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Ronald Reagan
In the decades following World War II, Republican administrations sought to dismantle the "creeping socialism" of the New Deal. By the 1970s, the American system appeared to be heading in an unmanageable direction. The nation began to plunge into a deep malaise. The Vietnam War was just winding down; the nation was faced with double digit inflation and high unemployment; crime was on the upswing; and a proliferation of the nuclear arms race continued. It appeared as if Carter could not be elected in 1980. Behind in the polls just one month prior to the Presidential election, Reagan and Bush orchestrated the October Surprise, pressuring Ayatollah Khomeini to keep the 52 American hostages in Iran until after the November election. With the hostages still in Teheran, Carter's popularity waned, assuring the Presidency for Reagan.
The largest number of voters, 38 percent, chose Reagan because "it was time for a change," while a mere 11 percent voted for him because "he is a real conservative." Thus, Reagan, along with a Republican Senate which backed him for six of his eight years in office, was able to launch his revolution. The Reagan-Bush administration quickly moved to inflict enormous damage upon the nation's working class and its poor, while corporate America received a boost.
Reagan's specifics were clear. He promised to cut the deficit by cutting programs in order to balance the budget. He slashed almost every social program by $140 billion in his first term, slashing spending for health, education, senior citizens, pregnant women, welfare, and the environment. Reagan also promised tax cuts of $196 billion, primarily for the wealthy, and still informed the public that he would balance the budget. He claimed that these cuts would not hurt the poor because of comparable reductions in income taxes. To the contrary, it was this segment of society which was impaired the most. The Congressional Budget Office reported that 23 percent of all families, earning under $10,000 annually, would gain $120 in tax cuts, but they would also lose $360 in benefits. On the other hand, the richest 1 percent of families lost an average of $120 in benefits, but they gained a enormous $15,250 in tax cuts. In the mean time, unemployment increased and 16 million Americans lost health insurance.
On the other hand, he increased defense spending by nearly $200 billion in the same time period, giving the Pentagon a virtual blank check. Military spending skyrocketed out of control, and so too did the national budget, soaring nearly 300 percent to almost three trillion dollars in eight years. This left him with the legacy of being the biggest spender in the country's history. When Reagan moved into the White House, the national debt was $907.7 billion which had been slowly accumulated over 190 years. This averaged out to a debt of under $50 million per year. By the time Reagan left the White House eight years later, the debt had skyrocketed to $2.86 trillion, an increase of $1.89 trillion or an increase of $236 billion for each year he was in office.
In foreign affairs the Reagan administration regressed from a period of detente back to a chilly cold war with the Soviet Union. Reagan were frequently referred to them as the "Soviet empire." In the 1980s, the Soviet Union asked for another set of INF talks. They prepared to make severe concessions, all of which were rejected by Reagan. Brezhnev unilaterally supported a no first-strike nuclear pledge and repeatedly asked the United States to do the same. The Soviet delegation offered to reduce medium-range missiles in Europe from 600 to 162. Additionally, they unilaterally froze the deployment of SS-20 missiles, while urging the United States not to deploy cruise and Pershing 2 missiles in Western Europe. They proposed a cutback in both countries' land-based intercontinental missiles by 25 percent. Finally, the Soviet Union unilaterally placed a moratorium on nuclear testing and urged the United States do the same.
Yet, the Soviets did not consider the hundreds of French and British intermediate range missiles, which were capable of reaching their territory from Western European land, sea based missiles and bombers. With all the concessions the Soviet Union made to the United States, their proposals were not accepted by the Reagan administration.
Reagan waged several wars in Latin America including one which continued into Bush's administration. The contra war against the democratic Sandinista government in Nicaragua resulted in several indictments of high level White House officials. In addition, scandals involving top level government officials engulfed the Reagan administration. Corruption ran rampant and the corporate profits and salaries of executives soared, while working class wages dropped. Fraud moved into several government agencies. More than 100 Reagan administration officials faced allegations of questionable activities. Many resigned and others faced criminal charges.
On the domestic front, the political action committee (PAC) money escalated in the 1980s and added to charges of corruption. Since 1925, laws made it illegal for corporations and labor unions to contribute money to candidates, but such legislation was unenforceable. Then the infamous Watergate scandal surfaced in 1972, and two years later Nixon was forced to resign. In the wake of these revelations, Congress was forced into enacting sweeping campaign reform laws, and the six- person Federal Election Act was created in 1974. This established the Federal Election Commission (FEC). Tougher restrictions on political spending were implemented, and a more responsible system on public financing of Presidential campaigns was put into place.
With the influence of corporations and to some extent labor unions severely impeded, the corporate world looked for a new means to enable itself to continue funneling money into the bank accounts of their favorite candidates. Even though each corporation and labor union could establish only one PAC to provide funds to a least five candidates, hundreds of other special interest groups could also establish PACs to contribute money to the same candidates. Thus, the chance of electing candidates to office was greatly enhanced. In addition the law also set up limits of how much an individual could spend on his or her own campaign. However, the Supreme Court struck down limitations on "soft" PAC money, that is, contributions which go directly to a particular political party -- not to a specific candidate. The high court ruled that the right to run for office and to express one's opinions included the right to spend an unlimited amount of his of her own money.
One year into Reagan's first term PACs contributed $55.3 million to candidates, hoping that they would be elected and would return favors to them. Candidates elected to Congress received one- third of their war chests in PAC contributions. By 1982, PAC money increased to $83.6 million, and in the Congressional elections two years later, PAC contributions topped $100 million. By 1994, PACs helped "buy" Congressional candidates by turning over an excess of $200 million.
PAC contributions invariably assured victory for Congressional candidates. The newly elected candidates frequently reciprocated by voting for bills which were beneficial to the PACs. For example, in the early 1980s, the House voted to raise dairy price supports throughout the United States, and proponents of the bill received nearly six times more money from dairy PACs than did those members who opposed such legislation.
In his eight years in the White House, Reagan carried out a continuous attack on the environment. On several occasions, he displayed his ignorance as well as his disdain for ecology. While campaigning in 1980 he stated, "80 percent of our air pollution stems from hydrocarbons released by vegetation, so let's not go overboard in setting and enforcing tough emissions standards from man-made sources." On another occasion, he stated that "trees cause pollution."
As Reagan whittled away at environmental laws, Congress subpoenaed his EPA documents in 1983. In a televised news conference, he said "he will never invoke executive privilege if there's suspicion in the minds of the people that maybe it is being used to cover up some wrong-doing." The next day, White House spokesperson Larry Speakes denied that he had made that statement and that his records would be submitted to the Justice Department.
Corruption ran rampant in many government agencies. In the Department of Commerce, James Watt was a fiercely anti-environmentalist who protested federal control over the rich mineral and timber resources in the western states. Additionally, Watt set out to cripple the EPA and to permit oil drilling in scenic areas. After telling an off-color ethnic joke in 1983, Watt was forced to resign. He described members of a federal advisory panel as "a black ... a woman, two Jews, and a cripple."
Corporate fraud spilled over to Housing and Urban Development (HUD). Billions of dollars were channeled into the private sector, as developers, banks, and speculators profited. All this was occurring while HUD provided very few homes for the needy. For example, in the late 1980s a Palm Springs, California developer was given millions of dollars to build low-cost housing for the poor. However, very few poor families migrated to this expensive community. Also, a New Jersey developer embezzled millions of dollars in the late 1980s. Between 1981 and 1986, $17 billion was cut in HUD funds for public housing.
While in the Reagan administration, Secretary of Interior Watt was indicted on 41 felony charges for using his HUD connections to help his clients seek federal funds for housing projects in Maryland, New Jersey, Massachusetts, Puerto Rico, and the Virgin Islands. Watt conceded that he had received $500,000 from clients who were granted very favorable housing contracts after he intervened. He also was given $100,000 for a project in Puerto Rico. Testifying before a House committee Watt said, "That's what they offered, and it sounded like a lot of money to me, and we settled on it." After over ten years of investigation, Watt was sentenced to five years of probation and 500 hours of community service for withholding documents from a grand jury which investigated HUD in March 1996.
Corruption spread to the EPA. Anne Burford, who headed the superfund of the EPA, resigned after she bent environmental regulations for dozens of industrial polluters. One of Burford's subordinates, Rita Lavelle, headed the EPA's toxic waste clean-up program. She was indicted and served three months in a federal penitentiary for lying to Congress. She was able to clean up only a small handful of the nation's thousands of toxic waste sites. In addition, EPA administrator, John W. Hernandez, resigned after his staff disclosed that he illegally allowed Dow Chemicals to review a report which named it a dioxin polluter. Assistant EPA administrator John Horton was dismissed for using government employees for private business. Matthew Novick, EPA Inspector General, was fired after he used government officials to work on private business. Theodore Olson, Assistant Attorney General of the United States, was under investigation for obstructing justice in the investigation of the EPA. EPA General Counsel Robert Perry resigned after improper participation in a settlement which involved a former employer. John Tudhunter, assistant EPA administrator, resigned after being accused of meeting privately with chemical company lobbyists. Additionally, the Reagan administration sold and leased billions of dollars worth of coal and oil reserves, timber lands, and mineral reserves.
In addition, Reagan tampered with environmental laws in his crusade to bolster corporate profits. These included the effect which factory pollutants, originating in upper state New York, had on destroying Canadian forests, rivers, and streams. White House chief of staff Michael Deaver always denied Canada's allegations that sulfides from New York factories caused any harm to the environment. However, when Deaver left the White House, he immediately lobbied on behalf of foreign countries, in violation of The Ethics in Government Act which prohibits anyone for lobbying for one year after leaving a White House post. Deaver immediately he went to work for the Canadian government, being paid $105,000 to lobby for compensation from the United States for damage inflicted on Canadian territory from acid rain. Deaver also received $250,000 from Daewoo, a South Korean steel corporation, to market its product in the United States. Other foreign lobbyists included Ed Rollins, a member of Dole's campaign committee in 1995, and former Republican National Chairman Frank Fahrenkopf, were on the payroll as lobbyists for the Taiwanese government.
Also in 1982, lobbyists continued their assault on the consumer. Congress struck down a bill which would have required used car dealers to disclose known defects on vehicles to prospective buyers. The 286 House members, who voted against the bill, received five times more PAC contributions from used car dealers than did the 133 members who supported the legislation. And finally in 1982, the House passed a United Automobile Workers (UAW) bill which would have required only American automobile parts be used in American manufactured cars. The 215 House members, who supported the bill, received $1.3 million in PAC money from the UAW, 18 times more than PAC contributions which were given to those who opposed the legislation.
With the skyrocketing cost of health care, there have been several proposals to enact a national health care system. The American Medical Association (AMA) spent nearly $20 million in PAC money since 1980s to oppose any reforms. Along with the AMA, numerous health insurance corporations and HMOs contributed tens of thousands of dollars in PAC money to legislators in an effort to buy their votes as well. A national health care system would included the 22 percent of families with incomes below $25,000. A ceiling on all medical costs -- hospital stays, doctors' charges, and prescriptions -- would have been negotiated. However, PAC contributions influenced members of Congress to defeat this measure.
Universal health care also became a state issue, but corporate pressure prevented it from becoming a reality. For example in California, Proposition 186 would have provided health care recipients with essentially the same care but at a lower rate. Over two million dollars in PAC money rolled in, as disinformation was fed to the public to defeat the initiative. Residents of California would pay a mere 2.5 percent of their state income tax liability. This would have amounted to an average of approximately $500 to $600 per person every year. Even those who pay no taxes would have been covered. There would be no need to continue with Medicare and Medicaid. Thus, bureaucracy would be minimized, since the health insurance corporations would be eliminated. In short, the cost of health care would diminish; yet the private sector would still be left intact. Through a disinformation campaign by corporations, subsidized primarily by PAC contributions, Proposition 186 was defeated by nearly a two to one margin.
In the 1980s, the national budget accounted for annual chunks of approximately $100 billion a year for price supports as well as for bailouts of corporations such as Chrysler and Lockheed. Continental Illinois Bank itself received $7.5 billion in 1984. At the same time, small struggling farmers faced with foreclosure were ignored by the Reagan administration. Yet these numbers seemed minuscule after the savings and loan scandal was publicized.
Prior to 1982, federal chartered savings and loans were required to place almost all their loans in home mortgages which was quite stable and secure. Then the Reagan administration assumed a laissez faire approach to the banking system, resulting in the failure of hundreds of savings and loans. A new federal law allowed savings and loans to invest their money more freely. If they desired, they could place 100 percent of their money in speculative commercial real estate ventures. This was similar to what occurred during the speculative decade of the 1920s when many savings and loans gambled with their federally insured reserves and were forced into bankruptcy. Soaring interest rates in 1982 made millions of low- interest mortgages undesirable. This federal deregulation and the subsequent default of numerous banks had severe repercussions. One savings and loan institution which failed in the 1980s was Colorado's Silverado. George Bush's son, Neil, was appointed to the board of directors, and several years later the corporation declared bankruptcy. This one institution cost American taxpayers an estimated $1 billion. The massive bailout favored this corporate industry, while it was the taxpayer who bore the enormous cost. The initial projection in 1988 was that it would be as high as $100 billion to save this failing industry. However, by the mid-1990s that figure was readjusted to over $500 billion.
By the time Reagan left the White House and the smoke had cleared, a laundry list of government upper management officials had surfaced. Some of them included:
Anne Burford, Rita Lavelle, James Watt, and Michael Deaver.
Richard Allen, National Security adviser, who resigned amid controversy over a $1,000 honorarium after arranging an interview with Nancy Reagan.
James Beggs, chief administrator at NASA, who was indicted for defrauding the government while an executive at General Dynamics.
Guy Flake, Deputy Secretary of Commerce, who resigned after allegations of a conflict of interest in contract negotiations.
Louis Glutfrida, director of Federal Emergency Management Agency, who resigned amid allegations of misuse of government property.
Edwin Gray, chairman of Federal Home Loan Bank, who was charged with illegally repaying himself and his wife $26,000 in travel costs.
Max Hugel, CIA chief of covert operations, who resigned after allegations of fraudulent financial dealings.
Carlos Campbell, Assistant Secretary of Commerce, who resigned after charges of awarding grants to his friends' firms.
Raymond Donovan, Secretary of Labor, who was indicted for defrauding the New York City Transit Authority of $7.4 million.
John Fedders, chief of enforcement for the Securities and Exchange Commission, who resigned after charges of wife-beating.
Arthur Hayes, commissioner of the Food and Drug Administration, who resigned after being under investigation for illegal travel reimbursements.
J. Lynn Helms, chief of the Federal Aviation Administration, who resigned after a grand jury investigated illegal business activities.
Marjory Mecklenburg, Deputy Assistant Secretary of the Department of Health and Human Resources, resigned after allegations of irregularities on her travel vouchers.
Edwin Meese, Attorney General, was under investigation by a special prosecutor for his role in helping Wedtech Corporation.
Robert Nimmo, head of Veterans Administration, who resigned when a report criticized him for improper use of government funds.
Lyn Nofziger, White House aide, who was under investigation for his role in helping Wedtech Corporation.
J. William Petro, a United States attorney, who was fired and fined for tipping off an acquaintance about a forthcoming grand jury indictment.
Thomas C. Reed, White House counselor and National Security Council adviser, who resigned and paid a $427,000 fine for stock market insider trade information.
Emanuel Savas, Assistant Secretary of HUD, who resigned after he had assigned staff members to work on a book he was writing.
Peter Voss, Postal Service governor, who pleaded guilty to charges of expense account fraud and to accepting kickbacks.
Charles Wick, director of the United States Information Agency (USIA), who was accused of taping conversations with public officials without their approval.
In addition, charges were brought against several high level officials in regard to Iran-contra. Those included:
National Security Council advisers Robert McFarlane and John Poindexter
Secretary of Defense Casper Weinberger
Deputy Secretary of State Elliot Abrams
Colonel Oliver North of the National Security Council
Major Richard Secord of the National Security Council
Deputy Assistant to the President Jonathan Miller
CIA officials:
Albert Fiers
Thomas Clines
CIA chief William Casey died before he was indicted.
Clair George
Richard Miller
Albert Hakim
Carl Channell |
