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What Reagan Has Done to America

Two years into his presidency, federal regulations go unenforced, poor and middle-class incomes have decreased and social services were slashed

President Reagan, Senator Ted Stevens, Secretary of Treasury, Donald Regan, James Baker, chief of staff, Cabinet Room, White House

(L-R) President Reagan, Sen. Ted Stevens, Secretary of Treasury Donald Regan, and James Baker, chief of staff, in the Cabinet Room of the White House in Washington DC on November 6th, 1981,

Frank Johnston/The Washington Post via Getty

Amid the accumulated wreckage of 1982, it is hard to remember now what a warm and sunny vision Ronald Reagan offered us originally. So many ugly conflicts have been spawned by his presidency, so much real damage to American life and spirit, that it takes a willful memory to recall that Reagan once evoked ennobling sentiments, intended to unite us all.

He was at his best in 1980, at the Republican national convention, proposing a “special kind of compact” between the leaders and the people. “Together, let us make this a new beginning,” he declared in his acceptance speech. “Let us make a commitment to care for the needy, to teach our children the values handed down to us by our families, to have the courage to defend those values and virtues and the willingness to sacrifice for them. Let us pledge to restore, in our time, the American spirit of voluntary service, of co-operation, of private and community initiative, a spirit that flows like a deep and mighty river through the history of our nation.”

Those words mock us today, two years later, now that we know exactly what he meant. But initially, the spirit of history Reagan invoked was real enough, and millions of Americans found the collective sentiments of Reaganism alluring. Even those who thought his policies were impossibly wrong conceded that he was touching something deep and positive in the nation’s soul.

Reagan meant to lead us back to an earlier, happier time, when life was simpler and the government was less intrusive. The nostalgic focus was on the Fifties. Reagan hung a picture of Eisenhower on his office wall and proposed to restore the orthodox “social contract” challenged in the Sixties and Seventies by civil rights, feminism, environmental activism and opposition to the war in Vietnam. In fact, Reagan longed for the Cold War and everything that went with it. Many did not take him seriously at first, but once in power, Reagan pursued his vision with a vengeance only partially concealed by his amiable personality.

The vague sentiments of Reaganism translated into brutal policies that required putting certain groups back in their place. Blacks recognized this right away, and most women did soon enough. Ordinary white male working stiffs took a bit longer to see that they were targets, too. Reaganism’s attack on big government sounded reasonable, even desirable, in the abstract, but its practical application had dreadful consequences: it revived class warfare in American politics. Rich versus poor. Business versus labor and consumers. Powerful interests versus the weak and unprotected. Old arguments about equity and intolerance, which many thought history had settled, were suddenly before us again.

Under the slogan “regulatory reform,” Reaganism gutted the government’s enforcement powers against predatory private interests that do damage to health, safety and the environment. His supply-side economics redistributed income upward, increasing the share of the top fifth of American families at the expense of every other income class. In the struggle for a new Cold War, Reaganism revived not the unity of national purpose but the public’s deepest fears about the government’s capacity to destroy us all.

Step back for a long look, and it becomes clear that already, Reaganism has done great damage, and the healing will take many years.

The Reagan administration’s true approach to law enforcement was accurately summarized by Vice President George Bush in a speech to businessmen last June. “I think we’ve started to see this philosophical shift, the end or the beginning of the end of this adversary relationship,” said Bush. “Government shouldn’t be an adversary. It ought to be a partner.”

His audience was the International Federation of Pharmaceutical Manufacturers Associations, and they understood what the vice-president meant. Since Reagan took office, the law-enforcement actions taken by the Food and Drug Administration have dropped by sixty-five percent. The FDA, once regarded as one of the toughest regulatory agencies, has simply stopped policing faulty drugs, adulterated foods and false labeling with its old vigor. During the Carter administration, the FDA averaged 530 enforcement actions every six months. In the first six months of 1982, by contrast, the FDA took only 178 actions against products whose safety and effectiveness the agency is supposed to guarantee. In the past, the FDA would take about 260 products off the shelf in a six-month period; in the first half of this year, it seized only ninety-four.

The “partnership” that Bush and other apostles of regulatory reform are fond of promoting actually adds up to rampant lawlessness. The FDA’s performance has been typical of Reagan’s regulatory agencies. Virtually all of them have gutted their inspection and enforcement programs through budget cuts and deliberate slowdowns. They would like us to believe that a miraculous transformation occurred right after Ronald Reagan’s inauguration — i.e., that businesses in virtually every sector suddenly became more virtuous, that they voluntarily began to obey the federal laws they used to violate. If you don’t believe this, then you are forced to the opposite conclusion: the administration is allowing white-collar crime to flourish on an astounding scale.

Meanwhile, in the interest of government efficiency, Reagan recruited a squad of foxes to check out the chicken coop and recommend improvements. A task force of business executives, headed by J. Peter Grace, is currently poring over the entire bureaucracy to advise on ways to reduce costs. This is a sample of their thinking: the group assessing the Environmental Protection Agency suggested that it adopt a monitoring system on water pollution that would only check out “exceptions” reported by companies. This would eliminate several hundred inspectors’ jobs. It would also virtually eliminate the EPA’s presence in the field, according to enforcement veterans. The cochairmen of the EPA advisory group are not exactly disinterested environmentalists. They are executives of Diamond Shamrock, an oil and chemical company, and the Texas Commerce Bank.

In 1980, the EPA referred more than 250 cases’ of civil and criminal violations to the Justice Department. Reagan’s EPA administrator, Anne Gorsuch, has cut that figure in half. In fiscal year 1982, which ended October 1st, the EPA filed only twenty water-pollution cases, compared with ninety in 1979. And it referred only thirty air-pollution violations, compared with 144 three years earlier.

In the Labor Department, which union officials now call “the Department of Management,” the Occupational Safety and Health Administration cut safety inspections of workplaces by twenty-five percent this year. But the really drastic gutting has been on enforcement and penalties: the issuance of willful citations, which carry fines up to $10,000, is down eighty-nine percent, while the total amount of penalties levied against employers is down seventy percent. In the last year of the Carter administration, OSHA averaged $2,049,000 in penalties every month. Under Thorne Auchter, the Florida building contractor Reagan appointed to head the agency, penalties averaged $612,000 a month in 1982.

Osha’s concept of “partnership” simply eliminates safety inspections in some industrial sectors on the ground that those industries have good safety records compared to others. The Big Three auto companies are exempt, and so is most of the chemical industry (unless, of course, someone files a complaint — or is killed). Auchter’s so-called “targeting” program further cuts the number of actual inspections of plants and factories; the inspector merely looks at the safety records in the front office and goes home if the lost-day statistics seem okay.

At the Mine Safety and Health Administration the story is similar. In 1980, MSHA inspectors imposed $19.5 million in fines for violations in 1981, more lenit it enforcement saved coal-mine operators $5.3 million. The death rate from mine accidents, meanwhile, increased sharply.

At the Federal Trade Commission, which pursues consumer complaints and antitrust cases, enforcement has dropped dramatically under the new Republican chairman, James Miller. In fiscal year 1982, Miller’s first full year in control, the FTC took only fifteen new enforcement actions against unfair, deceptive or anticompetitive business practices, compared with sixty-eight cases in 1980. Miller’s main activity has been a broad campaign to weaken the FTC by surrendering its power to decide such issues as truth in packaging and honesty in advertising. His proposal to close all ten of the FTC’s regional offices, which are important conduits for consumer complaints, has been sidetracked by Congress so far, but he’s still trying.

At the Department of Agriculture, where the new regulators formed a “partnership” with the meat industry, an internal audit found gross deficiencies in meat and poultry inspections. In one of five plants reviewed, “adulterated product” was ready for shipment. Cutting boards were dirty with old residue. In half the plants visited on one inspection tour, controls on pesticide contamination were not properly followed. Agriculture’s response has been to propose a new approach that would cut inspections drastically, taking only random samples of food products instead of looking at everything.

At the Justice Department, the Reagan regulators reversed or weakened the federal commitment to protect rights won by women, blacks and other groups over the last two decades. With the president’s personal concurrence, Justice decided to switch sides in the long battle over segregated private schools that claim income-tax exemptions. Justice decided not to appeal a lower court decision that, if allowed to stand, would effectively enfeeble Title IX, the government’s enforcement against sex discrimination in federally funded educational programs.

At the Department of Health and Human Services, Secretary Richard Schweiker proposed dropping the annual health-and-safety inspection of nursing homes, as well as the follow-up visits within ninety days for nursing homes where hazards were found. Despite congressional opposition to the weaker enforcement, department administrators have already accomplished their purpose by exempting large categories of nursing homes from yearly visits.

The Reagan administration, naturally, denies that any of these statistics mean what they seem to mean about rampant lawlessness. They claim variously that the budget cuts have made law enforcement more efficient, or that only unnecessary “harassment” has been eliminated, or that industry really has improved its behavior voluntarily, now that it is being watched by sympathetic watchdogs.

Don’t believe it. In one episode after another, the Reagan regulators have been caught dispensing with legal requirements or winking at violations. When challenged, their first reaction is usually puzzlement. What’s all the fuss about? Didn’t Americans vote for regulatory reform back in 1980? When pressed by lawsuits or congressional challenges, however, they have usually had to retreat because their forgiving approach to business violators is patently illegal.

At the EPA, for instance, Anne Gorsuch had a friendly meeting with executives of Thriftway Company, a refiner in New Mexico, who complained that their gasoline would not be in compliance with the new lead-content standards. The company wanted a temporary waiver, but Gorsuch told them that might prompt a flood of waiver requests from others. Not to worry. According to the EPA inspector general’s investigation, Gorsuch promised she would not enforce the law. Why? Because she intended to abolish the lead standard anyway.

Even the Thriftway representatives were taken aback by her generosity. One of them, William F. Cockrell Jr.,wrote a memo for his files: “Gorsuch then stated that the administrator of EPA was telling us that EPA would not enforce the lead phasedown regulations against Thriftway. I was surprised at this statement. I remarked that that was certainly important. Gorsuch then commented that Thriftway was well represented on this matter and complimented [Peter] Domenici’s and [Jack] Schmitt’s efforts.” Those were New Mexico’s two Republican senators, one of whom — Schmitt — was defeated in November by a pro-environment opponent.

Another Thriftway representative, Edward S. Shipper Jr., was still worried about how the company should fill out the required reports on lead content, which would make it clear that Thriftway was still in violation. What if a field inspector noticed the report? In a telephone conversation, Richard Wilson, an EPA director of enforcement, reassured the executive. According to Shipper, “[Wilson] told me that he was in a delicate position by virtue of his title at EPA. Thus, he couldn’t explicitly state we should violate the law…. He also said that he thought it highly unlikely that any field investigator or the like would feel compelled to urge that an enforcement action be instigated against a small refiner like Thriftway…. He also said that this wouldn’t be the first incident which had not been prosecuted.”

Gorsuch later claimed she did not advise Thriftway to break the law, but six witnesses agreed that she assured the company “that they had her word on nonenforcement.” But the EPA couldn’t keep her word about weakening the standard. The scientific evidence on the harmful effects of leaded gas is not in dispute. When Gorsuch did try to rescind the lead standard, she ran into a storm of public controversy and had to retreat.

There have been other instances where EPA executives forgot which side they were supposed to represent. When the government was trying to get the Inmont Corporation to clean up a California chemical dump, an official in Gorsuch’s office called the company and revealed the government’s “bottom line” — the minimum number of dollars in cleanup costs the government would accept — thus undermining the negotiations. In Corpus Christi, Texas, where Coastal States, a petrochemical producer, was accused of dumping hazardous wastes in the Gulf of Mexico, the company got a little help from an EPA enforcement counsel who confided to its executives that he thought the government’s case was without merit. Justice Department lawyers were furious when Coastal States offered this as testimony for the defense.

Occasionally, the White House participates directly in the new “partnerships.” Chief of staff James A. Baker got a frantic call from his brother-in-law, a Texas farmer who grows 1500 acres of rice, pleading for help with the EPA. He needed an “emergency use” exemption so he could use an unregistered pesticide on his crop. Baker had an aide call top EPA officials, and an exemption for Texas farmers was granted a month later. Perhaps this pressure wasn’t necessary, since the EPA has been generous on the question of dangerous pesticides. Under Gorsuch, the emergency exemptions for pesticides have more than doubled from 1978 levels.

In some cases, the new aura of leniency has led directly to tragedy. Last April, despite previous objections, the FDA approved a new wonder drug for arthritis, Oraflex, produced by Eli Lilly & Company and already marketed by a Lilly subsidiary in Great Britain. Oraflex had been turned down two years earlier and an FDA investigator had called for prosecution in 1981, accusing Lilly of withholding evidence of side effects. But this time, the FDA gave the green light. The company sent out 6000 press kits trumpeting the virtues of Oraflex, and sales took off — just as British doctors were reporting dozens of deaths from liver or kidney damage and thousands of adverse reactions. The drug was withdrawn in August, but not before about twenty Americans had died from complications thought to be linked to Oraflex. Lilly denies any illegal behavior, but the Public Citizen’s Health Research Group is demanding criminal prosecution, charging that the company withheld evidence of the drug’s side effects, which were known to its British subsidiary. Dr. Sidney M. Wolfe, the health group’s director, does not really expect any prosecution until there is a change of administrations.

In other areas, the evidence linking lax enforcement with deaths and injuries is less direct but, in the long run, probably more serious. Osha, for instance, is attempting a systematic rollback of health standards that protect workers against dangerous substances by trying to undo legislation regarding cotton dust and lead that’s already been upheld by the Supreme Court. Not to mention rules covering cancer-causing chemicals, hearing loss and employees’ access to company medical records.

Osha has turned aside pleas to stiffen its standards on formaldehyde exposure, de-spite alarming evidence linking it to cancer (and despite the ban on formaldehyde insulation adopted by the Consumer Product Safety Commission to protect homeowners). Formaldehyde is one of those substances that turn up in many industrial processes, from foundries and furniture-making to textile mills. Unless something is done, formaldehyde will probably be the asbestos of the 1990s — a known killer that could have been eliminated. “You shouldn’t have to wait for a body count in humans to take action,” said Peggy Seminario, who monitors Osha for the AFL-CIO. “We are talking about thousands of excess cancer deaths because of this.”

No one has been able to measure the full injury Americans have absorbed from the economic policies of Reaganism, but we know that it is larger than even the statistics indicate. What happens to people when they are out of work for many months, even years, or when their personal security is threatened by distant political action they cannot control? Two labor economists, Morton O. Schapiro and Dennis A. Ahlburg, have calculated that each increase of one percent in the unemployment rate produces 318 suicides among American men. As unemployment rose from six to ten percent, they found male suicides in the U.S. increased by 1272.

Even that horrible statistic doesn’t quite convey the full pain. The last two years have delivered a stern message to many Americans who thought they were middle-class, who believed (as Americans always have) that life for them would get better and that their children could expect an even brighter future. Job layoffs in the wake of recession, combined with the blatant class politics of Reagan’s budget and tax cuts, wiped out those expectations for millions. Middle-income working people who thought their modest prosperity was secure are now unsure. Those on the bottom struggling upward have seen the opportunities closing above them. If hundreds of thousands of industrial workers are permanently out of their high-wage jobs, that disappointment seeps down to all the workers below them.

Especially to the younger ones, it seems. Ahlburg and Schapiro found that increased suicides linked to unemployment have fallen most heavily on the fifteen- to thirty-four-year-old age group. These are the children of upwardly mobile fathers — men who came from World War II and enjoyed a booming economy with plenty of good jobs. As young adults, they have begun to perceive that they cannot emulate their fathers’ success. “The combination of the frustration of decreased wages and high expectation causes suicide,” Schapiro concluded.

Reaganism promised great expectations, of course. The across-the-board tax cuts were supposed to liberate every income class from excessive taxation; the new money in private hands would stimulate a boom in industrial investment, meaning greater productivity and more jobs. In the rhetoric of Reaganism, everyone would win, even the poor.

Reagan’s rhetoric has been a lie from the start. His budget reductions and lopsided tax cuts have taken money away from the bottom rung of our society and given it to the top. According to the Congressional Budget Office, a family whose income is under $10,000 lost $140 in 1982, while a family making over $80,000 gained $8320. By 1985, if Congress doesn’t intervene to change Reaganomics, the family at the bottom will have lost $450 (which doesn’t sound like much unless you are poor), while the family at the top will have picked up a grand total of $64,680. That’s real money, even for rich folks.

Reagan and his people are unembarrassed by these facts. This is how they believe things should work in a free society. White House counselor Edwin Meese has said, “The progressive income tax is immoral.”

Two overlapping groups of citizens — women and the working poor — suffered more than others from this redistribution of income. Despite Reagan’s preachments against welfare, his attacks on social programs have actually penalized those poor people who are working, who earn low wages at grubby jobs and receive some supplemental aid from the government. The Congressional Budget Office estimates that nonworking poor families lost about ten percent of their federal benefits from the Reagan budget cuts, while families who have some job income lost thirty to forty percent. This perverse effect may actually be forcing people back on welfare.

Women suffer disproportionately because women are disproportionately represented at the bottom of the economic ladder. There is a large population of single women who support a family in a household with no other wage earner. When food stamps are cut by $1.5 billion over the next three years, women will lose most because sixty-nine percent of families on food stamps are headed by women. Medicaid is being cut by $1 billion over the next three years, and sixty-one percent of Medicaid recipients are poor women. The same pattern shows up in program after program; day-care centers, legal services, school lunches, housing subsidies, welfare, family planning. This targeting helps explain why women opposed Reaganism and Republican candidates by lopsided percentages at the polls. But what about the middle class? Didn’t the middle class benefit from the Reagan tax cuts? The original political strategy behind the three-year tax cuts assumed that while Democrats were bleeding over the poor, the Republicans would steal away the loyalties of the middle-income voters — by whom elections are decided — by putting real money in their pockets. A family earning between $20,000 and $40,000, for instance, would gain a net total of $4050 over the next four years. That’s peanuts compared to the $64,000 families at the top will collect, but it’s better than a kick in the teeth.

Yet even the middle class lost in Reagan’s redistribution of income. Inflation and social-security increases wiped out most of the taxcut bonus (which was about $380 for middle-class families in 1982), and rising unemployment dampened any sense of celebration. If American families are divided into five income groups, only the top group (those families earning $40,000 or more) gained a larger share of the national income. Every other group — that is, eighty percent of U.S. households — lost some of its income share. The precise effects of these inequities were calculated by Joel Havemann, deputy editor of the National Journal. The figures look like this:

Average Family Income Share of National Income before Reagan  Share of Income after Reagan
 $39,200  42.5%  43.3%
 $22,680  25.2%  25.1%
 $15,370  17.2%  17.0%
 $9,450  10.8%  10.4%
 $3,760  4.4%  4.2%

The group that lost the most was the fourth quintile, the working poor. As percentages, these shifts in national income seem small, but translated into dollars, they are enormous. Each one-tenth of a percent represents about $1.6 billion in income, so Reagan’s redistribution increased the top rung’s annual share by $12 billion while taking away $1.6 billion to $6.4 billion from each of the four other rungs. But Reagan engineered other great shifts of wealth that, in the long run, will probably be even more costly to average families. The largest and most scandalous are the across-the-board benefits the Reagan administration delivered to the oil industry — which, as everyone knows, was hardly strapped for cash in the first place.

Reagan’s gifts to oil came in many parts. Newly inaugurated, Reagan speeded up the decontrol of oil prices by ten months, a move worth an estimated $10 billion to the industry. Of all the business beneficiaries, the 1981 tax legislation made oil the biggest winner — about $15 billion over the next three years — though Congress reclaimed approximately half of that in the 1982 tax bill.

Interior Secretary James Watt helped out with his offer to lease offshore oil tracts over the next five years — 1 billion acres of government-owned oil and gas fields. Flooding the market with available leases, as Watt is doing, has the effect of depressing bids for drilling rights. The Sierra Club estimates that this speed-up will ultimately cost the government $77 billion in lost revenue. The first sale of 125 offshore Alaskan tracts, for instance, drew top bids totaling $2 billion. When annual royalties are figured in, the government will be making less than $ 12 billion on public oil tracts whose potential market value is estimated at $75 billion.

As a final fillip, the Department of Energy, in keeping with the pattern of regulatory generosity, has cut its enforcement staff nearly in half and folded up hundreds of investigations aimed at recovering fraudulent overcharges reaped during the days of price controls. This probably adds several billion more to the boodle oil has collected under Reagan, and it is not what most Americans had in mind when they voted for the man in 1980.

Strangely enough, the unraveling of Reaganism will begin on the front the president probably thought was most secure. His new cold-war policy has had three essential thrusts: a massive defense buildup; a hard line against nuclear-arms limitations; and confrontation diplomacy with leftist guerrillas on the battlefields of Central America and elsewhere. Now he is in deep trouble in all three directions.

His defense secretary, Caspar Weinberger, merrily said yes to so many new weapons systems that the government cannot possibly pay for them all, even with a defense budget that rose from $136 billion in 1980 to $187 billion in 1982, and that will reach $279 billion by 1985. Even the hawks are becoming frightened by those costs and are beginning to mumble about moderation. In the 1983 session of Congress, the free ride for the Pentagon will be over. Some of the flakier weapons proposals, such as the MX missile, are sure to be killed.

Meanwhile, the Reagan administration is dangerously stuck in the quagmire of Central America, supporting a covert CIA war against Nicaragua, trying to get the military leaders of El Salvador to stop their murderous behavior and supplying increased military aid to the incipient civil war in Guatemala. These are ominous developments, reminiscent of the step-by-step engagement that led us into Vietnam.

But what saves us now is public opinion. Each time the news media focuses on the possibility of U.S. involvement in a new war, the public-opinion polls go crazy and alarm bells go off in politicians’ heads. Moreover, military leaders, still traumatized by Indochina, are most reluctant to commit their troops to another war American citizens do not support. That reality, more than anything else, restrains the impulse toward cold-war adventurism within the Reagan administration.

Finally, public fears and opposition, particularly as expressed in the nuclear-freeze movement, are a growing force confronting Reagan’s ambitions for a new generation of nuclear armaments. Rightwing critics tried to dismiss the freeze campaign as a fizzle or a commie plot, but despite heavy campaigning from administration hawks, the freeze resolution carried in California and seven other states. This public referendum on fear and distrust is utterly unprecedented in contemporary politics. While the freeze may have been overshadowed in the recent election by the economy and local issues, freeze proponents helped defeat dozens of congressional candidates who supported the arms race (eight of the “fifteen vulnerable hawks” listed in RS 380 were defeated). With twenty-six additional Democrats in the House, the freeze resolution is assured of majority support there.

But this movement is deeper and more serious than mere elections. The American bishops of the Catholic church are preparing a courageous and historic statement on the morality of nuclear arms that frames the hard questions in a way no one can evade. The debate is only just beginning, and if Reagan does not moderate his approach to arms control, he will find he is the target.

All in all, the next two years should be as stormy and fractious as the last two years have been. All of the political forces that contributed to Reagan’s landslide in 1980, from the New Right to the arms lobby, are still present and potent, though weaker than they were. Reagan and his appointees will continue their assaults for the next two years, but the failure of his programs is the inescapable message of the 1982 elections. Two years of Reaganism produced potent counterforces in American politics, from revitalized labor unions to the nuclear-freeze movement, and their protests registered in congressional races from Alabama to northern California. For the first time in twenty years, the voter turnout for an off-year election actually increased. Every analyst agrees that the increase was attributable to the injured classes — blacks, labor and other groups — all of whom turned out to vote against Reaganism.

Most politicians of both parties understand this well enough. They are now scurrying to get some distance between themselves and the radical content of Reaganism (even Reagan declined to campaign this fall on the themes that got him elected). The mainstream Republicans recognize, even if the president’s hard-core supporters do not, that these counterforces will grow still stronger by 1984, as long as the assaults on them continue. At the White House, intense arguments are underway on which direction the president should plunge. Should he dig in and defend the faith, waging a veto war against all retrenchments? Or should he swerve toward the center and protect his public image as an amiable guy? My hunch is that Reagan will bend less on the big questions than many of his advisers and the Senate Republican leaders would like. This is Reagan’s last time around as a political leader, so why yield now?

These are poor choices for the man who meant to lead a revolution.

In This Article: Coverwall, Politics, Ronald Reagan

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