In his State of the Union address and budget message, Barack Obama spent no little effort reminding his audience that he had inherited a terrible fiscal situation. In the spirit of bipartisan blame-shifting, here’s a related gem from the archives.
This one comes from the Reagan years (and more proximately from the “James Baker papers”:http://diglib.princeton.edu/ead/getEad?eadid=MC197&kw= at Princeton): a 1984 memo from Budget Director David Stockman, writing to the president to defend the fiscal 1985 budget proposal. The conservative journal “Human Events”:http://www.humanevents.com/ had turned on Reagan in this instance, arguing that “there is virtually no cost containment in this budget”: it was more spendthrift than Jimmy Carter’s budgets both in money and share of GNP and spent wildly on social programs. Worse than Carter? Ouch. Stockman had to admit the basic fiscal facts – and didn’t want to antagonize _Human Events_ – but took twelve painstaking pages to argue they should be read another way and that the dire budgetary situation really wasn’t his (or Reagan’s) fault.
I’ve posted the full memo “here”:http://users.dickinson.edu/~rudaleva/stockman_FY85.pdf. What’s most notable perhaps is the overriding pragmatism of the document – a facet of Reagan’s governing style that Reagan scholars realize about the administration but modern Reagan acolytes’ paeans to his conservative steadfastness often don’t.
Part of the problem, Stockman argued, was the stagnant economy of 1981-82, which had made even constant government spending take a larger share of the overall economy. But policy priorities – new, and inherited – were structural roadblocks to reform. Defense couldn’t be cut. Debt service had already surfaced as a problematic fixed cost. So of course had entitlements. Stockman rued the “screams and demagoguery” (from Republicans too) that met any attempts to cut spending. From education to farm subsidies to Black Lung payments, “Our hands were tied.” And “attempting deep cuts in Medicare and Social Security could wipe out the Republican party,” Stockman told the president. “…Some education of our supporters along these lines will be necessary after the election.”
Peter Orszag might well sympathize. And if he sends me his twelve pages, we’ll post that too.