Magazine | March 22, 2010, Issue

Rowing Upstream

The political difference between Reagan and Obama is that the former gave the public what it wanted

In the wake of Barack Obama’s 2008 election, John Judis of The New Republic declared that the country had completed a Democratic realignment — that American politics had fundamentally shifted to the left. Accordingly, Judis argued, President-elect Obama and his Democratic allies should act boldly:

Americans, to be sure, are always reluctant to undertake ambitious government initiatives. . . . But, as [Franklin] Roosevelt discovered when he was elected, a national crisis creates popular willingness to entertain dramatic initiatives. Moreover, Obama will not face the same formidable adversaries that Jimmy Carter and Bill Clinton had to confront. The Republican Party will be divided and demoralized after this defeat.

President Obama heeded Judis’s advice — and, as a result, his domestic agenda has been stalled for more than a year. With the exception of the wasteful stimulus bill, he and his Democratic allies have been unable to push their reforms through Congress. They have failed to pass a cap-and-trade bill, education reform, and their leftist overhaul of the health-care system. President Obama’s tenure has so far been characterized by legislative gridlock — with Republicans united in opposition to the president and Democrats badly fractured.

Obama’s first-year record of legislative achievement stands in stark contrast to that of Ronald Reagan. Within months of taking office, Reagan signed into law the Economic Recovery Tax Act (ERTA) of 1981. The ERTA remains the most important piece of domestic legislation of the last 40 years; it cut tax rates across the board and indexed them to inflation.

The contrast between Reagan and Obama presents an interesting puzzle. Why was one so successful in achieving his principal domestic-policy reform while the other has failed to date? After all, both entered office with large victories; Reagan defeated Jimmy Carter by ten points, while Obama defeated John McCain by seven. This question becomes all the more curious when one considers that Obama’s party has majorities in both chambers, while Reagan had to deal with a House of Representatives controlled by the opposition.

The explanation involves three important factors. Reagan’s electoral appeal was geographically broader than Obama’s; Reagan’s domestic reforms addressed a pressing need, while Obama’s have ignored such needs; and Reagan’s campaign specifically advocated the reforms he would ultimately sign into law, while Obama’s campaign positions were vague and often different from what he has promoted as president.

First, while it is true that Obama’s popular-vote margin nearly matched Reagan’s, the latter’s victory was substantially broader. Reagan won 489 of 538 electoral votes, while Obama won 365. Additionally, Reagan won 308 House districts, while Obama won 242. This difference is relevant when it comes to pushing legislation through Congress. Reagan could say to 308 representatives and 88 senators, “Your constituents voted for me, which obliges you to support my legislative program.” Obama cannot make that argument to nearly as many members of Congress. Also, though the Democrats controlled the lower chamber in 1981, that control depended on conservative southern Democrats, who often backed the Gipper.

Second, Reagan’s major domestic initiative addressed a more pressing need than Obama’s does. As David Brady and Craig Volden argue in Revolving Gridlock, the economic crunch of the 1970s was good for federal coffers but bad for average voters:

Inflation had a positive effect on the budget because as inflation rises, wages and prices rise, pushing taxpayers into higher brackets and thus increasing the amount of revenue collected by the government. . . . The rise of inflation, however, had a down side from a politician’s viewpoint. Taxpayers knew that, despite their higher salaries, they had less real income; and taxpayers on fixed incomes were hurt by increased taxes on private property.

#page#In other words, “bracket creep” was a major problem for the average household when Reagan assumed office. In fact, there was a full-blown tax revolt brewing. The people of California had enacted Proposition 13 in 1978, limiting the amount of money the government could collect in the form of property taxes. Plus, a Gallup poll conducted in July 1980 found that 54 percent of Americans favored a 10 percent reduction in federal income taxes. The ERTA addressed precisely this demand. That is why Gallup found in August 1981 that nearly 60 percent of Americans who had heard of President Reagan’s tax reductions supported them.

Now consider President Obama’s major domestic initiatives. The most pressing public problem today is, without doubt, rampant joblessness. Yet the president has largely focused on health care and global warming instead. The latter ranks near the bottom in lists of voter concerns. As for the former, voters’ worries about health care are centered on rising premiums — a problem the Democrats’ proposal does not solve. Instead, the president and his congressional allies have emphasized expanding coverage. While this is a noble goal, the fact remains that if the Democrats have their way, most voters will not see their primary concern addressed.

Third, Reagan’s agenda during the campaign matched the agenda he pursued as president. He made tax cuts a top priority from the beginning. For instance, in his nomination-acceptance address in Detroit, Reagan mentioned taxes 16 times, at one point specifically laying out his plan:

I have long advocated a 30 percent reduction in income-tax rates over a period of three years. This phased tax reduction would begin with a 10 percent “down payment” tax cut in 1981, which . . . I have already proposed.

This pledge tracks very closely with the policies Reagan implemented through the ERTA.

On the other hand, President Obama’s nomination-acceptance speech in Denver mentioned health care only six times, and never got into specifics. What’s more, Obama has since flip-flopped on two critical health-care policies. During the primary campaign, he opposed then-senator Hillary Clinton’s plan to require all Americans to purchase health care. At a debate in South Carolina, Obama said:

A mandate means that, in some fashion, everybody will be forced to buy health insurance. . . . But I believe the problem is not that folks are trying to avoid getting health care. The problem is they can’t afford it. And that’s why my plan emphasizes lowering costs.

Candidate Obama also opposed the “Cadillac tax” on high-end insurance plans. During the general-election campaign, he criticized McCain at a campaign stop in Newport News, Va.:

John McCain calls these plans “Cadillac plans.” Now in some cases, it may be that a corporate CEO is getting too good a deal. But what if you’re a line worker making a good American car like the Cadillac? What if you’re one of the steelworkers who are working right here in Newport News, and you’ve given up wage increases in exchange for better health care?

Well, Senator McCain believes you should pay higher taxes too. The bottom line: The better your health-care plan — the harder you’ve fought for your good benefits — the higher the taxes you’ll pay.

Today, Obama advocates both an insurance mandate and a “Cadillac tax.”

All these differences favor Reagan, whose political position in 1981 was far superior to Obama’s today. More broadly, they show why not all election landslides constitute electoral realignment, despite the fervent wishes of Judis and other liberals. As he finds himself adopting many of the positions for which he once derided John McCain, what’s really undergoing a realignment is Barack Obama.

– Mr. Cost is the author of the HorseRaceBlog at RealClearPolitics.com.

Jay Cost — Jay Cost is the author of The Price of Greatness: James Madison, Alexander Hamilton, and the Creation of American Oligarchy.

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