (pictured at Reagan's left on 3 March 1981 - Cronkite was still "The Most Trusted Man in America") was just days away from retirement, and his last hurrah was interviewing Reagan on television. Cronkite asked if bashing the USSR would be productive, and Reagan responded that Leonid Brezhnev already wanted a US/USSR summit. Reagan further commented that he was in no hurry for a US/USSR summit, in that he needed to talk with America's allies in advance. Reagan went on to say that the summit could be canceled if the USSR misbehaved.
Sam Donaldson of ABC News (the reporter that Reagan would come to detest the most) asked about his stance with the USSR; Reagan answered that the US would take a much harder line with the Soviets compared to recent Presidents. Walter Cronkite of CBS News (pictured at Reagan's left on 3 March 1981 - Cronkite was still "The Most Trusted Man in America") was just days away from retirement, and his last hurrah was interviewing Reagan on television. Cronkite asked if bashing the USSR would be productive, and Reagan responded that Leonid Brezhnev already wanted a US/USSR summit. Reagan further commented that he was in no hurry for a US/USSR summit, in that he needed to talk with America's allies in advance. Reagan went on to say that the summit could be canceled if the USSR misbehaved.
Despite a comfortable White House routine in terms of personal and Presidential activities (Reagan LOVED creating and keeping schedules), both the President and the First Lady, Nancy, felt confined, and very often went to Camp David on weekends to be outdoors. Fridays and Saturdays were movie nights at Camp David; the favorites of the President and First Lady were the classic "oldies" from their time in Hollywood . . . they watched more modern movies with much less enthusiasm.
The Reagans returned to the White House on Sunday afternoon, and they already missed Camp David. To the Reagans, Camp David was more soothing and comforting than Rancho del Cielo, their ranch in California. That being said, every few months, Air Force One would whisk the President and First Lady to their ranch in California . . . reporters and cameras were banned. By late-March 1981, President Ronald Reagan had developed a White House routine that he loved to follow, and he was able to
re-energize at Camp David on weekends (pictured: President Reagan and Vice-President George Bush on a trail at Camp David in 1981).
On 30 March 1981, Reagan addressed the leaders of the Building and Construction Trades Department of the AFL-CIO at the Washington Hilton, just up Connecticut Avenue from the White House . . . the President had no way to know that John Hinckley, Jr. was lying in wait to assassinate Reagan in order to impress the teen-aged actress Jodie Foster . . .
The Reagans returned to the White House on Sunday afternoon, and they already missed Camp David. To the Reagans, Camp David was more soothing and comforting than Rancho del Cielo, their ranch in California. That being said, every few months, Air Force One would whisk the President and First Lady to their ranch in California . . . reporters and cameras were banned. By late-March 1981, President Ronald Reagan had developed a White House routine that he loved to follow, and he was able to
re-energize at Camp David on weekends (pictured: President Reagan and Vice-President George Bush on a trail at Camp David in 1981).
On 30 March 1981, Reagan addressed the leaders of the Building and Construction Trades Department of the AFL-CIO at the Washington Hilton, just up Connecticut Avenue from the White House . . . the President had no way to know that John Hinckley, Jr. was lying in wait to assassinate Reagan in order to impress the teen-aged actress Jodie Foster . . .