by H. W. Brands
Presidents have influence in domestic matters rather than power. Patronage provides one form of influence; favors for friends and allies help grease the gears of government. But the most important form of influence, for those able to exercise it, comes from a president’s monopoly of what Theodore Roosevelt called the bully pulpit. Presidents command the attention of the country merely by being president; those who can communicate their views in compelling fashion have an advantage over everyone else in the legislative loop.
Reagan was the most compelling communicator in American politics since Franklin Roosevelt, and he knew it. His mastery of the rhetorical art reflected his long experience as an actor and public speaker. His years with General Electric taught him to read a room; his time before the camera trained him to see an audience beyond the camera. He mixed humor and pathos, philosophy and anecdote.
But his greatest strength was the focus he brought to his task. His message never changed. Details varied according to context, but the basic pitch was always the same: smaller government and lower taxes.
ON FEBRUARY 18, Reagan mounted the pulpit to pitch his budget proposal. He spoke in the House of Representatives to a joint session with the Senate, but he aimed equally at the millions watching on television. He summarized the grim state of the economy by citing a midwestern worker who had told him, “I’m bringing home more dollars than I ever believed I could possibly earn, but I seem to be getting worse off.” He reiterated that the country had reached its moment of truth. “We can no longer procrastinate and hope that things will get better. They will not. Unless we act forcefully—and now—the economy will get worse.”
He challenged Congress to enact a four-part plan. Part one targeted government spending. He called for $49 billion in cuts, although he immediately qualified this. The Democrats had preemptively criticized Reagan for eviscerating programs on which millions of Americans depended; he rebutted the criticism by pointing out that the spending reductions were reductions in projected increases. “We’re only reducing the rate of increase,” he said. The $49 billion decrease for 1982 would still allow an absolute increase of $41 billion over 1981.
If this weakened the thrust of his argument, he weakened it further when he explained what he was exempting from cuts. “We will continue to fulfill the obligations that spring from our national conscience,” he said. “Those who, through no fault of their own, must depend on the rest of us—the poverty stricken, the disabled, the elderly, all those with true need—can rest assured that the social safety net of programs they depend on are exempt from any cuts.” Social Security and Medicare, along with veterans’ pensions and programs for the disabled, would be spared.
Then there was the Defense Department. “It’s the only department in our entire program that will actually be increased over the present budgeted figure,” Reagan announced. The increase was necessary because America faced unprecedented challenges to its security. “Since 1970 the Soviet Union has invested $300 billion more in its military forces than we have.” Reagan didn’t mention that this figure was disputed, reflecting problematic estimates of wages and prices in the Soviet Union and conversions of rubles to dollars. Instead, he stressed what he took to be the figure’s significance for American security and consequently for the American defense budget. “To allow this imbalance to continue is a threat to our national security.”
Having exempted such big-ticket programs as Social Security, Medicare, and defense from cuts, Reagan explained where his ax would fall. Federal aid to education would be reduced, as would federal support for the arts. But there was a silver lining here, Reagan said, for reduced aid to schools would reduce federal control over schools and restore it to the states and local school boards, where it belonged. Cuts in aid to the arts would encourage the charitable giving that had historically supported the arts in America.
Reagan ticked off other cuts. The Department of Energy’s synthetic fuels program would be terminated; private industry could do a better job developing the fuels of the future. The Export-Import Bank would lose a third of its funding; again Reagan relied on the private sector. The Economic Development Administration would be zeroed out, for similar reasons. The Trade Adjustment Assistance program duplicated existing unemployment benefits; it would go. Recipients of food stamps would be more rigorously scrutinized to eliminate those who didn’t genuinely need the nutritional help. Federal rules for welfare would be tightened and work requirements increased to ensure that the program served those who needed it and not those who didn’t. School breakfast and lunch programs would be means-tested. Medicaid payments to states would be capped. The Postal Service would learn to live on a smaller subsidy. NASA and the space program must become more cost-effective.
Part two of Reagan’s program was tax cuts. “Our proposal is for a 10-percent across-the-board cut every year for three years in the tax rates for all individual income taxpayers, making a total cut in the tax-cut rates of 30 percent,” he said. He realized that conventional wisdom among economists said that cutting taxes at a time of high inflation would simply drive inflation higher, by fueling demand. He disagreed. For one thing, like the spending cuts, the tax cuts were cuts only in projected increases. Taxes would continue to rise from current levels. For another, the conventional Keynesians were wrong, Reagan judged. Without uttering the phrase “supply side” or mentioning any supply-siders by name, he referred to “a solid body of economic experts” who contended that tax cuts would reduce inflation by expanding output. “I’ve had advice that in 1985 our real production in goods and services will grow by 20 percent and be $300 billion higher than it is today. The average worker’s wage will rise in real purchasing power 8 percent, and this is in after-tax dollars.”
Beyond the across-the-board tax cuts, Reagan proposed to accelerate depreciation of business expenses, to encourage investment. He wanted to index tax brackets to adjust for inflation, but this worthy reform would have to await another day. He didn’t state explicitly that indexing would dramatically increase the projected federal deficit; experts understood this, and others didn’t know what they were missing. For similar reasons, other reforms—of the marriage penalty, of inheritance taxes—would also have to wait.
Part three of Reagan’s plan was deregulation. Reagan agreed with conservative economists who likened government regulations to hidden taxes, and he believed regulations should be cut along with other taxes. He disavowed any intention of removing regulations essential to the health and safety of Americans. But many others could be dispensed with and should be. He said he had declared a moratorium on new regulations by the executive branch and was convening a cabinet-level task force, headed by Vice President Bush, to undertake a comprehensive review of existing regulations.
The fourth and final part of Reagan’s economic plan dealt with monetary policy. “In order to curb inflation we need to slow the growth in our money supply,” Reagan said. He acknowledged that monetary policy wasn’t, strictly speaking, within the purview of the president. “We fully recognize the independence of the Federal Reserve System and will do nothing to interfere with or undermine that independence.” But he wanted to let the Fed chairman, Paul Volcker, and the rest of the Fed board know the White House was watching and expected cooperation in reforming the economy.
REAGAN PAUSED TO let his listeners catch their breath. He realized that no economic program so sweeping had been presented to the legislature since the New Deal. It was his plan, but it required the lawmakers’ assent. “I’m here tonight to ask you to join me in making it our plan,” he said. “Together we can embark on this road.” The room burst into applause, loudest from the Republican side but with many Democrats joining in. Reagan ad-libbed: “Thank you very much. I should have arranged to quit right here.” The lawmakers laughed.
But he had a bit more to say. “Together we can embark on this road, not to make things easy, but to make things better. Our social, political, and cultural, as well as our economic institutions, can no l
onger absorb the repeated shocks that have been dealt them over the past decades. Can we do the job? The answer is yes. But we must begin now.” There was nothing wrong with the American economy that Americans, acting together, couldn’t fix. Government must do its part. Yet the results would rest with the American people, once they were freed to do what they did best.
Reagan repeated his stock theme of the greatness of the American people. “The substance and prosperity of our nation is built by wages brought home from the factories and the mills, the farms, and the shops,” he said. “They are the services provided in ten thousand corners of America—the interest on the thrift of our people and the returns for their risk-taking. The production of America is the possession of those who build, serve, create, and produce.” Government must simply get out of the people’s way. And it must do so at once. “The people are watching and waiting,” he told the lawmakers.
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MARGARET THATCHER HAD had her eye on Reagan for years. “I had met Governor Reagan shortly after my becoming Conservative Leader in 1975,” the British prime minister later wrote. “Even before then, I knew something about him because Denis”—her husband—“had returned home one evening in the late 1960s full of praise for a remarkable speech Ronald Reagan had just delivered.” Thatcher got a copy of the text and was equally impressed. She arranged to meet Reagan at first chance. “I was immediately won over by his charm, sense of humour and directness.” She followed his rise in American politics and kept reading his speeches. “I agreed with them all.”
British voters were quicker to appreciate Margaret Thatcher’s virtues than American voters were to reward Reagan’s; she became prime minister in the spring of 1979, eighteen months before he was elected president. British Conservatives, or Tories, shared the small-government predilections of American Republicans, and Thatcher was the most forthright, indeed combative, of the Tories. She tackled the British welfare state, slashing spending and reducing red tape. She challenged British labor unions, provoking strikes that caused the entire economy to shudder. But she held her ground until the strikes collapsed and the unions’ power was broken. She privatized public utilities, undoing decades of growth of the government’s hold on the British economy.
Her stern policies took a toll on her popularity. In late 1980 her job approval rating sank to depths not visited by any prime minister before her. Number 10 Downing Street, the prime minister’s residence, became a lonely place. Her convictions never wavered, yet she valued her steadfast supporters more than ever, and she welcomed the ascendance of a kindred spirit across the Atlantic.
She sent congratulations on Reagan’s election and laid plans to visit Washington as soon as possible, consistent with the dignity of her office. Inquiries were made, and she was delighted to learn that she was the first foreign leader the president-elect wished to see after assuming office. Travel arrangements were made and diplomatic briefings held. She grew expectant and somewhat anxious as the time neared. “Mrs. T told me that she was a little worried by her forthcoming visit to Washington,” Nicholas Henderson, the British ambassador to Washington, recalled. “She did not quite see how it would go. She admitted to being nervous about it. She looked drawn—pale and rather distinguished. I did my best to reassure her, telling her how welcoming Reagan would be and how much he was looking forward to her arrival. I told her about the Californian gang who had come to Washington. We went through the programme. She was somewhat taken aback when I said that her after-dinner toasts would be televised. ‘Then I shall have to think about them very carefully,’ she said, adding, ‘I shall want all the best historical advice I can get so as to get the allusions just right.’ ”
She asked about gifts: What would the Reagans like? They decided on Halcyon boxes. “As we became more and more involved in the plans of the visit, the worries seemed to flow off her and she became less taut,” Henderson said. He grew aware that Thatcher saw the American visit as a break from the labor and political troubles at home; in Washington, at least at the White House, her conservative views would be valued and shared. “It was noticeable how little we talked about the substance of her discussions with Reagan. She was rather clear that she wanted to see him alone for a few moments, and then in a restricted meeting—the fewer the better, but she did not give me the impression that she had decided upon what subjects she wished to focus.”
She flew to Washington at the end of February. Reagan greeted her on the White House lawn. A color guard provided pageantry; both leaders gave speeches extolling the special relationship that existed between America and Britain. They adjourned to the Oval Office, where they spoke privately for half an hour. They were then joined by their foreign ministers, Alexander Haig and Lord Carrington, and things grew more formal again. Larger entourages surrounded them in the Cabinet Room. Thatcher noticed the jelly beans on the table; Reagan said they came in thirty flavors, including peanut. “ ‘We haven’t yet had time to take them out,’ he quipped, referring of course to Carter’s background as a producer of peanuts,” Henderson commented.
Thatcher talked of relations between the democratic world and the communist sphere. The evolving crisis in Poland was one point of contention, turmoil in Central and South America another. Reagan responded, “The villain in Central and South America is the same as confronts the world at large.” Thatcher nodded. Henderson observed of Reagan, “He went on, his head shaking slightly, his voice quite deep and with a frequent smile, very charming and very unBismarckian: ‘The U.S. has tried a variety of programmes that were and look like our plan. But we looked like the Colossus of the north. We will now try a new approach to bring the continents together.’ I didn’t really know what he meant.”
REAGAN’S PLAN FOR Central America would unfold over time; for now the two leaders concentrated on getting to know each other better. The president and Nancy Reagan hosted a dinner at the White House; the Thatchers reciprocated with a dinner at the British embassy. “Rather to my disappointment the President did not ask Mrs. T to dance, though we had provided plenty of what we thought was appropriate music, such as ‘Dancing Cheek to Cheek’ and ‘Smoke Gets in Your Eyes,’ ” Henderson remarked after the British dinner. “I am not sure why. It is possible that he may not have known in advance that dancing would be going to take place and did not therefore know whether it would have been in order to have started. Oddly, at the White House party the previous evening, he had accompanied the Thatchers to the door to say goodbye and had then returned to the party to dance with Mrs. Reagan.”
Thatcher was disappointed too. “After the Reagans had left the embassy party a number of guests departed but Mrs. Thatcher stayed chatting and watching the dancing,” Henderson said. “She had said to me in London beforehand that she hoped people would not rush away, which was why we had arranged to have a band. Nobody asked her to dance. So I went up to her and said, ‘Prime Minister, would you like to dance?’ ” His gallantry was appreciated. “Mrs. T accepted my offer without complication or inhibition, and, once we were well launched on the floor, confessed to me that that was what she had been wanting to do all the evening. She loved dancing, something, so I found out, that she did extremely well. Long afterwards I read that one of the few frivolous things she did as an undergraduate at Oxford was to learn ballroom dancing. The band showed great brio, and I think Mrs. T was happy.”
Other than the dancing, Henderson thought the dinner went well. Reagan seemed relaxed and engaging. “He shook hands and had a friendly remark for everyone. How excellent he is at that.” At their table the president and the prime minister exchanged toasts. “Mrs. T used most of the text I had prepared for her, including the jokes, but interjected a long passage about the courage needed at two o’clock in the morning when you woke up aware of all the problems confronting you,” Henderson said. Reagan laughed at the jokes but especially appreciated the personal reflection. “Later, Michael Deaver, who works in the White House and is close to the Reagans, vouchsafed to me, without any prompti
ng, that the president had been moved by Mrs. T’s embassy speech, especially the passage about two o’clock courage.”
The visit, as a whole, was a rousing success. “Despite the UK’s economic difficulties, the visit resulted in great exposure for Mrs. T, even more than planned, and in more favourable media coverage for her and the UK than the circumstances really warranted,” Henderson observed. “She returned to a very different type of reception in the UK where unemployment and bankruptcies accumulate, and there are widespread doubts within her cabinet and party about her policies. I think that her acclaim in the USA may have helped to restore her.”
A parting personal touch by Reagan confirmed the bond that was developing between the two leaders. “On the last morning the Reagans invited the Thatchers to go to the White House for a farewell cup of coffee on their way to the helicopter,” Henderson said. “This was intended, I am sure, as a gesture of friendship because they had already had plenty of opportunity for chitchat at the successive dinners.” Henderson was pleased to note that Reagan’s spokesman seconded his opinion of the affinity between the two leaders. “Brady, the White House press secretary, said after the visit was over that it had been ‘difficult to prise them apart.’ ”
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