Taxation

In Reagan's own view, changes in federal tax policy constituted a major part of his legacy. As he put it in his memoirs, "With the tax cuts of 1981 and the Tax Reform Act of 1986, I'd accomplished a lot of what I'd come to Washington to do" (Reagan 1990, 335). There is a widespread perception, encouraged by subsequent conservative commentators and Republic on politicians, that by pursuing a vigorous policy of cutting taxes, Reagan unleashed the productive energies that from 1983 to 1989 produced the longest period of continuous economic growth in American history. However, the actual Reagan tax legacy has been a good deal more complicated.

Some things Ronald Reagan wanted have endured. The deep, across- the-board reduction on federal income tax rates of 1981 has remained largely intact. So too has the cut in the top marginal tax rate (70% when he took office, 28% when he left, and now 35%). Likewise, the indexing of tax rate brackets has prevented inflation from automatically pushing taxpayers at all levels into higher brackets. Not least of all, the 1986 Tax Reform Act that Reagan championed did produce a major broadening of the base in the federal income tax by eliminating a mass of tax deductions, exemptions, and credits for special interests, especially business tax shelters. It also removed 6 million low-income workers from income tax liability. Since then, more loopholes have crept back into the tax code, but much of the general broadening of the income tax base has endured (Brownlee and Steuerle 2003).

Nonetheless, Reagan's efforts did not change other central features of federal taxation. As a percent of national income, the federal government's role in extracting tax resources from the economy remained essentially unchanged during the 1980s (19.4% in 1980 and 19.3% in 1989). This is because, having in 1981 achieved the largest tax cut in American history, President Reagan in 1982 and 1984 signed some of the largest tax increases in American history to try to cope with the ballooning budget deficit.

Likewise, despite partisan claims to the contrary, the progressivity of the federal tax system changed little as a result of Reagan's tax policies. Because they pay the largest dollar amounts in taxes, taxpayers at the highest income levels naturally have gained the most from cuts in the top marginal income tax rates. But across the whole range of the income distribution, the effective federal tax rate from the lowest to the highest fifth of families scarcely budged from 1980 to 1991 (Steuerle 1992, 194-96).

Taking a broader view, it seems fair to say that the stimulus for continued economic growth after 1983 came less from tax reductions and more from the huge federal budget deficits produced by Reagan's defense buildup and the maintenance of the large domestic entitlement programs. As noted earlier, these deficits continued throughout the Reagan years to triple the national debt, and this helped keep the economy growing.

Alongside these financial realities, Reagan's unrelenting rhetoric on the harmful effects of federal taxes had important consequences for another kind of reality consisting of political perceptions. Reagan's appeal to and continuous fomenting of anti- tax sentiments helped make any idea of increasing taxes to pay for programs an absolute no-go area for all other politicians. And the powerful, populist appeal of this single-minded message has continued to resonate in every political debate down to the present day. Taking a broad view, I think it is fair to say that Reagan's presidency enhanced Americans' deficit tolerance as well as their tax aversion. Living through the Reagan years, citizens were taught to indulge their already well-developed habit of short-term thinking. Profits from the U.S. trade deficit could be used by foreigners to purchase the federal debt that was financing our budget deficits. Americans could consume and Washington could spend without anyone having to pay their way through higher taxes. Twenty years after Ronald Reagan left office, and with even larger mountains of unfunded debt facing our children, we have yet to face up to that legacy of sunny, short-term thinking (or more accurately, nonthinking) and its dire consequences for our national future (Yarrow 2008).

Although Ronald Reagan always publicly advocated the virtues of a balanced budget, when it came time to choose, holding the line on deficits always lost out to his other priorities. Vice President Dick Cheney was making a political, not an economic, point when he allegedly argued early in George W. Bush's administration that "Reagan taught us that deficits don't matter." Reagan showed that the public does not punish or reward politicians because they increased or decreased the deficit. The red ink did not seem to matter.

However, there was, and remains, not only a fiscal but also a political shortsightedness in Cheney's lesson drawing. Eventually the growing deficit led to the federal government's 1990 budget crisis. This created the pressures that led to the breaking of the "read my lips-no new taxes" promise that wrecked George H.W. Bush's presidency among Reagan Republicans. The mounting deficit also helped launch the third-party candidacy of Ross Perot. Together, these political reactions in turn probably sheared off enough Republican votes in 1992 to put Bill Clinton in the White House. In this roundabout but not random way, Ronald Reagan was a major force in creating the Clinton presidency. Such are the ironies in assessing a political legacy.

The long view yields a final irony. President Reagan's success in cutting income tax rates and broadening the tax base helped defuse hostility to a federal income tax system that had increasingly become seen as burdensome and unfair. Lower individual rates made the system appear less onerous, and the 1986 reform removing special preferences made it seem more fair. The ultimate consequence was to shore up the political acceptability of our current federal income tax system. By doing so, Reagan helped reduce the chances of any more fundamental tax reforms, such as a flat tax or consumption tax.

National Security

For many years into the future, scholars will be debating Ronald Reagan's legacy in ending the Cold War. That is not an issue I can hope to settle here.

What I can do is identify some long-term implications of Reagan's approach to national security policy. It was a distinctive and remarkably consistent approach throughout his political career. In important respects it flew in the face of the prevailing opinion of the time. But eventually Reagan bent much of that opinion in his direction.

Throughout his political career, Reagan remained almost exclusively focused on the threat to America's security posed by the Soviet Union and its aggressive communist ideology. In three essential ways, Ronald Reagan came to Washington rejecting the Cold War as he found it-and as most experts and opinion leaders thought it must be.

* First, Reagan rejected the notion that America's ultimate response to the communist threat should be containment or detente. The goal was defeat of this enemy and victory for the cause of freedom, which is humanity's as well as America's cause. His critics viewed this commitment to victory as lacking subtlety. Reagan on the other hand viewed communism was an inherently aggressive form of insanity that violated human nature and must one day disappear. The goal was not to manage and coexist with the global Soviet threat. America's goal should be to defeat that threat peacefully.

* Second, Reagan was equally clear that, to preserve peace and the nation's security, the U.S. must have unquestioned military strength. He rejected the consensus that sought an equilibrium of power backed by arms control treaties with the Soviets. Communists' unchanging goal of world domination and disdain for treaty promises meant that peace could be had in only one of two ways: either by surrendering or by making America stronger than its adversary. Reagan opted for peace through superior strength, both militarily and economically.

* Finally, Reagan rejected the prevailing doctrine of deterrence through Mutually Assured Destruction. As he came to see it, the promise of offensive retaliation to deter a Soviet attack was not a genuine defense. After years of building their military advantage, Russian leaders thought a nuclear war was both possible and winnable. A genuine defense against nuclear attack would protect the American people rather than simply avenge them. Hence Reagan's defense buildup broke with conventional thinking to include the Strategic Defense Initiative, which would render Soviet nuclear weaponry a useless expenditure.

Critics from the center to the left of the political spectrum saw Reagan's expansive defense spending as provocative warmongering that would lead to an exploding arms race. Reagan saw superior military strength, including the new missile defense system, as a way of forcing Soviet leaders to the bargaining table to make real concessions and genuine reductions in nuclear weapons. Contrary to what some people thought, and still think, Reagan did not change course when Gorbachev appeared on the scene. Reagan's goal had always been to reduce nuclear weapons with verifiable agreements, to the point where neither side represented a threat to the other. Late in his second term, Reagan's strategy succeeded in taking a monumental step in this direction. In December 1987, both sides signed the INF Treaty eliminating Russia's and America's intermediate-range nuclear missiles from Europe. Leading conservatives blasted Reagan's accomplishment as naive, an act of appeasement, and, as George Will declared, the day America lost the Cold War (Reeves 2005, 446). It is a central part of Reagan's legacy that the three features listed above were largely the general terms on which the Cold War ended shortly after he left office (Gaddis 1994).

Besides this monumental fact, there were other consequences of Reagan's approach to national security that deserve notice.

Reagan saw that rebuilding American military predominance could only be the reflection of a deeper rebuilding of the American spirit that had become demoralized in the 1960s and 1970s. There first had to be the national will to prevail. And that depended on Americans' conviction that they deserved to prevail. Recalling Americans to that moral rearmament was Reagan's primary teaching achievement in advancing the nation's security. It is what he meant by "bringing America back."

The moral clarity Reagan espoused in fighting communism was an influential precedent for President George W. Bush and neoconservatives in his administration's war on terrorism. Sharp divisions between friend and foe, good and evil, became the watchword. Likewise, Reagan's vision of a global mission in defeating communism was now transposed into a new global mission that strained to the breaking point the caution, modesty, and anti- utopianism that Russell Kirk had commended as the conservative approach to America's duties in the world (Kirk 1953, 424). As Reagan's would-be heir, President George W. Bush after 9/11 pushed past those bounds of conservative restraint, presenting American- backed democracy as a sure antidote to terrorism all over the world.

There were other national security legacies. The Cold War was the lens through which Reagan saw all defense and foreign policy issues, and this produced certain blind spots. Two have had major long-term implications.

First, the Reagan Doctrine sought to roll back whatever might be seen as communist influence throughout the Third World. This in turn led to American support for brutal regimes and proxy wars that had nothing to do with moral clarity and everything to do with whatever seemed expethent as an anti-Soviet maneuver. The negative consequences were profound.

To support the Contra rebels in Nicaragua, Reagan embraced the murderous government of Rios Montt in Guatemala. To counter communist influence in Africa, the Reagan White House welcomed Angola's Jonas Savimbi and his no less murderous Unita forces. Partly for the same reason, President Reagan rejected sanctions against South Africa's apartheid regime and praised the anti- communist stance of its segregated tribal "republics." Because it had been ousted by the pro-Soviet Vietnamese government, Cambodia's Khmer Rouge found the Reagan administration championing its recognition as a government in exile at the United Nations. With Donald Rumsfeld as his Middle East envoy, Reagan removed Saddam Hussein's Iraq from the list of state sponsors of terrorism and gave the dictator major weapon supplies, not only to protract the brutal war with Iran but also to thwart the pro-Soviet Syrian regime of Hafez al-Assad. And in Afghanistan, the trickle of weapons sent to the mujahedeen under President Carter became a massive weapons flow to radical Islamic forces fighting to expel the Soviets.

This brings us to the second major consequence of conflating all threats to American security into a single menace of communist aggression. Reagan was largely blind to the threat of militant Islam. He simply melded Islamic radicalism into communist imperialism. Thus, in 1985 Reagan denounced five countries-Cuba, Nicaragua, North Korea, Iran, and Libya-as a united front of terrorist states. In 1986, he pressed Congress for renewed support for the anti-Sandinista "freedom fighters" by invoking the vision of communist Nicaragua becoming a sanctuary for "Muammar Qaddafi, Arafat and the Ayatollah" who would lap America's southern borders in "a sea of red" (Reeves 2005, 313).

Reagan was equally blind to how his administration's actions, supposedly against "leftists," were inadvertently fueling a threat from radical Islamic groups. Thus, as Menachem Begin and Ariel Sharon sought to finally eliminate the PLO, Reagan was surprised and reluctantly drawn into backing the Israel invasion of Lebanon in June 1982. Early in September, Reagan defended Sharon's bombing and shelling of Muslim neighborhoods as a response to "leftist militias," an Israeli allegation which the State Department was quickly forced to deny. To Reagan's disgust, Israeli forces then facilitated the massacre of Muslim families in West Beirut. In response, U.S. Marines returned to Beirut as a so-called multinational peacekeeping force to keep a peace that did not exist. From here it was all downhill. With Marine peacekeepers prohibited from using their weapons in what was now a civil war, the U.S. Navy tried to provide offshore support to the Marines' position at Beirut airport by shelling Muslim militias in the Shiite slums and surrounding mountains.

This reality of hostile military engagements in Lebanon was denied by Reagan, lest the 1973 War Power Act should be invoked and signal weakness to the Soviet Union and its Syrian ally. A tight chain of events, unexplained to the American public, now snapped into place. Israel's invasion and occupation of Lebanon, the massacre of Muslims in West Beirut, and the U.S. Navy's bombardment of Muslim neighborhoods-all this could now be linked in many Muslims' minds to justify the retaliatory suicide bombings of the U.S. embassy and Marine barracks in Beirut in April and October 1983. The same linkage, to which Americans were left oblivious, produced the hijacking of TWA Flight 847 in June 1985, the subsequent holding of hostages from that flight, their release through secret negotiation with hostage takers in return for Israel's release of 3 1 Shiite prisoners, and then Reagan's ill- fated attempt to free other American hostages in Beirut through an arms-for-hostages deal, using Iran as the middleman. More on this in a moment.

Certainly it was not Reagan's intention to present the United States as an imperialist, anti-Islamic power. But just as certainly, this was a perception that grew and spread throughout the Muslim world in the 1980s. In the end, the Reagan administration did much to aid the growing cause of radical jihadists in the Middle East.

All this notwithstanding, the benefits of hindsight should not obscure the central point. The threats posed by Soviet communism and nuclear war were in truth the primary dangers to Americans' security in Reagan's day. He successfully answered that historic challenge.

The Presidency

Ronald Reagan's legacy for the institution of the presidency presents its own mixed image.

On the one hand, Reagan revived an executive office that was in a weak, dispirited condition. By 1980, Americans had lived through four traumatic and, as many people saw it, failed presidencies following Kennedy's assassination in 1963. There was also a growing opinion that the presidency might be just too much for one man to handle.

After two terms, Reagan left behind a presidency that was robust and widely admired. One sign is that President Clinton, in trying to revive his own presidency after 1994, allegedly studied videotapes of Ronald Reagan to imitate his bearing, maturity, and aura of command. Vice President Al Gore did the same in preparing to debate George W. Bush in 2000. Unlike his four immediate predecessors, Ronald Reagan left office with almost two-thirds of Americans (64%) approving the way he handled the job, an approval rating slightly higher than the approval rating registered at the end of America's two most popular postwar presidencies, Dwight D. Eisenhower (59%) and John F. Kennedy (58%) Wall Street Journal 2006).

Beyond that, it is widely held that successful presidents lead through exercising their power to persuade. They combine an active, transformative agenda and a positive, uplifting attitude. President Reagan fulfilled that bill of particulars. He brought dignity, confidence, and moral conviction to the office. The vision he communicated helped restore America's confidence in itself. After the string of presidential failures following Kennedy's murder, most Americans saw Reagan's presidency as a success.

All of this belongs on the positive side of the ledger. Likewise, a good case can be made that President Reagan was successful in the sense of effectively putting his imprint on executive branch operations. This occurred in the first instance by Reagan's being clear on the principles through which he intended to govern. People throughout the bureaucracy "got the message" and policy options involving new domestic spending, more regulations, higher taxes, stinginess with defense programs, or detente with the Soviets tended to fade into the background. This effect of bringing the executive branch into line with presidential preferences was bolstered by more centralized White House control over departmental political appointments, budgets and legislative proposals, judicial appointments, federal regulations, and executive orders.

Alongside these accomplishments in restoring the presidency's public status, there is also a negative side of the ledger. Reagan also passed on a presidency that was more dangerous for our constitutional order, although I am sure that was never his intention. Behind the scenes, Reagan's tenure in the White House gave a sharpened impetus to the idea of presidential unilateralism, that is to say, the use of strictly executive measures to make policy without going through Congress (Shull 2006). One indicator was a White House strategy, begun in 1985, of using presidential "signing statements" to quietly but consistently expand presidential power. Statements issued as the president signed congressional legislation were now more deliberately crafted to put on the public record the president's rationale for interpreting or even ignoring particular provisions in the law he was signing. The intention was to use the president's challenges to the law as part of the official legislative record, which could then be used in the courts as grounds for defending presidential actions or inactions in executing congressional laws (Pfiffner 2008, 200-201).