Newt Gingrich: Instrumental in Reagans Supply Side Revolution? Yes He Was.

This article came out a month ago, but if I missed it, others did also. A few weeks ago, there was a lot of discussion about Gingrich’s negative roll in Reagan’s supply-side revolution. Here is some history:

Newt Gingrich

Forbes by Brian Domitorvic, author of Econoclasts.  Read the lead in to the following here.

…by the summer of 1981, the supply-side revolution was no sure thing.

In his first months in office, in early 1981, Reagan actually dithered on moving on his tax cut. He conceded to watering down Kemp-Roth, and he actually had to be convinced by Democrats that the top rate of the income tax had to be taken down all at once, instead of in phases.

Smelling blood, in spring of that year Democrats started to offer alternatives to Reagan’s tax cut, in the form of smaller, more “reasonable” tax cuts. Crucially, these did not index the tax code against inflation, as the Reagan bill would soon propose and has been a beloved staple in the tax code since indexing came into effect in 1985.

In stepped – Newt Gingrich. Gingrich, a second-term Representative, led an “Economic Recovery Working Group” in the House whose purpose was to show “what each member can do to help the Reagan tax cut” against its Democratic alternatives.

The group gave daily briefings and issued strategy memos on how to get the job done in the House. “Emphasize that the Reagan program is a real tax cut; and that the O’Neill/Rostenkowski program will mean a real tax increase for most Americans by 1984” was the gist of one memo.

This particular point is the one Reagan would seize on in the famous chart (designed by Entin) that he presented to the American people in a televised address in late July, which closed the deal in Congress…

The supply-side revolution was something different. It had real follow-through in the political process, let alone the economy. It is the furthest thing from idle to speculate that had people like Newt Gingrich not acted in 1981, we would have had the alternative tax cut that would have been unrecognizable from any of Jimmy Carter’s tax shavings of the 1970s. The 1980s would have followed up the 1970s as a uniquely problematic decade in our economic history…

N.B., a memo Newt Gingrich wrote pressing the strategy for passing the Reagan tax cut, July 1981 (Ronald Reagan Library): http://www.shsu.edu/~bfd001/EconoclastsSite/Images/Pages/Documents.html#6

The memo may be difficult to read on some monitors. Here’s the text:

To: Republican Conference
From: Newt Gingrich, Economic Recovery Working Group
Date: July 16, 1981

What Each Member Can Do to Help the Reagan Tax Cut

Here are three things you can do to help yourself by helping the Reagan Economic Recovery Tax Cut.

1. Call a news conference while you are back home to support the Reagan Economic Recovery Tax Cut.

2. Talk personally to the representatives of one or two groups whom you know personally. Tell them we need their support on the tax cut now. Ask them to educate people in their groups on the tax cut and ask those people to call or write their Congressman.

Tell me on the floor who you’ve talked to, or leave word with John Palafoutas at 5-4501.

3. Be visible and vocal on the floor. Do at least two one minutes or special orders in support of the Reagan Economic Recovery Tax Cut.

If you can do more, attend our daily PR planning meeting and briefing:

Every Day
Half Hur before the session
H-219 whip Office

For further information, call John Palfoutas, at 5-4501

End Gingrich Letter

Unbelievable that Gingrich could not/did not defend himself better against the claims of his opposition to Reagan and the tax cuts.

Thanks to Kim Jossfolk on Facebook and Red State.

Posted by Maggie @ Maggie’s Notebook