The Official 1984 Reagan Scorecard
GLASTRIS, JONATHAN ROWE, PAUL
THE OFFICIAL 1984 REAGAN SCORECARD BY JONATHAN ROWE AND PAUL GLASTRIS I. The Reagan Conservative Scorecard ... the appointment of Caspar Weinberger as Defense secretary, and Weinberger's...
...Taming a Bloated Bureaucracy Ronald Reagan was going to run the government "like a business...
...and a way to prevent those with economic power from threatening the health and safety of the rest of us...
...With an abundance of real natural gas (the existence of which James Schlesinger, Carter's energy chief, had denied), nobody wants to bother with the expensive synthetic stuff...
...Reagan hasn't actually deregulated the banks-the banks have been using loopholes in the law...
...As Gregg Easterbrook's article in this issue suggests, the result is not a better defense, but a weaker and more expensive one...
...Eliminate Postal Subsidies It took courage for David Stockman to ask Congress to halve this $789 million "revenue foregone" budget item that gives bargain postal rates to nonprofit organizations, including a number of popular magazines...
...Still, the bill can't do much harm, even as it stands...
...First, he loosened the requirement that subsidized carriers buy American-made (and more expensive) ships...
...He's trying again this year with the hyperbolically named Youth Employment Opportunity Wage Act, which would shave 85 cents off the $3.35 minimum wage for teenagers working from May 1 through September 30...
...Yet we're still reading stories about faulty weapon systems and cost overruns in the newspapers...
...It held up regulations regarding infant formula contents amidst reports of dangerous nutritional deficiencies among prominent brands...
...Reagan has done none of these things...
...He says that government should do only what individuals can't do for themselves...
...He let James Watt practically give away government-owned coal and oil reserves...
...Standing Up to Big Labor Reagan did take on labor in a few instancesthe PATCO strike being the most notable...
...This would both end the economic engineering that the government conducts through the tax laws and relieve us all of the chore-and economic drain-of acting as accountants for the federal government...
...The Reaganites were right about one thing...
...If we just cut the taxes and get rid of the regulations, it will unleash the Force, and everything will work out for the best...
...National economic policies should specifically encourage long-term investment in new plant and equipment...
...We stopped them dead in their tracks," a boat lobbyist gloated...
...Why Reagan has endorsed these $2 billion Carter mistakes is another question...
...Now the results are in...
...Reagan has since changed his tune on the Synfuels Corporation: expenditures are scheduled to fall by more than half...
...Retire Early Retirement Military personnel are eligible for retirement after 20 years of service, leaving us with many "retirees" who haven't sprouted a single grey hair and are happily collecting their pensions as they move on to second careers...
...This time the president stands a better chance...
...Counsel to the commission was one Boyden C. Gray, a Washington lawyer who numbered the American Mining Congress and the auto industry among his clients...
...Then the truth hit home...
...For the amount he gave away to the behemoths, Reagan could have eliminated taxes entirely for the vast majority of smaller companies, which, as is well known, provide most of the new jobs and innovation and should be the first concern of a conservative, enterprise-minded president...
...The problem was that Reagan's tax cuts were the mirror-image of what Stockman had dubbed "social pork barrel" liberalism: they gave too much where it was not needed in order to provide too little where it was...
...Instead, Ronald Reagan tried to rally us behind his proposal...
...This year more than 400,000 government workers will make more than $30,000, not counting employees of the Postal Service, the military, or the intelligence agencies...
...Stockman went after them anyway, and now COLAs are given annually...
...What better way to employ the 8 percent of the work force (16 percent among blacks) that is out of work...
...Washington has not seen such a proclivity to throw money at a problem since the salad days of the Great Society...
...We think Reagan was right to oppose PATCO's preposterous demand for a wage increase of $10,000 across-the-board at a time when a GS-14 air traffice controller was making up to $53,000...
...I shudder to think of what could happen in this country...
...There are lots of shopowners and others who would love extra help for the summer but can't afford it at the full minimum wage...
...According to free-market theory, armies of voucher-wielding oldsters will be able to bargain down their hospital bills...
...And you used your tax cuts to pay some bills or get the car painted rather than to buy newly issued stock...
...He could, for example, have gone to the Shallow Underwater Missile (SUM), which was developed back in 1978...
...Those problems can be summarized as The Sucker Factor...
...His administration has the soul of an accountant, which is not adequate to the challenges ahead...
...who are we to question the invisible hand, anyway...
...Disband The Central Command Carter called it the "Rapid Deployment Force...
...But it is helpful to review the record, if for no other reason than to consider what an alternative might be like...
...There's no standby rationing...
...The administration proceeded to cut back on mine inspections-with a 25 percent increase in deaths due to mine cave-ins-and tried to abolish lifesaving requirements for airbags and automatic seat belts...
...Reagan should disband the Central Command and spent the money instead on a strengthened Marine Corps, including procurement of more weapons like the A-10 close-support planes, which the Marines really need...
...Moreover, civil rights are also a way of helping people gain entrance to the economic mainstream, where they can then provide for themselves...
...Actually, the only reason Roosevelt called Social Security an "insurance" system was to duck his critics, who were calling it "socialism ." In reality it's a device for taking money from present workers to support retired ones...
...The economy...
...Heck, says Reagan, let's take price controls off all gas, existing wells included...
...There was more pork-barreling on the corporate side...
...But why should the United States, which gets only 8 percent of its oil from the region, be paying for protection of this oil in the first place...
...Underpaid...
...Some would be relatively painless for him: taking on the bloated civil service, for example...
...To the contrary, we see it as the best engine of economic health, and a source of creativity and freedom in the national life...
...Income Support Here the purpose should be to end welfare for the well-to-do (more than $10 billion a year in Social Security goes to households with incomes of more than $25,000 a year) while giving more help to those in real need (one-third of elderly single women get by on less than $4,000 a year...
...The executives, for example, like to fly their sharp little planes into overcrowded airports during peak hours...
...It's a better approach-if universally applied...
...Moreover, the Byzantine route system-company X could haul running shoes (but not socks) from Portland to Carson City, but only by way of San Francisco-guaranteed plenty of extra driving...
...But more to the point, private hospitals "compete" already, and they haven't shown themselves very efficient...
...The administration proposed doubling the private pilots' fuel tax, which wouldn't begin to cover their fair share of the system's cost...
...Overall, Reagan's conservatism has come down much harder on AFDC recipients than it has on, say, the owners of synfuel plants or his supporters among organized labor...
...Replace The M-1 Tank Reagan has ordered these tanks for $2.7 million each...
...Similarly, the administration has adamantly opposed the Equal Rights Amendment and wants to deny women the right to choose whether to have a child...
...Here's how...
...Since these majors control about 70 percent of the "old" gas, Reagan's plan would mean perhaps $70 billion to $100 billion in their pockets...
...He had better luck in getting federal employees into the Social Security system, but even this was only a partial victoryit will apply only to new employees (see "Hatch 22," Teresa Riordan, November 1983...
...With 50 percent more long-haul carriers, there is real competition, and in 1982 the union had to settle for a three-year wage increase that was only half the rate of inflation...
...We'll get so much, prices will come down...
...That means fewer projects and fewer jobs...
...You are forgetting about the Teamsters, who extracted from candidate Reagan a promise that DavisBacon would not be sliced...
...There's the Peace Corps, which Reagan has tolerated grudgingly, and VISTA, which he tried unsuccessfully to kill but which still has been cut substantially...
...They had lost the ability to distinguish entitlement from need and had come to view automatically any cut in spending as an affront to the unfortunate...
...We drew up a sampling of such issues-a "Reagan scorecard'- to help our readers follow the action...
...he wants the unions to back him in 1984, as they did in 1980...
...As our enemies know well, we already have one-the Marines...
...Federal price controls have kept production down, and controls on newly discovered gas expire in 1986...
...They enjoy their own enclave of socialism, a system of airports and air traffic control that is paid for mostly by a tax on commercial airline tickets...
...The result is that, while Reagan has cut programs like AFDC and food stamps, most of the frivolous subsidies to the well-off remain...
...The writer was not a welfare rights organizer...
...We need better compensation for good teachers, and an end to rinky-dink certification requirements that cause bright people to go into other professions...
...that the Marines (under Carter and Reagan) declined to buy...
...Because of a law called Davis-Bacon, which requires that construction workers get top-dollar on projects using federal funds...
...We would hope that even the wealthy would think of that...
...But Reagan had to let a federal employee whose job was eliminated "bump" another of lesser seniority, and so on down the line, forcing out the young (however able) in favor of their elders (however inept...
...Reform American Capitalism Reagan thinks he can solve our economic problems with tax cuts and less regulation, but these don't begin to reach the underlying problems of American capitalism...
...and that David Stockman, during the summer of '81, tried to convince President Reagan to cancel...
...None of this should be surprising...
...In the workplace the administration showed more concern with protecting employers from OSHA inspectors than in protecting workers from hazards...
...The answer is to unify all income support programs-Social Security, welfare, unemployment, and veterans compensation-into one program of insurance against need...
...Reagan has made a better effort on the civilian side...
...Reagan's solution was to appoint a bipartisan commission so that Democrats would have to take some of the heat for the inevitable cuts...
...We can do the same for industry...
...So we understand where the regulationhaters in Reagan's camp are coming from...
...For one thing, comparison shopping is a bit difficult when you've just had a stroke...
...Noble was not exactly a disinterested party...
...He could go on to dismiss the current demandfed recovery as the result of those massive, Keynesian, and typically Democratic deficits...
...Just as few people in the Defense Department and the Pentagon would trust, say, George McGovern to reform the military bureaucracy, few bureaucrats in the nonmilitary federal government, let alone the public at large, ever believed Ronald Reagan's ultimate motive for reform was to make the government work better...
...In that article we suggested that the Pentagon stop procurement of the MX missile, the B-1 bomber, Nimitz-class aircraft carriers, AH-64 Attack helicopters, Bradley Fighting Vehicles, and a host of other faulty and outlandishly expensive weapons-and start supplying our forces with the sensible and effective weapons they need...
...Reagan should have canceled the F-18, spent half the money on more A-7s for the Navy and AV -8 Harriers for the Marines, and used the other half to cut the deficit...
...The best place to start would be to restore the draft...
...But don't forget which union supported Reagan in 1980, and signed off on the appointment of Nevada trucking attorney Reese Taylor as ICC commissioner...
...The travails of Continental Illinois Bank in Chicago should be a warning about giving banks too broad a leash...
...Sheltered from life's rigors, the Teamsters could demand just about any wage they wanted, which the trucking companies would pass along to their shippers...
...It tried to derail the passive restraint requirement for cars...
...Congressional opposition was part of the reason, but more important was the fact that the oil companies were dropping out...
...And when the president suggests it, an attack on the minimum wage itself lurks just offstage in the rhetorical wings...
...This rush to deregulate sometimes angered those members of Reagan's own constituencybig business-who had gone to some expense to comply with various regulations...
...Even the hawks at the Heritage Foundation have found themselves protesting the defense community's dangerous tendency to saddle us with budgetbusting high-tech weapon systems that don't work...
...to destroy the public schools through tuition tax credits...
...Buy Small Subs You're the Soviet military officer in charge of tracking down our nuclear submarines in time of war...
...Unfair, yes...
...Have you tried lately to test the chemical contents of the food at the supermarket or the safety of the chemicals to which you are exposed at work...
...Health and safety regulations must be evenly and fairly applied so that all the companies in an industry are burdened equally...
...But much as Robert McNamara did with the TFX, Brown decided to make the plane do multiple duty and turned it into a fighter and light attack plane for the Navy and the Marines-four functions in all...
...Kill The Synfuels Corporation If there ever was a Carter program that the Reaganites should have wanted to kill, it was the Synthetic Fuels Corporation...
...These enable young people to develop a commitment to serve at a formative period of their lives and should be expanded...
...More Reagan liberalism to report...
...Over the past several years the safeguards Congress erected around the banks to prevent a repeat of the Great Crash have been falling...
...Even if that option were foreclosed, they could simply perform more procedures, or refuse to treat Medicare patients...
...But the step was far too timid...
...It should be a warning to taxpayers as well...
...To critics who derided the cruelty of his budget cuts, he would respond, in effect, "I am going to create prosperity and jobs...
...Restore the Dignity of Yachtsmen and Private Pilots You'd think there'd be a better way to spend $150 million than on free Coast Guard service for the nation's 13 million owners of boats and yachts...
...Certainly the president and those close to him had not set much of an example in their lives prior to Reagan's victory, nor have they in the policies they've promoted since...
...Second, if he did get the government involved he would seek to maximize opportunities for individual entrepreneurs...
...That's what most people did...
...Would the mothers of Great Neck have sat quietly by while the president sent off their sons and daughters to fight in Lebanon...
...You fudge...
...Included in the bill, for example, were the 50,000 members of the volunteer Coast Guard auxiliary, who were providing rescue services, not consuming them...
...Let's talk gas, which is clean, abundant, and our best chance to break OPEC for good...
...True Concern for Defense Ronald Reagan's enthusiasm for bureaucratic reform doesn't extend to the military bureaucracy...
...The volunteer army is a misnomer...
...The administration's conversion to synfuels was complete when Tenneco and other partners in North Dakota's Great Plains Coal Gassification Project-the largest synfuels undertakingthreatened to pull out if they didn't get another billion on top of the two they had already received...
...Minorities are beginning to question the privileges of organized labor, and both the National Council of Black Mayors and the National Association of Minority Contractors have lined up behind the bill...
...David Stockman saw the light, but in short order he was persuaded to ease up by people like Jim Wright, the House Majority Leader from oilrich Texas, and Jim McClure, the Republican chairman of the Senate energy committee...
...And isn't it better that at least some kids get jobs this summer instead of hanging out during those steamy months...
...Budget cuts, tax cuts, and deregulation-but most of all, tax cuts-were going to create an orgy of investment and enterprise after years of liberal impotence...
...But the Reaganites went further...
...What was hard to take was the hypocrisy...
...It also means poor people in federally sponsored housing pay higher rents...
...But we already have the most competitive medical system in the world-and the most expensive...
...It's not the bureaucrats who are running up the bill...
...They've even paid back $6.5 million in ill-siphoned gains...
...But his administration has been acting as cheerleader and has been pushing a bill sponsored by Senator Jake Garn that would leave the banks free to do just about anything they want...
...Is the Pope a Lutheran...
...So it's probably safe to say the president didn't read our "35 Ways to Cut the Defense Budget" (April 1982...
...Reagan cut it even further in 1981...
...But the administration has used elaborate "costbenefit analyses" as a means to clog the regulatory process...
...But funding has since crept up, and now it's just slightly lower than it was when Reagan took office-about $700 million...
...For example, after both Exxon and Bacardi had spent a bundle to comply with water quality regulations, the EPA pulled the rug from beneath them by rolling the regulations back...
...Eliminate Impact Aid Presidents since Ike have tried (and usually failed) to cut this federal subsidy to school districts "impacted" by the presence of large numbers of federal employees...
...equality of opportunity among those in different life circumstances...
...The result: we got takeover battles and companies selling tax breaks to one another because they had more than they could use...
...Ditto the Health Service Corps (see "Crack Down on the Doctors," page 32...
...What's that...
...The only way to do that is to put all doctors in the employ of the government...
...Funding levels for these airports have quadrupled since Reagan took office...
...Well, we got it...
...The trustees now have no control over investments...
...It dragged its feet on the deadly fumigant EDB and had to be pushed and shoved into approving a tougher rule relating to asbestos, which is linked closely to cancer...
...For more than a decade, the prevailing liberalism had taken the nation's productive machine for granted and had set about the pleasant task of redistributing the fruits and protecting workers and the public from undesirable offshoots, like pollution...
...In the fifties, when Eisenhower wanted to fire 100,000 federal workers, he just issued pink slips...
...Reagan should have listened to conservative economists like Milton Friedman and asked Congress to end the Fed's independence...
...A salve for inflation has become a cause...
...The comparability measure also ignores the difference between what federal workers do and what their inflated job descriptions say they do, and it is based on only the highest-paying 3 percent of American business organizations...
...They could have been spread so widely as to be virtually invulnerable to a Soviet first strike...
...One reason was that medical students swing more weight than welfare mothers...
...Then there won't be a need for these handouts that you are so enamored of providing ." Reagan was right to put enterprise and production-rhetorically, at least-at the center of his program...
...He'd push to repeal the remaining provisions of Carter's harebrained Fuel Use Act, which actually pressured industry not to use gas...
...But what he's cut in subsidies to the well-off he's given back in tax cuts many times over...
...The M-1 is an unbelievable gas guzzler...
...It worked so well that soon Europe was prospering...
...the appointment of Caspar Weinberger as Defense secretary, and Weinberger's subsequent refusal to commit himself to a fixed spending boost, is a hopeful sign...
...If you are a worker, you're a sucker to take a wage cut, however essential it may be, if it produces greater returns for the managers and owners...
...This can increase wage costs on such projects by 25 percent or more...
...Carter started it and the Reaganites kept the ball rolling...
...As he put it in his inaugural address, "Government is the problem" Had he shown a real desire to make the government work better, he might have achieved more substantial reforms...
...He'd stress conservation, which involves oldfashioned thrift and a lessening of me-generation self-indulgence...
...he could simply reread his 1980 campaign speeches...
...He lost not only in the Democratic House, but also in the Republican Senate...
...Now that this agency's superfluity has been demonstrated so clearly, we consider Reagan's failure to abolish it a defeat...
...It was almost euphoric at first...
...Despite the administration's talk about deregulation and free markets, when Continental Illinois tottered, it was the federal government-which means the taxpayers-who ramp to the rpcrne Enterprise and Productivity Imagine that Ronald Reagan had lost the 1980 election to Jimmy Carter and it was Carter who had given us the economic policies of the last four years...
...We once developed a policy for long-range investment in private home construction that was revolutionary...
...The pilots and deadbeat executives managed to turn this proposal into a net gain for themselves...
...The resulting plane, at an exorbitant cost of $27 million each, could perform none of its functions as well as the F-15 it was to replace...
...Jonathan Rowe is an editor of The Washington Monthly...
...Even that inveterate Europhile Henry Kissinger recently suggested that America might pull 50 percent of its troops out of NATO to give our allies a little incentive to do more for themselves...
...To his credit, Reagan gained repeal of part of the act already...
...This pleased the seafarers unions because it meant the operators for whom their members worked would not be under so much pressure to cut labor costs...
...But what about the country...
...Indeed, his defense budget requests-more than $300 billion for next year, almost $400 billion in 1987-seem to grow right along with his faith in whatever the military brass tells him...
...Back in October 1980 Reagan told the National Association of Retired Federal Employees that he would not eliminate their semi-annual COLAs...
...This is one campaign promise we were glad to see Reagan renege on...
...Deregulating interest rates seemed like a great idea...
...Ed Meese had a chat with Ed Noble, the Synfuels president, and a check for $790 million was on its way...
...And most of these doctors-average income, $99,500- are Republicans...
...Why should the taxpayer subsidize the postage of rich magazines that can boast to advertisers, as Smithsonian does, that their average reader earns $52,000 a year...
...End The "Comparability" Scam When the government compares the salaries it pays with those paid by the private sector for the purpose of determining federal workers' "comparability" raises, it ignores the federal employees' lavish pensions...
...Fair enough...
...On this one, Reagan's error is his own...
...You haven't read about it lately, but it's still there, a time bomb under the national economy...
...But before you conclude that Reagan is a fearless crusader against featherbedding and inflated wage scales, or that Mondale is the only candidate of special interests, read on...
...The 15-percent cutback in civil rights enforcement by federal agencies...
...Davis-Bacon was enacted during the Depression, when southern contractors roved the country with gangs of impoverished blacks, bidding a pittance on federal projects, which were the only ones around...
...Presser, who must have a special in-box for subpoenas, delivered the union to Reagan in 1980, and is an occasional guest at the White House...
...Air traffic controllers are so concerned about collisions with 747s that several years ago the Federal Aviafion Administration developed a system of "reliever" airports for them...
...Cancel The F-18 This is the plane with the $13 billion cost overruns that the Navy (under Carter) opposed...
...Since we had the money, we paid most of the bill...
...The president gave out tax breaks that would amount to half a trillion dollars over the decade (Congress halved that the next year), with 80 perent of it going to the largest .1 percent of all corporations...
...But doctors don't have to accept such DRG-based payments as full compensation...
...Sometimes it creates those needs...
...needs a crack force ready for deployment anywhere in the world...
...Consider, for example, the administration's plan for getting Medicare hospital costs under control...
...and at 1800 degrees its exhaust is hot enough to set underbrush and infantrymen on fire, not to mention that it makes itself a perfect target for Soviet heat-seeking missiles...
...Their operating premise was not how much regulation we need, but how much we can get rid of...
...And they seized upon it as a way to make the right-wing agenda take flight...
...Little in the preceding would dispute the widespread belief that Ronald Reagan is the president of the wealthy...
...The 29-percent cut in the top rate on investment income and the drop in the top rate on capital gains to 20 percent didn't apply just to productive investments like new stock issues...
...The administration's emphasis on "voluntary compliance"showed contempt for companies that obeyed the law by not making sure their competitors obeyed...
...Eisenhower warned us...
...Consider what he did to the National Health Service Corps...
...We were wrong, and so is he...
...Too often our free enterprise system says to the good guy, "You're a sucker...
...It's not a substitute for the kind of broad-scale, WPA-style jobs program the nation desperately needs...
...Obviously the U.S...
...But the Reaganites didn't reject just the excesses of liberalism...
...Lean On NATO After World War II, America decided to help its European allies (including newly-formed West Germany) maintain a common defense against the Soviets...
...To the president's credit, however, he did the next best thingrewrite the regulations so that "prevailing wage" no longer means "very top wage," thereby eliminating more than half the overcharge in the process, according to the Congressional Budget nffirp Push Youth Wage No, it's not the panacea for the nation's two million-plus jobless teenagers (45 percent of them minority) that the president says it is...
...Rather than charge these profitable publications the full price for overnight delivery, for which they currently pay a few pennies, the Postal Service plans to expand the number of eligible newspapers and magazines, while the rest of us pay $9.35 for similar assurance of fast service...
...But the reason Reagan's program didn't pan out went deeper...
...Reagan's bureaucrats are still working on it...
...Reagan calls it the "Central Command...
...In their eagerness to create a bureaucracy to correspond to every problem, liberals had forgotten that voluntary helping is still the best kind...
...A recent study found that investor-owned hospitals-the kind the Reaganites like best-ran up 8 percent higher costs (and charged 23 percent higher fees) than their nonprofit counterparts...
...The program was whittled back in the seventies...
...It was David Stockman, not yet a congressman, who observed in an article in The Public Interest (titled "The Social Pork Barrel") that most liberal social programs-from the farm program to aid to education-subsidized the middle class rather than the poor...
...Synfuels production would consume enormous amounts of water and threaten the air and land...
...Clean Up Union Pension Funds The Teamsters Central States Pension Fund, once a synonym for self-dealing big union bosses, is being cleaned up...
...Paul Glastris is a Washington writec Research assistance for this article was provided by Audrey Grumhaus and Jamie Merisotis...
...The liberals made much of the way the tax cut favored the rich...
...How would Ronald Reagan, back on the campaign trail in 1984,' rip apart the last few years of "Carternomics...
...More than anything, we need a national leader to rally the nation to the cause...
...Why shouldn't we get a high rate like the -big boys...
...A work requirement would apply but not to the retired or to women with preschool children...
...a commitment to service that rises above the acquisitiveness to which our country is prone...
...The biggest surprise-and disappointment-has been defense...
...after all...
...A ripe issue for President Reagan...
...Reagan and his advisors saw this...
...But another four years of Reagan would leave even more...
...The president tried once, in the Employment Act of 1982, to get a youth subminimum wage...
...A defense-minded president would seek a diverse energy system with many small units rather than one offering a few inviting targets for enemy missiles...
...After 20 years of reign, liberals had become defenders of governmental programs and their constituencies...
...Banks are getting into sideline ventures-as they did in the twenties-and have figured out ways to operate across state lines as well...
...Would he get the corporations off the dole and attack waste and abuse at the Pentagon, where it is as debilitating as it is endemic...
...The reason the F-18 is such a costly dud is that Carter's defense secretary, Harold Brown, planned it with MBA notions of efficiency...
...The modern liberal tradition began with this recognition...
...Jimmy Carter smelled a rat in these "comparability" ratings and began gathering the data to make more sensible comparisons with private sector salaries...
...If present trends continue, Medicare alone will be a trillion dollars in the hole by the year 2005...
...It's why we wound up spending our way to recovery, just like the Democrats used to do...
...Of even greater importance is the question of deregulating the banks so they can go into other businesses...
...First, he would end all subsidies...
...Check the Banks Here's one on which Reagan did as we suggested...
...The interest rates we were paying to borrow weren't coming down because the rates we were receiving on our deposits were so high...
...The administration also asked, and didn't get, permission from Congress to change the way RIFs ("reductions in force") are carried out, by placing greater emphasis on performance...
...Still, we kept paying for NATO, and today we devote twice the share of our economy to defense that our NATO allies (averaged) do-$127 billion to the defense of Europe and $47 billion to defend Asia...
...Sink Merchant Marine Subsidies Americans were spending half a billion dollars a year to prop up the American shipping industry (for "national security" reasons) when Ronald Reagan came to power...
...Would-be competitors had to apply for authority to haul each commodity over every route they wanted to drive...
...Everybody knew about it and nobody would admit it was there...
...The Reaganites were right as well to raise the issue of volunteerism...
...We could save billions by raising the minimum from 20 to 30 years, but Ronald Reagan won't touch this one...
...It made a lot of sense when it helped poor rural school districts deal with the children of the thousands of servicemen thrust upon them by the construction of large military bases within their boundaries...
...He preserved billions in tax breaks for oil companies, kept the Synthetic Fuels Corporation subsidy (see above), and went on such a spending spree for nuclear energy that the arch-conservative Heritage Foundation called him "virtually a socialist" in this regard...
...Small truckers continue to run a paperwork gauntlet, and companies can still fix some rates among themselves...
...If Reagan were really thinking about the country, he'd let the controls on new gas expire and leave controls on old gas in place...
...The nation's largest cities will have over a hundred billion dollars of water works repair over the next 20 years...
...It's more important that producers have access to money at reasonable rates than that money earn more interest...
...The sucker factor can be eliminated...
...Freed of the need to provide for most of its own defense, Europe outpaced America by building better cars and machinery than we did...
...And his Department of Energy offered enriched uranium to the nuclear industry for $6.7 billion less than what it costs the government to produce it...
...National Service If the president really wanted to see volunteerism flourish, he would promote a service ethic in our national life...
...But for ship operators, and hence seamen's unions, Reagan was very accommodating...
...Remember the proposed tax exemption for "seg schools...
...The law effectively stopped this exploitation...
...This attitude was typified by the Presidential Task Force on Regulatory Relief, which the president appointed after his election...
...Zoning regulations in wealthy suburbs somehow escaped their critical gaze...
...As long as the "fee-for-service" system is left intact, these "reforms" will not get to the heart of the problem...
...Almost 46 percent of mothers with children under three are working, and by 1990 one-half the country's preschool children will have a mother who works...
...All hospital patients are now categorized according to one of 467 Diagnostic Related Groups (DRGs...
...But he did such a poor job on the details that the proposal became easy prey for the boat lobbies...
...was Reagan's issue of issues, the sun around which everything else revolved...
...He might begin by attacking the deficits...
...So while federal workers complain that they are "officially" underpaid by 18 percent, the average salary (not counting benefits) of the Postal Service's 600,000 employees was more than $22,000 last year...
...But today, the main effect of DavisBacon is to pad the salaries of building tradesmen, who already make 50 percent more than other U.S...
...Given the inflationary anxieties of America in the seventies, it seemed reasonable to offer these adjustments to federal retirees...
...Poor people were admonished to pull themselves up by their bootstraps, while people making more than $200,000 a year got $17,403 in tax cuts for exerting no extra effort at all...
...Crack Down On The Doctors Now here's a dilemma for Ronald Reagan...
...Fairness would take care of itself...
...Reagan should have abolished this program and used the money to provide relief to needy school districts-whether "impacted" by the presence of federal workers or just plain poor people...
...Here was $88 billion -worth of government intrusion into the marketplace to subsidize the production of synthetic fuel that is too expensive and that we don't need (see "The Energy Crisis: How to End It," Gregg Easterbrook, October 1980...
...No chance of that now...
...It could save $5 billion off the strained defense budget and would encourage patriotism in young people...
...The Party of Lincoln, after all...
...The mere fact that lawyers and accountants would have hated it suggests what a boost to productivity a change to a simplified tax might bring...
...At the very least he'd promote energy sources that could hack it in the market...
...Justice Department civil rights chief William Bradford Reynolds has reversed the department's prior policies in every area...
...Then he granted ocean liner cartels increased immunity from antitrust laws...
...Some day there is going to be a man sitting in my chair who has not been raised in the military services and who will have little understanding of where slashes in their estimates can be made," Ike wrote back in 1956...
...For another, people tend to go to the hospitals where their doctors practice...
...He didn't have the nerve...
...Such tinkering is doomed to fail, for a single reason: the "marketplace" doesn't work unless you are the one who writes the bills...
...If you chose the big mothers, then you understand why the Trident is good for the Russians...
...It saw government as a means of providing what enterprise alone does not: fair play between, say, employers and employees...
...Of the current spate of mergers, acquisitions, and leveraged buyouts, he could say that, like adultery and illegitimate children, they may be an ineradicable part of life, but a tax code that rewards such behavior is clearly wrong...
...Get Energy Off the Dole If Reagan were a real conservative, what would he do about energy...
...Besides, it will be nice to have the Fed to blame if the economy is sputtering this fall...
...Reagan's record on proposing reforms for the bureaucracy is better, although getting those reforms enacted has been a problem-to a great extent, because of the power of the federal employee unions...
...Since a portion of any new subminimum wage jobs would go to clean-cut kids from the suburbs instead of teenagers from the South Bronx, the need for a targeted jobs program is imperative...
...Possibly the administration was as interested in cleaning up Teamster President Presser, an ex-Central States trustee, as in cleaning up the fund itself...
...its 60 tons are too heavy for many bridges in the European countryside it's supposed to protect...
...What about the nation's private pilots and Lear-jetting executives-the ones who fly into Washington to denounce welfare cheats and freeloaders...
...What about Japan and Western Europe, which depend on the Gulf for about 75 percent and 50 percent of their oil, respectively...
...Before deregulation the Interstate Commerce Commission had protected the trucking industry-and the Teamsters-behind a fortress of red tape...
...An administration that has split hairs about whether working welfare recipients are "truly needy" seems perfectly willing to provide welfare-er, "insurance"-to people who demonstrate substantially less need...
...Ask the ten qualified citizens who, on average, apply for each federal government job opening...
...The Carter people broke up this crazy arrangement, and the Teamsters are feeling it...
...Set Trucking Free "Disastrous" was the way Teamsters President Jackie Presser described the partial deregulation of the trucking industry that occurred in the last year of the Carter administration...
...But much of the money now winds up in communities that clearly don't need it-for example, well-to-do Washington suburbs like Montgomery County, Maryland, and Fairfax County, Virginia...
...But it's still "Son of Iranian Rescue Mission"--the same bureaucracy-intensive reorganization that we described in our original scorecard...
...At the very least you might expect a conservative president to deregulate in a way that minimized paperwork...
...But would Reagan be conservative when it hurt...
...It's really a professional army that relieves privileged young men and women of the obligation to serve their country...
...Not only did Reagan endorse Carter's Trident, he's commited $92 billion to Trident II into the 1990s...
...he should have abolished them altogether...
...It expedited approval of new drugs like Oraflex, which was later connected with over 40 deaths in Britain...
...But anyone whose life touches beyond places like Pacific Palisades and the banquet rooms of the better hotels understands that enterprise, important as it is, leaves many needs untouched...
...Education Public education has been the nation's single largest commitment to equal opportunity, and it's failing...
...By 1983, the administration had thrown in the towel...
...And Reagan would also seek repeal of the fuel adjustment clause, which enables your gas company to pass along fuel price increases to consumers, no questions asked...
...Meanwhile, savings declined...
...The president's case would be a lot stronger if he expanded the Summer Youth Employment Program, which gave jobs to 700,000 last summer...
...The initial opposition to the Voting Rights Act...
...They ought to finish any decade now...
...So what do you do when you're a Republican administration, torn between the deficit and your constituents in the AMA...
...The White House sent it back to DOT for "further study...
...One way to truly help those able to workand to help the country as well-is to bring back the WPA...
...Yet it was free market with a vengeance for solar, conservation, and other alternatives that offer opportunities for entrepreneurs and that are much harder for the Russians to knock out...
...Instead, the administration has shown the kind of disregard for human life that gives capitalism a bad name...
...It's the hospitals, drug companies, medical equipment suppliers, and most of all, the doctors, who prescribe the drugs and order the surgery...
...Equality was just more meddling in private decisions...
...Reagan has made some worthy attempts to reform the civil service and get a few interest groups off the dole...
...The revenues he gave up in "Kemp-Roth" tax cuts he could have used to ease the pain inherent in a transition to a simplified tax...
...On defense in particular we felt reason for optimism...
...But it wouldn't have been so bad if those rich folks had produced that promised sea of investment that was going to lift everyone's ships...
...They rejected the idea of a constructive role for government, period...
...This is a score for the administration, although the Carter people, not the Reaganites, started the prosecution...
...Conservation he spoke of as almost immoral...
...Yet the administration has cut programs from which day care is funded by 20 percent...
...He has pandered to selfishness and self-pity...
...They applied as well to tax shelters, race horses, real estate speculation, antiques-all the pecuniary diversions that cause our economy to go nowhere...
...We need a curriculum that is more stimulating and demanding...
...Even the most adroit tax lawyers would have trouble demonstrating that the recipients of this subsidyExxon, Tenneco, and others-meet the standard of "truly needy...
...Then there's the administration's proposed "voucher" plan-a shot of the Milton Friedman approach...
...This view of the world is well suited to a president who likes his afternoon nap, and to a class of individuals who share their righteousness over dinner at the club...
...About 2,000 people entered the program each year...
...Pop The Colas A COLA is, of course, shorthand for cost-ofliving adjustment...
...As Phillip Keisling pointed out in these pages a year ago ("Soldiers of Good Fortune," May 1983), early retirement in the military has proven to be not only a tremendous drain on the Treasury-the military retirement system is currently operating at a deficit of $600 billion-but also a major reason why the military has a hard time holding on to some of its most skilled personnel...
...Reagan has cut this number to 150-and will likely reduce it to zero if he wins a second term...
...Slice Davis-Bacon Why would churches and other nonprofit groups try to avoid federal money when they are building low-income housing...
...But the administration's own antigovernment ideology is also to blame...
...Is Reagan sympathetic to this...
...It was originally intended to be a light-weight, low-cost alternative to the Air Force's F-15 fighter...
...The big trucking companies kept employees at the ICC filing room to alert them to any potential competition, so they could file formal appeals that could drag on for months...
...For the price of each of these lemons the president could have purchased three of the more reliable M-60s...
...THE OFFICIAL 1984 REAGAN SCORECARD BY JONATHAN ROWE AND PAUL GLASTRIS I. The Reagan Conservative Scorecard...
...The likely alternatives leave something to be desired...
...They can, and usually do, bill their patients for more than Medicare allows...
...Now for the bad news: that is less than 1 percent of the federal work force, and the cuts were made undiscriminatingly...
...In a burst of conservative indignation Reagan might even proclaim that all manipulations of the tax code, such as accelerated depreciation and "tax leasing," are inherently inefficient because they distort investment decisions in the private sector...
...instead, the president wants to cut it by 12 percent...
...After Reagan took office, the Department of Transportation drafted a "Phase II" deregulation bill to do the job a conservative president presumably would want done...
...The draft is just one part of national service...
...Reagan wanted to make the yachtsmen pay their way by buying license stickers the way hunters buy hunting licenses and thereby support wetlands preservation...
...Still, the president is right in proposing a lower minimum wage for teenagers during the summer months...
...The machine itself was permitted to erode...
...train them for free, pay them a reasonable salary, and tell them where they're needed (see "Radical Surgery," February 1983...
...Medical costs are out of control, taking about one dollar out of.every ten we spend...
...Before he was elected, the Corps was paying for the education of some 6,500 doctors and health care professionals, at an average annual cost of about $10,000 each, in return for their agreeing to serve for several years in places where they are desperately needed...
...Indeed, when Donald Regan demonstrated interest in the idea of a means test for Social Security during arecent appearance on "Meet the Press," the White House quickly disavowed the idea (see James Fallows, "The Stoning of Donald Regan," June...
...Family and worker ownership should be encouraged so companies are free to do what is best for themselves and their communities in the long run...
...These proposed low-cost diesel-powered subs would have been one-fortieth the size of the Trident and about one-tenth the cost...
...We even applaud them for abolishing the rule that required buses and subway entrances to have special lifts for the handicapped-an expense that was far more cumbersome than having subsidized shuttles for those who need them...
...Washington Monthly's Reagan Scorecard" February 1981 We didn't support Ronald Reagan in 1980, but we did have to acknowledge that a conservative president might bring about some badly needed reforms...
...Remember, this is the man who originally opposed Medicare as too "socialistic...
...Doctorslike firemen, policemen, and others who protect our lives and society-provide such an important service that they possess the power to blackmail us, to force us to accept the terms (and fees) they dictate...
...Medicare will pay a set fee for treatments in each of these groups, instead of letting the hospitals run up the bill...
...Worst of all, in a series of Army tests in 1982, the tank's dustsensitive engine and transmission often broke down...
...Cutting Red Tape Anyone who has endured an OSHA inspection, or filled out an income tax return recently, knows that the government can be a genuine nuisance...
...The Reaganites boasted that lower tax rates would diminish the use of tax shelters, but Business Week predicted, late in 1981, that Reagan's plan would give the shelter business a "hefty booster shot" Sure enough, tax shelter filings at the SEC leaped more than 50 percent-from $5.5 billion in 1982 to $8.4 billion in 1983...
...The government employees' unions proved a powerful opposition to sensible reform, but they were helped in whipping up the fury of their members by Reagan's undisguised contempt for the idea of government service...
...But he cut the Internal Revenue Service's enforcement budget-the one government expenditure that actually makes money...
...The one case of regulators run amok that Reagan truly needed to address was the Federal Reserve Board...
...Reform The Civil Service First, the good news: Ronald Reagan has reduced the size of the federal bureaucracy by about 25,000...
...But by what standard can we justify a system that taxes the $14,000-a-year secretary with two kids and gives that money to a Malcolm Forbes...
...Health and Safety Though traditionally a liberal concern, one might have expected the president to do better here...
...The tragedy is that Reagan had a golden opportunity to gain the kind of tax reform a true conservative should want-an end to all loopholes and deductions, with a corresponding reduction in rates...
...Here are a few more suggestions Reagan didn't take us up on...
...It opposed labels showing the salt content of food and whether meat contains ground up bones (even though an informed consumer is key to free market theories...
...Reagan should like the draft...
...Now let's just hope he doesn't have to use them...
...Still, the Carter deregulation was only partial...
...Moreover, teenagers often don't have the skills to merit that amount...
...Hate to be a kill-joy, but Reagan isn't thinking about (or perhaps he is) the oil majors, who control about half the natural gas...
...Reagan and his controversial head of the Office of Personnel Management, Donald Devine,, deserve some credit for trying to get Congress tc approve a merit pay program for all federal employees, but the Senate Civil Service Committee let the unions rewrite the bill to their liking before the House committee killed the idea outright...
...Only retirees with incomes of more than $32,000, for married couples-that is, those earning well over $10,000 more than the median income-would be subject to the tax...
...If you are a manager, you're a sucker to think of the long-range interests of your company when promotions and bonuses-as well as the regard of Wall Street and your shareholders-are based on your company's short-term profits...
...And while they spoke of volunteerism and service, it sounded suspiciously like a romanticized cop-out...
...He'd point to the epidemic of business failures, the record-high real interest rates and trade deficits, the lagging productivity and capital formation, the drop in the savings rate-and predict economic doom...
...Bring Back The WPA Reagan wasn't wrong in saying that a strong economy is the best way to help the poor...
...Another was that Stockman worked for a president who didn't care much about the poor to begin with...
...Reagan's other great contribution to the education debate-besides budget cuts-was his support of prescribed prayers for school kids, which will do wonders for those struggling to escape the poverty of the South Bronx...
...Defund the Rich "Income redistribution with a vengeance, but unfortunately in the wrong direction," was the way one writer in the mid-seventies described a federal program that subsidized the medical education of kids from wealthy families...
...workers...
...Tamper (More) With Social Security During the 1980 campaign, the disaster looming in the Social Security system was as unmentionable as a debauched aunt...
...For the most part, the federal system of retirement-remains out of control...
...Repairing the federal highway system will require 250,000 people a year for the next decade...
...Remember the nation's one-trillion-dollars'-worth of sagging "infrastructure...
...Which would you rather Reagan chose: a swarm of light, mobile, missile-bearing subs or a fleet of 20 that were half as big as a World War II battleship, made lots of noise, and half of which would be in for repairs at any given time...
...This change should of course be phased in with due regard to the expectations of older people who have made their plans on the basis of existing programs...
...The Reagan Liberal Scorecard As readers of this magazine know, we do not disparage enterprise...
...And if you are an owner, you're a sucker to make health and safety improvements that could drive your costs above those of your competitors...
...Reagan's new Secretary of Defense was, after all, the man who had been dubbed "Cap the Knife" as Nixon's OMB chief and had expressed skepticism regarding the Pentagon's appetite for our tax dollars...
...In the past, people with a lot of money could buy Treasury bills at high market rates, while you and I got a measly 5th percent on our passbooks...
...Yet it was this area that seemed to provide the clearest window to the administration's id...
...And don't forget that when Reagan first came to Washington as presidentelect, his first courtesy call was to-guess who?-Jackie Presser...
...But the president and those around him elevate acquisitiveness into an agency of the divine...
...Devine asked Congress to raise employee contributions to the federal employee retirement fund from 9 percent to 11 percent, to base pensions on an employee's best five salary years rather than his best three, and to raise the minimum retirement age from 5.5 to 65...
...Through Medicare, Medicaid, and the tax deduction offered for health insurance premiums, the federal government underwrites almost half the nation's $350 billion medical bill...
...But something was lost in the translation of Stockman's ideals into practice...
...Most of this money went to merchant seamen, whose union contracts, with their featherbedding agreements and high wages, put labor costs as much as five times higher than those of foreign-flag ships...
...He would also (though reluctantly) establish standby gas rationing as security against blackmail in the Middle East...
...See Timothy Noah, "Bring Back The WPA;' September 1982...
...While there may be some argument for subsidizing those that otherwise really couldn't afford to publish, a big chunk of the...
...This will turn the gas fields into rabbit warrens of production...
...You're not working any harder today than you were before the new tax cuts...
...postal subsidy today goes to hugely profitable publications like Smithsonian and National Geographic...
...At one point, 83 percent of the subsidies SFC had issued were to companies that did business with his family energy business...
...Civil Rights and Equal Opportunity This is another area in which one would expect a Republican president to get at least a passing grade...
...Who better than Ronald Reagan to cast such vestiges of government regulation out of the temple...
...Another postal subsidy to discontinue is redtag service that expedites delivery of publications like Time, Newsweek and The Wall Street Journal...
...Reagan did freeze subsidies to shipbuilders - and then turned around and handed the shipbuilding industry contracts for 200 new vessels for his new "600-ship navy...
...Workers who own stock will accept short term wage cuts because they know they will share in the resulting profits...
...Don't forget that presidential confidante Michael Deaver represented the California Trucking Association in his political consulting days...
...One favorable result was that legislation was passed to tax half the Social Security benefits of upperincome retirees, thus establishing the principle that Social Security should be geared to the recipient's need (as should all government income supports...
...These examples suggest that the president is a little weak on certain business concepts, such as "accounts receivable...
...Through such things as financial interlocks with pipelines and arrangements by which they market gas for independent producers, the majors have a good deal of control over the price for which decontrolled gas would sell, and they aren't awfully inclined to make gas so cheap that they can't sell their oil...
...The ostensible purpose for pouring billions into this new command structure-which just aggravates the military's legendary interservice rivalries-is to protect access to Persian Gulf oil...
...As for cutting it in the market, the words to remember are Seabrook and WPPSS ("Whoops...
...The Fed's tight money policies have held the whole economy hostage...
...And conservative intellectuals like Irving Kristol and the Hoover Institution's Melvin Krauss would have backed him up...
...Making matters worse, the established truckers had special immunity from the antitrust laws to fix rates on a regional basis, thus freeing them from rate competition as well...
...Whatever waste he's eliminated in social programs he's multiplied in defense...
...It's also a tremendous porkbarrel project, built by three different contractors-McDonnell-Douglas, Northrop, and General Electric-all with the congressional contacts to keep on building...
...We would reimpose the interest rate ceilings and apply them to money market funds, too, so ,there would be no unfair advantage...
...Instead, Reagan boosted by 20 percent the share of our GNP going to defense and continued to devote the usual third of that to our allies...
...The Social Pork Barrel" was on the mark, as far as it went...
...The problem is that within a few years this automatic feature resulted in more than 100,000 retired workers getting more than they did working for the government...
...As an undisputed hardliner, Reagan could have taken on NATO in a way liberals would never dare...
...On the other hand, there's a perhaps more compelling reason why Reagan might not like it (and why liberals should...
Vol. 16 • July 1984 • No. 6
