Lou Cannon: Obama’s Reagan Transformation?

Since the day Barack Obama was elected, many voices have urged him to combine the bold stimulus policies of Franklin D. Roosevelt with the inspirational message of change provided by John F. Kennedy. But the presidential exemplar that may be most useful to President Obama as he seeks to jump start the economy is a Republican whose single-mindedness in his first months in office enabled him to gain the confidence of the American people and approval of his proposals from a Congress he did not control.

That president is Ronald Reagan, whose long-term goals were different from Mr. Obama’s but who was also willing to put pet projects on the back burner in the cause of economic recovery. In 1980, Reagan campaigned against President Jimmy Carter on a mix of issues, while giving priority, as Mr. Obama did in 2008, to a sagging national economy. “Are you better off than you were four years ago?” Reagan asked over and over again.

The campaign was conducted against the backdrop of Americans held hostage by Iranians in the American Embassy in Tehran; they were released on Reagan’s inauguration day after being held for 444 days. One Reagan adviser, Edwin Meese, said later that the release of the hostages was a stroke of good fortune for the incoming administration, since this issue would have been a distraction and a priority had they remained in captivity.

As it was, economic recovery became the exclusive early Reagan agenda. The president was further encouraged by a detailed private memo from Richard Nixon, then too much of a pariah to appear in public with Republican office holders. Reagan valued the former president’s experience, particularly on foreign policy, but the memo instead urged him to focus on economic policy for at least the first six months. “Unless you are able to shape up our home base it will be almost impossible to conduct an effective foreign policy,” Nixon wrote. Reagan was so impressed that he quoted the opening portion of Nixon’s memo to a friend and added: “If we get the economy in shape, we’re going to be able to a lot of things. If we don’t, we’re not going to be able to do anything.”

Reagan didn’t face a walk in the park. The unemployment rate in 1980 was 7.1 percent, almost exactly the same as now. Inflation, averaging 12.5 percent for the year, and the prime interest rate, averaging over 15 percent, were much higher. Public confidence was low. Speaking to the nation on behalf of his economic program on Feb. 5, Reagan said the nation was in “the worst economic mess since the Great Depression.” On Feb. 12, he called for an audit of the nation’s economy. On Feb. 18, 1981, Reagan addressed a joint session of Congress on his program for economic recovery.

Unlike Barack Obama, Reagan did not enjoy solid Congressional majorities. Reagan had a narrow majority in the Senate, partly because of his own campaign coattails, but the Democrats under Speaker Tip O’Neill controlled the House. To get his budget and tax bills through the House, Reagan needed support from conservative Democrats, many of them from Texas, known as “Boll Weevils.” Reagan and his White House chief of staff James A. Baker relentlessly wooed them. At Mr. Baker’s suggestion, Reagan even promised he would not campaign in 1982 against any Democrat who voted for his economic program. This did not set well with Republican officials in Texas, but Reagan got the votes and kept his word.

Social conservatives who had backed Reagan soon became restless. On March 26, the Senate Majority leader, Howard Baker, said that he had agreed to keep social issues like abortion off the floor for a year so that senators could concentrate on Reagan’s economic program. Baker was promptly assailed by the favorite son of the right, Senator Jesse Helms. Asked about this deal in an interview with The Washington Post, Reagan sided with Baker. It was the last interview that Reagan would give for months, for he was shot by a would-be assassin on March 30, the bullet narrowly missing his heart. During his recovery, the White House trio of Ed Meese, James Baker and deputy chief of staff Michael Deaver, kept the administration focused tightly on economic recovery.

President Obama, in contrast to many Democrats, understands the nature of Reagan’s appeal. During the 2008 campaign he drew fire from the Clintons for calling Reagan a “transformative” president. In his book “The Audacity of Hope,” he wrote that Reagan’s appeal went beyond his skills as a communicator. “Reagan spoke to America’s longing for order,” Mr. Obama wrote, “our need to believe that we are not simply subject to blind, impersonal forces but that we can shape our individual and collective destinies, so long as we rediscover the traditional virtues of hard work, patriotism, personal responsibility, optimism and faith.” And he seems to have channeled more than Reagan’s oratory — President Obama’s decision to pull the family-planning provision out of the stimulus package nicely mirrors Reagan’s decision to hold off on abortion and other social issues.

Reagan’s plan for economic recovery traveled a rocky road. The budget and tax bills were enacted, but the nation endured a grim downturn in 1981 and ’82 before the back of the recession was broken by the fiscal policies of the Federal Reserve under Paul Volcker, a Wall Street banker and Carter appointee who nonetheless got Reagan’s full backing and, in a wonderful twist of history, is now a key member of the Obama economic team.

“Stay the course,” became Reagan’s mantra during the economic low point of his presidency. It could well become President Obama’s rallying cry in the months ahead.

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