jan 1, 1981 - Reagan cuts budget of regulatory agencis

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Advocates of Reaganomics asserted that excessive regulation by federal agencies impeded economic growth. Deregulation of prices in the trucking, airline, and railroad industries had begun under President Carter in the late 1970s, on the theory, since proven correct, that the public would reap results in lower transportation costs. But Reagan expanded the mandate to include cutting back on government protections of consumers, workers, and the environment — cuts whose benefits to the public were less clear. Some of the targeted federal bureaucracies, such as the U.S. Department of Labor, had risen to prominence during the New Deal; others, such as the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA), had been created during the Johnson and Nixon administrations. Although these agencies provided many services to business corporations, they also increased their costs — by protecting the rights of workers, mandating safety improvements in factories, and requiring expensive equipment to comply with environmental standards. In 1981, the Reagan administration cut the budgets of these and other federal regulatory agencies by an average of 12 percent.

An editorial cartoon published in the Washington Post in 1982 depicting James Watt, secretary of interior during the Reagan administration, driving a steam shovel through the wilderness. According to the cartoonist, destroying nature is Watt’s idea of a “Wilderness Protection Bill.” Reagan appointees like Watt pursued “deregulation,” the reduction or weakening of regulatory rules put in place in earlier decades to protect the environment, workplace safety, and consumers.

Reagan also weakened regulatory agencies by staffing them with leaders who were inherently opposed to the agencies’ missions. James Watt, an outspoken conservative who headed the Department of the Interior, attacked environmentalism as “a left-wing cult.” Acting on free-enterprise principles, Watt opened public lands for use by private businesses — oil and coal corporations, large-scale ranchers, and timber companies. Anne Gorsuch Burford, whom Reagan appointed to head the EPA, likewise disparaged environmentalists and refused to cooperate with Congress to clean up toxic waste sites around the country. The Sierra Club and other environmental groups worked to raise enough public outrage about these appointees that the administration changed its position. Both Watt and Burford left their posts before the end of Reagan’s first term, and in the president’s second term he significantly increased the EPA’s budget and added acreage to the National Wilderness Preservation System and animals and plants to the endangered species lists — a significant turnaround from his early years in office.


Politics is sometimes called “the art of the possible,” and Reagan understood the limits of what he could accomplish — and what he could not. Having attained two big goals — a major tax cut and a dramatic increase in defense spending — Reagan tempered his rollback of government regulation and the welfare state. When he left office in 1989, federal spending stood at 22.1 percent of the gross domestic product (GDP) and federal taxes at 19 percent of GDP, both virtually the same as in 1981, the first year of his presidency. In the meantime, in addition to the tripling of the federal debt, the number of government workers had increased from 2.9 to 3.1 million. The president’s rhetoric about balancing budgets and downsizing government looked empty — which elicited harsh criticism from some right-wing commentators. “There was no Reagan Revolution,” one conservative stated flatly. A former Reagan aide offered a more sympathetic assessment: “Ronald Reagan did far less than he had hoped … and a hell of a lot more than people thought he would.”

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