Transcript: Chapter 10

Reagan: I, Ronald Reagan, do solemnly swear that I will faithfully execute the office of the president of the United States.

Narrator: When Ronald Reagan took office in 1981 expectations were low. At a time when America faced an economic crisis and an escalating cold war, many wondered if anyone could manage the country. Least of all, a former Hollywood "B" actor.

"Things could go very badly in the first year," Reagan's staff had warned, "resulting in an erosion of [Republican] momentum and public confidence."

But Reagan projected great assurance. He believed, like Franklin Delano Roosevelt 50 years before him, that his mission was to restore America's trust in itself.

Reagan: It is time for us to realize that we are too great a nation to limit ourselves to small dreams. We're not, as some would have us believe, doomed to an inevitable decline. I do not believe in a fate that will fall on us no matter what we do. I do believe in a fate that will fall on us if we do nothing.

Smith: He and Franklin Roosevelt have so much in common. They're both great communicators, they're both buoyant optimists. They both came to Washington, in periods of great economic distress. But, there's a major, major difference, apart from one being a liberal, one being a conservative. FDR was a great improviser. He made up the New Deal, almost day by day. Reagan came to office with a very fixed set of beliefs and an agenda to try and implement those beliefs.

Will: Ronald Reagan had a few very simple precepts. Government was too big, taxed too much, and the Soviet Union was getting away with murder internationally. You guys work out the details.

Narrator: The key guys in the Reagan White House were Chief of Staff James Baker, who knew how Washington worked and Edwin Meese and Michael Deaver, who knew from Sacramento how Reagan worked. Deaver had another assignment: the first lady. To this "Troika," Reagan delegated unprecedented authority.

Anderson: In some ways he governed like a Turkish pasha. He assembled people around him, brought people in, talked to them, made it clear to them what he wanted to do, and then the attitude seemed to be, OK, now you know what I want to do, let's do it. And he just assumed that these things would be done.

Narrator: The future would expose the weakness of Reagan's propensity to delegate. But for most of his first term the troika served him well.

Senator Howard Baker, Majority Leader: The Carter administration had made a terrible mistake by sending up so much legislation in their first hundred days that the focus became very diffused. We didn't make that mistake. I said look our 100 day plan says we are to have three priorities and those three priorities are economic recovery, economic recovery, and economic recovery, and that's what we ought to focus on for the first 100 days and carry out our plan.

Narrator: It would come to be known as "the Reagan Revolution." On its surface it was simple. A tax cut, reductions in domestic spending, and a balanced budget. But Reagan also wanted a military buildup to confront the Soviet Union.

Stockman: I have to say that I am not one to shrink from a tough task. But I must also say -- and I think every Cabinet member here will agree with me -- that the goals that you gave us are extraordinarily difficult to reconcile.

Narrator: Budget Director David Stockman warned Reagan that without deep cuts, budget deficits could rise as high as one hundred billion dollars. But Reagan was convinced that his tax cut would stimulate productivity and ignite an economic boom. The government would then collect enough taxes to balance the budget. It was called supply side economics, and even prominent Republicans were skeptical.

Sen. Howard Baker: I came out of a meeting with the president, when he had described his economic program, which entailed pretty good sized tax cuts and, and I was asked by the gaggle of reporters outside the northwest entrance to the west wing of the Capitol what I thought of it, and I uttered the words that probably should go at the very top of the list of things I never should have said. I said, "Well, altogether it's a riverboat gamble." And it was.

Reagan: It's time to recognize that we've come to a turning point. We're threatened with an economic calamity of tremendous proportions, and the old business as usual treatment can't save us. Together we must chart a different course. On February 18, I will present in detail an economic program to Congress. It will propose budget cuts in virtually every department of government.

Narrator: The cuts fell most dramatically on programs designed to help the poor. "I'm trying to undo LBJ's Great Society," Reagan wrote in his diary. "It was his war on poverty that led us to (this) mess." Reagan also called for a 30 percent tax cut across the board. All taxpayers would benefit, but the wealthy would benefit the most. Speaker of the House Tip O'Neill vowed to fight. Reagan's program, he said "[soaked] the poor to subsidize the rich."

Tip O'Neill: He and I don't agree on his plan whatsoever. I believe in the plan of fairness. Very easy to put the question. The question is this: Do you make over 50,000 dollars or less than 50,000 dollars. If you make over 50,000 dollars then you are for the Republican plan because that's who it's geared for.

Reagan: Just here to meet with the leadership and talk about our problems.

Narrator: Reagan faced a formidable task. For his economic package to become law, he would need to convince 26 of O'Neill's Democrats to break rank. In the first one hundred days of his presidency, Reagan met with 467 legislators and phoned many more. Once he called 29 members of Congress in a single night.

James A. Baker III, Chief of Staff: He never once moaned about having to make a congressional call because President Reagan understood that we judge our presidents on the basis primarily of their success, in getting their programs through the legislative branch. We would give him a script for each of these congressional calls and he never, he never missed it. He was an extraordinarily hard worker.

Richard Darman, Presidential Aide: Most of America thought that he was someone who watched television and went to bed. He didn't. Every single night he would do a stack of work. He would almost obsessively go through every single bit of paper he would get. Indeed, the first lady early on complained that I was keeping him up too late at night, but the too late was 2:30 in the morning.

Narrator: In his effort to sell his program Reagan's best weapon was his power of persuasion.

Maureen Reagan: He had the ability to project out of himself, that's what actors do. They make you feel happy or sad. They make you laugh and cry. They make you feel all of the emotions. And so when you're in politics and you want to get a message across to people you have to be able to ... to go in front of yourself and to project out to those people.

Michael K. Deaver, Deputy Chief of Staff: All you wanted to do is fix the camera on his head and let him talk. You didn't need him to walk around the desk or sit on the corner and do all of those things that people have to do to make politicians interesting. He was able to speak in ways that the American people believed and in a language that they understood. He vocalized their frustrations and hopes and fears and gave them a vision.

Reagan: During recent months many of you have asked, what can you do to help make America strong again. I urge you again to contact your senators and congressmen. Tell them of your support for this bipartisan proposal. Tell them you believe this is an unequaled opportunity to help return America to prosperity and make government again the servant of the people.

James Baker: He would make a speech ah televised national address and say, call your congressman, call your Senator, help me out. Here's what I want to do. And boy, the calls would flood the, would flood the congressional switchboards. It was very, very effective.

Narrator: With every appeal, Reagan's conservative agenda gained momentum. By March two thirds of Americans favored the president's program --especially the tax cut.

"Sometimes I have to pinch myself to see if this is real," said Deaver. "So do I," Reagan replied with a smile.

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