Politics

Ronald Reagan’s budget director, David Stockman, spoke candidly years ago about why Republicans like tax cuts so much. In his 1986 book, The Triumph of Politics: Why the Reagan Revolution Failed, he confided that tax cuts served the purpose of creating budget deficits that could then be used to justify spending cuts on government programs.

Typically, administrations had only cut spending for a program if it was no longer necessary, and the resultant surplus would then be used as a tax cut to stimulate the economy. However, Stockman turned this on its head by using the tax cuts to create a budgetary crisis that would then require cuts in spending regardless of whether the programs were necessary or not.

In other words, Stockman used tax cuts to create a revenue problem that the Reagan administration could then mask as a spending problem. This is known as “starving the beast.” The administration starves the beast—important government services—of important tax revenues in order to then justify slashing government spending.

Stockman himself admitted the failure of this strategy, since budget deficits during the Reagan administration did not bring down public spending in a meaningful way. This failure, however, didn’t stop the next generation of conservatives from making it a key part of their larger political project. In 2001 and 2003, for instance, George W. Bush pushed through massive tax cuts meant to impose a “fiscal straitjacket” on Congress. This then prompted Bush’s Deficit Reduction Act of 2005 to gut government programs.

There is nothing new under the sun.