by H. W. Brands
Reagan spoke again. “Let me tell you what I have in mind,” he said. “We are the leaders of the Western world. We haven’t been for years, several years, except in name, but we accept that role now. I am talking about action that addresses the allies, and solicits—not begs—them to join in a complete quarantine of the Soviet Union. Cancel all licenses. Tell the allies that if they don’t go along with us, we let them know—but not in a threatening fashion—that we may have to review our alliances.” The president cited Franklin Roosevelt. “I am thinking back to 1938 when there was a great united effort opportunity. In a speech in Chicago, FDR asked the free world to join in a quarantine of Germany. On that request his brains were kicked out all over.” No one in the room commented that Reagan (again) had confused crucial details about the quarantine speech. Instead, they listened to him tell a story from Hollywood, about how Warner Brothers had made a movie, Confessions of a Nazi Spy, that irritated studios seeking to continue to show movies in Hitler’s Germany. The studios tried to suppress the film, but Warner stuck to its guns. “The film was run and had as much impact as anything” in alerting the world to Hitler’s evil designs, Reagan said.
Historical analogies apart, the United States needed to stand up for its principles, Reagan said. “If we show this kind of strength, and we have labor and the people with us, if we demand that Solidarity get its rights—if that happens”—if Solidarity got its rights—“nothing will be done. But if not, then we invoke sanctions. And those who do not go along with us will be boycotted, too, and will be considered to be against us.” Reagan scoffed at the sanctions imposed by the Carter administration against Moscow after the invasion of Afghanistan. “The wheat and Olympic actions were ridiculous,” he said. “It is time to speak to the world.”
Don Regan joined John Block and Al Haig in trying to soften the stridency at this meeting. “We want to send some message,” he said. “But we do not want to incite street fighting.” Regan thought allied support essential for effective sanctions, if things came to that. “Al has to have time to get our allies on board without bullying them. Show them where we stand and where we are heading. This takes time.”
Haig seconded Block’s concern about going all in at once. The Soviets were still uncertain about what they might do on Poland, the secretary of state said. “If you now slap on a full court press, then they can say to themselves they have nothing left to lose.”
“That doesn’t bother me at all,” Reagan replied. The president clearly wanted to move decisively. “If we don’t take action now, three or four years from now we’ll have another situation and we’ll wonder why didn’t we go for it when we had the whole country with us? I’m tired of looking backward.”
George Bush shifted toward the middle ground. “I agree with Don and Al,” he said. “We should take the time to consult, but giving a speech now is essential. What is missing is moral leadership.” Bush urged Reagan to do what he did best. “You should state how strongly you feel about Walesa, about Solidarity, about the Polish ambassador and about the Polish people. You can speak in generalities without spelling out details.” Bush rephrased Reagan’s position, saying, “We are at an emotional turning point.”
Weinberger pushed forward again. “My worry is that we will wait too long because a single ally can hold us back,” the Pentagon chief said. “If there is moderation in the Soviet position, the way to find out is not to hold back, but to make the speech, then if there are no results, spell out the specifics of what we will do.”
Haig didn’t like making even veiled threats unless a decision had been made to follow through if the Russians didn’t respond. “We are not dealing with giving a speech but with setting policy,” he said. “I would never give a speech unless we are prepared to act. From my viewpoint, I don’t think we are in such a bad position now.”
“No, no litany of items is to be recited,” Reagan replied. “But what we should say is an overall expression that what we will do is an absolute quarantine of all trade as President Roosevelt had proposed in 1938.”
“To warn them again is an empty threat,” Haig rejoined. “When you speak, it should be to inform them that you have decided to do something.”
Jeane Kirkpatrick jumped in. Reagan had made the Georgetown pro fessor ambassador to the United Nations, where she lectured almost as regularly as she had on campus. “Mr. President, you must tell the truth,” she said. “You must stand by the central core of this administration.” Kirkpatrick noted that conservative pundits, starting with columnist George Will, were complaining that the president had been silent and inactive. Reagan needed to correct this impression. “One of our objectives is to prevent our own demoralization by inactivity,” Kirkpatrick said. “It made me ill this morning to read a Post article on Afghanistan where the Afghans are still fighting Soviet tanks with ancient rifles. Perhaps one of the things we can do is more effective aid to Afghanistan. We don’t have to talk about it—just do it.”
Ed Meese wanted the group, and the president especially, to consider the range of measures an embargo or quarantine should entail. “Are we going to cut off all trade?” Meese asked. “Part of trade? All communications, including flights and telephones? Are we going to cut diplomatic and political contacts? Are we going to recall our ambassador?”
“We have all these things we can do,” Reagan responded. “We don’t have to let them out.” He drew the line at closing the embassy, however. “We would have to give back the seven Christians that are there,” he explained, referring to dissidents who had taken refuge in the embassy. “We should also keep arms limitation negotiations going for the time being,” he added, “but be prepared to walk out.”
Haig agreed that the embassy should stay open. “We don’t want to close our embassy or break diplomatic contact,” he said. “We don’t want to get into a World War III scenario.” Haig reminded the group how important Poland was to Moscow. “Let us make no mistake. This is a matter of life and death for the Soviet Union. They would go to war over this.”
Caspar Weinberger thought Haig was being melodramatic. “The Soviets may take military actions against Poland,” the defense secretary said, “but this is not world war.”
The president said he wanted to write a letter to Leonid Brezhnev. The letter would remind the Soviet leader of what was at stake in the event of sanctions. “It could address the fact that they haven’t been able to provide their people the living standard they would like and that they would be in an even worse plight without trade,” Reagan said. “We could say that we cannot continue trade and that we will press our allies to follow us unless the Polish situation is alleviated. But again holding out our hand. Can he envision what it would be like if trade with the West were open? It would be a different, much better world. He can have that one, giving up nothing, or the one that will result if we are forced to take trade-cutting sanctions.”
Reagan rarely made decisions in large meetings like this. He hadn’t made a decision on Poland when Ed Meese informed him that he was fifteen minutes late for a session with a visiting women’s group. Reagan rose to go, joking on his way out: “Remember, everyone, stock up on vodka!”
THE NEXT DAY Reagan met with the Polish ambassador and his wife, who had defected following the imposition of martial law. The ambassador praised the U.S. government for the moral support it had offered over the years; he specifically mentioned Radio Free Europe and said he hoped it would continue broadcasting for many more years. He then asked a favor. “Mr. President,” he said, “would you light a candle and put it in the window tonight for the people of Poland?”
Michael Deaver, who was present at the meeting, recounted the response. “Right then, Ronald Reagan got up and went to the second floor, lighted a candle, and put it in the window of the dining room. Later, in what I still recall as the most human picture of the Reagan presidency, he escorted his guests through the walkway and out to the circular drive on the South Lawn of the White House. In a persistent rain, he e
scorted them to their car, past the C-9 Secret Service post, holding an umbrella over the head of the wife of the Polish ambassador, as she wept on his shoulder.”
The following evening the president made Poland the centerpiece of his Christmas address to the American people. “As I speak to you tonight, the fate of a proud and ancient nation hangs in the balance,” he said. “For a thousand years, Christmas has been celebrated in Poland, a land of deep religious faith. But this Christmas brings little joy to the courageous Polish people. They have been betrayed by their own government.” The violence and mass arrests under martial law made a mockery of the Polish government’s pledges in the United Nations charter, the Helsinki Accords on human rights, and even its own Gdańsk agreement of the previous year. As before, Reagan blamed the Soviets. “It is no coincidence that Soviet Marshal Kulikov, chief of the Warsaw Pact forces, and other senior Red Army officers were in Poland while these outrages were being initiated. And it is no coincidence that the martial law proclamations imposed in December by the Polish government were being printed in the Soviet Union in September.” The Jaruzelski regime targeted Solidarity but in doing so assaulted the entire country. “By persecuting Solidarity the Polish government wages war against its own people.”
Reagan, like Carter a year earlier, offered the carrot of economic aid, should the Polish government rescind martial law and release the arrested, and the stick of sanctions. He emphasized the latter. “If the outrages in Poland do not cease, we cannot and will not conduct business as usual with the perpetrators and those who aid and abet them,” he said. “Make no mistake, their crime will cost them dearly in their future dealings with America and free peoples everywhere. I do not make this statement lightly or without serious reflection.” Some sanctions were being imposed already, Reagan said. Shipments of agricultural products to the Polish government were being suspended, though food aid could continue through private humanitarian organizations. Credit insurance through the Export-Import Bank was being terminated. Landing privileges for Polish planes at American airports and fishing privileges for Polish ships in American waters were being canceled. The administration was working with America’s allies to curtail technology exports to Poland. “These actions are not directed against the Polish people,” Reagan explained. “They are a warning to the government of Poland that free men cannot and will not stand idly by in the face of brutal repression.”
The president revealed that he had written to Jaruzelski urging him to withdraw the martial law order. Reiterating that Moscow bore a “major share of blame” for the events in Poland, he said he had sent a letter to Brezhnev as well. “In it, I informed him that if this repression continues, the United States will have no choice but to take further concrete political and economic measures affecting our relationship.”
Reagan asked the American people to join him in expressing support for the Polish people. “Yesterday, I met in this very room with Romuald Spasowski, the distinguished former Polish Ambassador who has sought asylum in our country in protest of the suppression of his native land. He told me that one of the ways the Polish people have demonstrated their solidarity in the face of martial law is by placing lighted candles in their windows to show that the light of liberty still glows in their hearts.” Reagan told of the candle he had placed in the window. “I urge all of you to do the same tomorrow night, on Christmas Eve, as a personal statement of your commitment to the steps we’re taking to support the brave people of Poland in their time of troubles.”
POLAND’S TROUBLES SERVED as Reagan’s first real test on foreign policy. They gave him an opportunity to move boldly against the Soviets, and they sorely tempted him to do so. But ultimately the caution that marked most of his decisions set in here as well. He recognized, on second and third thought, that his leverage with the Kremlin on Poland was sharply limited. He couldn’t take stern action without doing more harm to Americans and Poles than to the Soviets. He certainly wasn’t going to risk war over the jailing of Polish dissidents. In the end, his substantive response to the martial law declaration didn’t go beyond the measures he described in his Christmas speech. And the Polish government, with Soviet backing, persisted in its suppression of Solidarity.
Yet the crisis in Poland enabled Reagan to do what he always did best: state the case for freedom against those who would suppress it. His words didn’t free any prisoners, but the Poles and others heard Reagan’s call for Polish self-determination, and many took heart from his support.
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AT HOME THE battle of the budget continued. December brought little holiday cheer. David Stockman’s projections grew more dire by the week. And Reagan grew more dismayed. “We who were going to balance the budget face the biggest budget deficits ever,” he wrote in his diary for December 8. The mounting tsunami of red ink frightened fiscal faint hearts, but Reagan refused to retreat from his tax cuts. For the moment most of his administration agreed with him. He met with his Council of Economic Advisers on December 10. “While one or two spoke of possible tax increases after 1982, the others (majority) said no,” he noted. “Tax increases don’t eliminate deficits; they increase government spending.”
Reagan, like Don Regan, blamed the recession on the tight money decreed by Paul Volcker and the Federal Reserve. Reagan met with Volcker and tried to get him to loosen up. He failed. “I’m not sure he sees the need to let the increase in money supply go forward,” he wrote after the meeting. “This recession is because they slammed the door in April and kept it closed until September—almost October.” He hoped Volcker would change his mind. “Our plan will get the economy moving only if the Fed allows.”
As the deficit projections continued to swell, Reagan encountered increasing pressure from traditional conservatives to raise taxes. “Met with Senate leaders who are beginning to panic on taxes,” he wrote. “They want us to raise or impose new ones. I’m resisting. D--n it, our program will work, and it’s based on reduced taxes.”
Reagan worked his team harder than ever to reduce spending, to ease the tax-hike pressure. But Congress refused to trim much of anything except defense. “They’re so used to spending (for votes),” he observed, “they’re getting edgy with ’82 being an election year.”
One by one Reagan’s own advisers concluded that new taxes were unavoidable, given the daunting deficit and the uncooperativeness of Congress. “The recession has worsened, throwing our earlier figures off,” Reagan wrote in late December. “Now my team is pushing for a tax increase to help hold down the deficits.” Yet Reagan dug in his heels the harder. “I’m being stubborn,” he wrote. “I think our tax cuts will produce more revenue by stimulating the economy. I intend to wait and see some results.”
He grew lonelier as the calendar turned. He met with Republican House leaders in the second week of January. “Except for Jack Kemp they are h--l bent on new taxes and cutting the defense budget,” Reagan observed after the meeting. “Looks like a heavy year ahead.”
DON REGAN STOOD by Reagan longer than anyone else. The Treasury secretary listened impatiently as Bob Dole, the Republican chairman of the Senate Finance Committee, explained that Congress would insist on new revenues to reduce the deficit. Dole was spouting the same line the legislature always used, Regan concluded. “In other words, Capitol Hill, which in fiscal year 1982 had mandated spending $128 billion more than Treasury was receiving in taxes and other revenues, claimed it wanted more money so that it could balance the books and start over again with a clean slate. This Orwellian argument did not make sense to me in practical terms or in terms of the president’s promises to bring government spending under control and cut taxes.” To acquiesce in new taxes would destroy the positive effect of the hard-won tax cut, Regan believed. “It meant sacrificing not only the tangible benefits of this measure, but also its symbolic meaning.” Nor would a tax increase have the effect its advocates predicted. “Suppose the president could somehow renege on his promise to reduce taxes without inflicting mortal damage on his p
olitical credibility, what then? I was convinced that an increase in taxes, coupled to a monetary policy that was already starving business of capital, would make our economic troubles worse. An economy could not expand if it was burdened by new taxes at the moment when it was already all but overwhelmed by high interest rates that devastated profits and eliminated millions of jobs.”
This last point was the critical element, Regan contended. “In my judgment, having 8 or 9 million unemployed was worse than having a deficit of $128 billion”—the current Stockman estimate. Regan thought an obsession with deficits could hamstring the administration and sabotage the economy. “I did and do believe that deficits did not matter in the short run,” he said, “if in the long run the economy generates sufficient revenues to pay off the deficits, and the rate of government spending is controlled in such a way that it is consistently less than the real growth of the economy.” The key was consistency over the long term—and help from the Fed. “The deficit could be reduced and confidence could be restored if a slow, steady increase in the money supply”—which he continued to work on Volcker about—“was accompanied by a controlled rate of federal spending.” A resort to new taxes would spoil everything. It would eliminate the pressure on Congress to agree to spending limits, the sine qua non of a long-term balanced budget. And it would undermine such progress as had been painfully made toward ending the recession.
Regan urged the president to stick to his tax cuts and ignore the deficit until the economy recovered. “It was better to borrow money to finance the deficit while the economy recovered and people went back to work than to impose taxes that would cripple the recovery or prevent it altogether. I never have believed, and never will believe, that increasing taxes is a cure for recession.”
REGAN’S RECOMMENDATION TO ignore the deficit carried the administration further across the Rubicon that guarded the Italy of fiscal responsibility from the Gaul of unconditioned tax cuts. Regan was a money man, and if he gave permission to set budget balance aside, who was the president to contradict him?
