In the House of Representatives three decades ago, Newt Gingrich befriended the apostle of supply-side economics, Rep. Jack Kemp (R., N.Y.). Gingrich didn’t wed himself to the theory as Kemp did, but he used it as a tool to accomplish a larger goal: a Republican majority in the House.
In 1977, Kemp and Sen. William Roth (R., Del.) introduced a bill to cut income-tax rates by 30 percent across the board. A year later, Gingrich endorsed the proposal in his first successful bid for Congress.
It was a wholehearted endorsement. “The first thing he said to me after I walked into his office was ‘Do you know about the Kemp-Roth tax cut?’” says Frank Gregorsky, who interned on Gingrich’s campaign. “‘That’s what we need to rebuild this whole party around.’”
“He was totally into supply-side economics at that point,” says Carlyle Gregory, his campaign manager in 1978.
One aspect of the supply-side philosophy that appealed to Gingrich was the Laffer curve. “It took you outside the normal politics,” Gregory explains. “In the normal politics, you tax more because we need to build all this stuff. It was quite revolutionary to say, ‘Gee, if you cut taxes, you’ll get more revenue.’”
After Gingrich was elected to Congress, he became a vociferous advocate of Kemp’s policies. In 1980, he added to the pressure on Ronald Reagan to incorporate Kemp’s bill into his platform.
“Kemp was able — with Newt’s help — to convince the Reagan team to adopt the Kemp-Roth tax cut as part of the Reagan package,” remembers former congressman Ed Bethune (R., Ark.). “We were all very excited about that.”
When Congress passed Reagan’s tax cuts in August 1981, it was a joint victory. Yet there was a subtle difference between the two. While Kemp was a devotee of the theory behind supply-side economics, Gingrich was less interested in the academic minutiae.
“He didn’t have any particular interest in economics at that time,” says Bruce Bartlett, staff economist for Kemp in 1977.
No, Gingrich was more interested in something else: building a Republican majority in the House of Representatives.
Gregorsky, who served as Gingrich’s chief of staff from 1981 to 1983, agrees. “He never was big on the theory of supply-side economics,” Gregorsky says.
“That was not Newt’s religion,” adds Tucker Andersen, a longtime friend of Gingrich’s.