9.2 - Reagan and Conservatism

The Reagan Revolution

• On the day Reagan was inaugurated, the Iranian hostages were released, boosting his administration's start.

• He survived an assassination attempt early in his presidency, which increased his popularity.

• Reagan’s goals were to reduce the size of the federal government, lower taxes, cut welfare spending, strengthen the military, and create a more conservative federal court.

Reaganomics:

• Advocated for supply-side economics, emphasizing tax cuts and reduced government spending to stimulate private investment and economic growth.

• Critics likened it to "trickle-down" economics, benefiting the wealthy with the hope that their prosperity would benefit others.

Federal Tax Reduction

• Early in Reagan's presidency, Congress passed the Economic Recovery Tax Act of 1981, which reduced personal income taxes by 25% over three years.

• Tax cuts primarily benefited upper-income taxpayers, including reductions in corporate taxes and capital gains taxes.

• Provisions were made to help small investors through tax-deferred IRAs.

Spending

• Domestic program cuts exceeded $40 billion, targeting food stamps, student loans, and mass transportation.

• Military spending increased dramatically, and Reagan supported a bipartisan bill to strengthen Social Security, raising the retirement age and taxing some benefits.

Deregulation

• Reagan reduced federal regulations on businesses and industries, continuing a policy begun under Carter.

• Restrictions were eased on savings and loan institutions, corporate mergers, takeovers, and environmental protections.

• Regulations on auto emissions and safety were also relaxed to support the struggling American auto industry.

• Secretary of the Interior, James Watt, opened federal lands for increased coal, timber production, and offshore oil drilling.

Labor Unions

• Despite being a former union leader, Reagan took a hard stance against unions.

• He fired striking air traffic controllers who violated their contract and decertified their union (PATCO).

• Many businesses followed suit by hiring striker replacements, contributing to a decline in union membership from over 30% in 1962 to around 12% in the late 1990s.

• The 1982 recession and foreign competition also weakened workers' wages.

Recession and Recovery

• In 1982, the U.S. experienced a severe recession with bank failures and 11% unemployment.

• The recession, along with falling oil prices, reduced inflation to below 4%.

• The economy rebounded in 1983, but the recovery widened the income gap between the rich and poor.

• While the upper-income groups and "yuppies" benefited, the middle class saw stagnant or declining living standards.

The Election of 1984

• Reagan's popularity surged with the return of prosperity, leading to his nomination by the Republicans.

• Democrats nominated Walter Mondale, with Geraldine Ferraro as his running mate, the first woman on a major-party ticket.

• Reagan won in a landslide, carrying every state except Minnesota, supported by two-thirds of White males. Only African Americans and those earning less than $12,500 favored the Democrats.

Budget and Trade Deficits

• Reagan's tax cuts and increased military spending led to larger federal deficits, with the national debt tripling from $900 billion to nearly $2.7 trillion.

• The U.S. trade deficit also grew, reaching $150 billion annually, contributing to increased foreign ownership of U.S. assets.

• Congress passed the Gramm-Rudman-Hollings Balanced Budget Act to address the deficit, leading to spending cuts and tax increases that reduced the deficit to 2.9% of GDP by 1988.

Americans with Disabilities Act (ADA)

• Signed into law by Bush in 1990.

• Prohibited discrimination against citizens with physical and mental disabilities in hiring, transportation, and public accommodation.

• Integrated individuals with disabilities more fully into American society.

Women’s Equality and Safety:

• Women increased participation in the workforce, narrowed the pay gap, and achieved higher education levels than men.

• Despite progress, women still faced pay inequity and gender discrimination, particularly in top business roles.

• The #MeToo movement (2017) showed issues of sexual harassment and gender-based pay differences.

• Efforts focused on changing laws and policies surrounding sexual harassment and assault.

African Americans and Justice:

• Civil rights movement created opportunities for African Americans, but poverty and incarceration rates remained high.

• Police violence against Black men gained attention, especially after the Rodney King beating in 1991.

• The acquittal of the officers involved in King’s case sparked a national conversation on racial justice.

• The Black Lives Matter movement (2013) focused on police reform, particularly after George Floyd's death in 2020.

LGBT Rights:

• The fight for equality related to sexual orientation continued, with ongoing divisions between conservatives and liberals.

• President Clinton's "Don’t ask, don’t tell" policy addressed discrimination against gays in the military.

• In 2009, Congress made it a federal crime to assault someone based on sexual orientation or gender identity.

• Obergefell v. Hodges (2015) Supreme Court ruling legalized same-sex marriage nationwide under the Fourteenth Amendment.