Both sides in debt talks invoke Reagan

WASHINGTON -- Ronald Reagan might as well be sitting in on the troubled debt talks, so frequently is his memory invoked by both sides.

But for different reasons.

Conservative Republicans praise the 40th president's steely advocacy for smaller government and lower taxes.

President Barack Obama and his Democratic allies praise Reagan because, they say, he was the sublime compromiser, willing to work with Democrats such as House Speaker Thomas P. "Tip" O'Neill of Massachusetts to forge landmark tax and Social Security deals and willing to raise the federal debt ceiling so the government could keep borrowing to pay its bills.

Can both be true? In fact, both camps are experiencing a touch of amnesia.

Debt talks between Obama and House Speaker John Boehner came to a halt Friday when Boehner broke them off, raising new uncertainties that a deal could be struck to avert a threatened government default.

Reagan did push through deep, across-the-board cuts in tax rates in his first year of his presidency in 1981. But the following year he signed the largest peacetime tax increase in U.S. history. He raised taxes in every succeeding year of his presidency except the last.

"There was a consistency to Reagan on taxes, which was basically that he cut them when he could, but raised them when he had to," said economist Bruce Bartlett, a senior policy analyst in the Reagan White House and a top Treasury official under President George H.W. Bush.

Bartlett noted Reagan's tax increases took back about half of his signature 1981 tax cut. 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. Tax revenue is forecast to be just 14.4 percent of the GDP in 2011.

Also, during Reagan's two terms, he presided over 18 increases in the debt ceiling.

Meanwhile, according to House Majority Leader Eric Cantor (R-Va.), Obama ended a recent meeting saying, "Can you imagine Ronald Reagan sitting here?" It was an apparent suggestion that Reagan would have been more accommodating or less likely to engage in political trench warfare.

The facts: The big 1980s domestic-policy deals cited by Obama happened at a time when there were more politically moderate members in both parties than in these highly polarized times, and when congressional leaders had more flexibility in finding common ground.

Also, while Reagan himself did not engage as much in the day-to-day bargaining, he and O'Neill clearly liked each other and enjoyed socializing.