Monday, July 25, 2011

Reagan and the Debt Ceiling

Tom Raum points out that not only did Reagan raise net federal taxes but that the debt ceiling had to be raised 18 time during his term in office.

When he left office in 1989, federal taxes accounted for 18.4 percent of the nation's gross domestic product, compared with the 18 percent average for the two decades before he took office. By contrast, tax revenues are forecast to be just 14.4 per cent of GDP in 2011.

Some tea party-courting Republicans cite Reagan's low-tax, small-government mantra as they insist they won't support any increase in the government's borrowing power past Aug. 2, unless significant budget cuts are made and taxes kept constant.

Yet during Reagan's two terms, he presided over 18 increases in the debt ceiling. He even publicly scolded Congress for playing hardball politics with the debt limit and bringing the nation "to the edge of default before facing its responsibility." That's a passage the White House and congressional Democrats are now fond of recycling to their advantage.