As the adage says, those who fail to learn history are doomed to repeat it. Apparently, that’s exactly what Barack Obama hopes. In his speech on Monday night, Obama told Americans that they should hearken back to the days of Ronald Reagan and learn his lesson about tax increases in a crisis:
The first time a deal passed, a predecessor of mine made the case for a balanced approach by saying this: “Would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates, and higher unemployment? And I think I know your answer.” Those words were spoken by Ronald Reagan. But today, many Republicans in the House refuse to consider this kind of balanced approach.
The quote refers to a deal that Reagan cut with Democrats to raise taxes ahead of promised spending cuts down the road. As Yuval Levin recounts at National Review, though, Reagan learned an entirely different lesson from this episode:
Well, yes, those words were spoken by Ronald Reagan (in August of 1982) in reference to TEFRA—the Tax Equity and Fiscal Responsibility Act—which congressional Democrats promised would involve a ratio of $3 in spending cuts for every $1 in tax increases (which they said would consist only of closing loopholes). TEFRA passed later that year, and the tax increases certainly happened but, as Reagan later put it in his autobiography, “the Democrats reneged on their pledge and we never got those cuts.”
TEFRA was one of Reagan’s great regrets about his time in the White House, and should serve as a warning to Republicans contemplating similar grand bargains.
Actually, Reagan himself failed to learn this lesson; in 1986, he signed off on the general amnesty for illegal immigrants with the promise that Democrats in Congress would secure the borders. That didn’t work out too well, either. Reagan’s VP failed to learn the lesson from both of these events, reneging on his pledge to fight tax increases in exchange for future budget cuts in 1990. Those cuts never materialized.
Levin writes that Obama might be thinking about pulling another TEFRA on Republicans with his suggestions of tax increases as “balance.” You think? Either way, if Obama wants Republicans to become more open to compromise, offering TEFRA as a template is about the worst possible way to go about it.
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