In the May 21 New York Times, business writer Dave Leonhardt argued that “Congress and the White House have completed 16 months of activity that rival any other since the New Deal in scope or ambition.” Citing the stimulus bill, health care, education, and the pending regulation of Wall Street, Leonhardt concluded that Democrats are ushering in a “generation shift in how Washington operates,” and that Obama “looks more like the liberal answer to Ronald Reagan.”
Leonhardt makes a persuasive case for a transformational Obama presidency, which raises the question why so few progressives share this perspective. I think the reason is that while Obama and the Democratic Congress have achieved major gains, there is a entire other range of critical issues — the record military budget, increased troops in Afghanistan, inaction on both comprehensive immigration reform and EFCA, the absence of a major job creation program — where change is missing. This leaves Obama’s “remaking” far less sweeping than Ronald Reagan’s achievement in 1981.
As we look at the successes of President Obama and the Democratic Congress against almost unanimous Republican opposition, it is easy to conclude that they have fulfilled voters mandate for “Change.” But the gap between what Ronald Reagan achieved with a Democratic-controlled House in 1981 and Democrats gains since 2009 is striking, and explains why many progressives question whether Washington is being “remade.”
Reagan’s Sweeping 1981 Tax and Budget Changes
Despite Democratic successes over the past 16 months, President Reagan’s 1981 tax and budget measures still dominate the nation’s political landscape. The wealthiest Americans now pay barely half (36%) of the 70% income tax rate in effect when Reagan took office, and Obama will only allow this to rise to 39.6 % when the Bush tax cuts expire.
The 2011 tax code backed by Obama and the Democratic Congress will still be closer to the 1981 version than that that existed during America’s great prosperity of the 1950’s — when much the wealthiest paid much higher taxes.
Reagan’s 1981 budget also remains largely in effect. This budget devastated domestic programs while dramatically boosting military spending — a sharp reversal in the nation’s spending priorities that remains under Obama.
For example, Reagan’s 1981 budget slashed federal housing spending, preventing the government from addressing rising homelessness throughout the 1980’s. Obama has appointed a virtual “dream team” of affordable housing advocates at HUD, but they are unable to reverse the legacy of Reagan’s draconian cuts at HUD. Reagan’s 1981 budget was so transformative that HUD inflation-adjusted funding remains closer to 1981 levels than before, which is why widespread homelessness has persisted since the Reagan years — and has continued under Obama.
Reagan’s budget goal in 1981 was to starve domestic programs while boosting military spending. And this legacy continues.
The U.S. military budget continues to exceed that of all potential enemies combined, while funding for a wide variety of domestic programs is closer to 1981 levels than that enjoyed prior to Reagan.
Obama will slow the growth of military spending, but will not create a “peace dividend” to fund domestic programs. And his escalation of troops in Afghanistan is consistent with longstanding U.S. military policy, both in its mission and the ignoring of its steep cost at a time when domestic programs are suffering.
Progressives also question Obama’s “transformative” impact due to the failure of many of his gains to permeate people’s daily lives.
In 1981, the public knew that taxes had been slashed and domestic programs cut. But other than the health care bill, which clearly qualifies as transformative despite its lack of a public option, Obama and the Democrats’ other successes are not obvious to many if most Americans.
The student loan bill was the most sweeping in history, and will save taxpayers billions. But it will not return us to the days when students got grants rather than loans to pay for most of their educational expenses, and when these grants or loans covered a far greater share of college costs.
It’s great that the government will soon re-regulate Wall Street. But whether the public sees itself as personally benefitting is unclear.
Similarly, while the stimulus bill was the best package Obama could politically obtain, it pales in comparison to the needs in a nation with a 10% unemployment rate. The stimulus bill was hardly the type of transformative jobs/public works bill that progressives hoped for after electing Obama.
The public does recognize a dramatic difference between Obama and his predecessor. And if deviation from the policies and attitudes of George W. Bush defines a “transformative” presidency, than Obama has clearly met this test.
But it’s premature to claim that a “generational shift in how Washington operates” has occurred. And while Obama is trying to reverse growing income inequality since Reagan, there is a long way to go before the wrongheaded and selfish policies of the Reagan era are reversed.
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