In the late 1970s 1978 or 79, Republican Senator Bill Roth who was on the Senate Finance Committee and Republican Representative Jack Kemp, over in the House, together introduced the Kemp-Roth bill in the House and Senate. Which was deep tax cuts across the board. Supply side tax cuts, meaning there weren’t budget cuts to pay for them. Neither Member of Congress was the Chairman, or Ranking Member of their committees. They were also Conservative Republicans serving in a Democratic Congress with a Democratic President. So they both knew that their legislation wouldn’t pass at least in that Congress.
Kemp-Roth was about the 1980 general election. Hoping of course Ronald Reagan is elected President and that Republicans pick up a lot of seats in Congress and even take over the House, or Senate, or both. Congressional Republicans picked up a bunch of seats in the 1978 mid-term elections, especially in the House. But they had a long way to go going and Democrats kept control of Congress for 1979-81. But Kemp-Roth help set the stage for the 1980 general elections with high taxes becoming unpopular across the country. With a very weak economy with high unemployment, the recession of 1979-80 and everything else. And Ron Reagan knew this and made Kemp-Roth part of his 1980 presidential campaign.
Ron Reagan becomes President of the United States in a landslide in 1980, Senate Republicans take control of the Senate pick up thirty seats in the House. President Reagan is pretty popular from the beginning, the assassination attempt in 1981 actually helped in a sense. Because his approval rating went up. Senate Republicans had the votes in the Senate, the question was whether they can pass Kemp-Roth in the Democratic House. Which was controlled by Speaker Tip O’Neil who was a very Progressive Democrat to put it mildly. And didn’t believe in tax cuts.
But with President Reagan’s popularity, House Minority Leader Bob Michael along with President Reagan, were able to find enough Conservative Democrats in the South to go along with all the House Republicans and Speaker O’Neil made the mistake of allowing for a vote on Kemp-Roth. Because he believed he had the votes to defeat the bill along with I believe House Leader Jim Wright. The President’s approval rating was so high, those Southern Democrats all wanted to get reelected and Kemp-Roth passed in 1981. But the economy didn’t improve right away, actually there was another recession in 1982 that was even deeper.
But in 1982 with yet another deep recession and the debt and deficit skyrocketing and with the budget cuts that the President promised that never came around at least early in his presidency. President Reagan, House Speaker Tip O’Neil and Senate Leader Howard Baker and I believe Senate Minority Leader Bob Byrd worked together and agreed to raise taxes I believe across the board. And actually President Reagan also the President of Supply Side Economics, raised taxes ten times and increased the size of the Federal Government during his Presidency. And left office in 1989 with a record Federal debt and deficit. President Reagan became President as an ideologue, but left office as a pragmatist.