Good insight from Edwin Meese III and Michael Needham about why Washington can’t be trusted – especially when it comes to tax hikes and spending cuts.  One thing we know for certain is that raising taxes would hurt the economy and strangle already anemic job creation.  Mr. Meese also points out that Washington can’t be trusted to follow through on reining in wasteful spending which is why we need a Balanced Budget Amendment with taxpayer protection – it is only long-term solution that will force Washington to live within its means.   

Will Obama ever learn economics from Reagan?

By Edwin Meese III and Michael Needham

USA Today

July 22, 2011

The centennial of Ronald Reagan’s birth earlier this year brought an unusual sight: a round of press reports noting President Obama’s admiration for his predecessor, including one he penned for this newspaper.

Despite their stark differences on policy, Obama praised Reagan for how he led the nation “through an extremely difficult period, with economic hardship at home and very real threats beyond our borders.” And, lo and behold, many pundits are now comparing what they call Reagan’s willingness to compromise on taxes to what they say is the intransigence of today’s GOP.

In addition to its own editorials, USA TODAY publishes a variety of opinions from outside writers. On political and policy matters, we publish opinions from across the political spectrum.

Roughly half of our columns come from our Board of Contributors, a group whose interests range from education to religion to sports to the economy. Their charge is to chronicle American culture by telling the stories, large and small, that collectively make us what we are.

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Leading the nation through hard times wasn’t easy. We’d like to suggest that President Obama take a closer look at how President Reagan dealt with that “economic hardship,” and how he steered the nation toward what would turn into its longest peacetime economic expansion. It’s a cautionary tale — one that involves the greatest domestic error of his administration.

In 1981, President Reagan’s plan for revitalizing the economy was a four-fold one:

1) Reduce tax rates across the board.

2) Decrease unnecessary regulations.

3) Work with the Federal Reserve to maintain stable monetary policy.

4) Slow the growth of federal spending.

President Reagan got his tax-rate cuts through Congress later that year. But because they were being phased in gradually, the economic pain they were designed to alleviate lingered well into 1982. High deficits persisted, and he faced enormous pressure to raise taxes.

The president had no interest in increasing taxes, but he agreed to consider some kind of compromise with Congress. His representatives began meeting with members of House Speaker Tip O’Neill’s team to find some way to hammer out a deficit-reduction pact. So began what, in our opinion, became the “Debacle of 1982.”

From the outset, the basic idea of the GOP participants was to trade some kind of concessions on the tax front for a Democratic agreement on spending cutbacks. The negotiators knew that Ronald Reagan would be hard to sell on any tax hikes. So they included a ploy they felt might overcome his resistance: a large reduction in federal spending in return for a modest rise in business (but not individual) taxes.

The ratio in the final deal — the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) — was $3 in spending cuts for every $1 in tax increases. It sounded persuasive at the time. Believing it to be the only way to get spending under control, most of the president’s colleagues signed on. He disliked the tax hikes, of course, but he agreed to it as well.

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Today, I signed the ‘Cut, Cap and Balance’ Pledge to oppose raising the debt ceiling unless there are binding conditions that reduce the deficit, cap spending and balance the budget. It’s time to put an end to the wasteful and reckless spending in Washington, DC.

Click Here to view the Pledge