While many commentators have focused on President George H.W. Bush and his infamous decision to raise taxes in 1990, an equally important, though often neglected, example is President Ronald Reagan, who agreed to raise taxes in 1982, 1983, and 1986. If Republicans want to seriously tackle deficit reduction, they will have to remember Reagan's full legacy -- not simply his decision to cut income taxes in 1981.
During Reagan's his first year as president, he demonstrated his commitment to conservative principles by pushing through Congress a historic tax reduction in 1981 that brought rates to their lowest level since World War II. Although Democrats initially opposed the tax cuts as an irresponsible act that would provide huge benefits to the wealthiest Americans, the administration won over Democratic support in the House by allowing them to attach all sorts of provisions like increasing the child care credit.
But soon after, a more pragmatic side of the president was revealed. When Reagan dramatically increased the size of the defense budget and failed to curb domestic spending, the size of the federal deficit started to skyrocket. Some Senate Republicans, including Majority Leader Robert Dole, started to apply pressure on the White House to raise taxes. House Democrats insisted that they would not cut spending unless Reagan dealt with the tax side of the fiscal ledger.
The president, who was unhappy about raising taxes and who realized that it would cause anger on the right, agreed to support Dole. This wasn't a surprise for anyone who knew Reagan's record. As governor of California, Reagan had agreed to the largest tax increase in the state's history to deal with the $200 million deficit.
In private meetings with legislators in 1982, Reagan argued that tax increases were needed to lower the deficit and win over enough Democratic support in the House to pass spending cuts. The president, according to Sen. Howard Baker, proclaimed "without any equivocation his total support" for the tax bill. During a tense meeting with members of the House, New York Rep. Jack Kemp, who had joined a group of conservatives fighting against the tax bill, bluntly told the president the bill was a poor idea.
Reagan responded that if the congressman desired more domestic spending cuts, he would have to support the tax increase in order to get sufficient Democratic votes. When Kemp warned Reagan that he should not be a "leader of a minority within a minority," (Kemp argued that even most Democrats were not calling for tax increase) the congressman was "taken to the woodshed" by the president according to one unidentified staffer in attendance, the Los Angeles Times reported.
In August, Reagan signed the Tax Equity and Fiscal Responsibility Act, which increased taxes on business and added new excise taxes on tobacco and alcohol and other goods. Reagan made the same kind of choice the next year. In 1983, as part of an agreement to shore up the short-term fiscal stability of Social Security, Reagan did it again when he agreed to legislation that increased payroll taxes.
During his second term, Treasury and Congress tackled the thorny issue of tax reform. Proponents argued that tax reform was necessary to make the system more economically efficient and fair. The Tax Reform of 1986 simplified the rate structure and closed many loopholes. It remained revenue neutral by lowering rates in exchange for the loopholes that were eliminated. But as a result of the bill, many interests were hit with higher taxes. Reagan stood behind the measure and was instrumental to its passage.
In the end, Reagan survived these decisions politically. Although many conservatives complained at the time, Reagan won bipartisan support. He displayed a type of political flexibility and pragmatism that allowed him to build a domestic record in a Washington where power was divided between the two parties and where not all Republicans agreed that unlimited tax cuts were a good thing for the nation.
Many of today's Republicans are proving to be much more ideologically rigid than their icon Ronald Reagan. Norquist is castigating and isolating a staunch conservative for saying what is rather obvious -- deficit reduction can't actually happen without raising taxes given that there are political and practical limitations to how much of government can be eliminated. Most of the major plans to come from the GOP have simply ignored this reality. Or others, like Paul Ryan, have obfuscated the fact that their plans would require tax increases on the middle class through tax reform.
We'll learn whether Republicans are serious about deficit reduction when they are faced with deciding on tax increases. The ultimate response of the GOP to the debate over Coburn's comments will reveal whether fiscal conservatism is really integral to the party or whether it is primarily rhetoric used to justify large reductions in the welfare state.