Myth: Democrats in Congress created the deficit.

Fact: Republicans controlled the Senate from 1981 to 1987, and the White House from 1981 to 1993.


The Republicans controlled the Senate from 1981 through 1987, a period when the largest budget deficits of the 80s were passed. With Reagan in the White House, the GOP controlled two of the three bodies required to pass a budget.


Many Republicans argue that Reagan's tax cuts did not cause the mushrooming deficits of the 1980s -- it was runaway government spending. And because Democrats controlled Congress for 40 years, they are to blame for overcharging the public's credit card.

This argument forgets one inconvenient fact: Republicans were in control of the Senate from January 1981 to January 1987. It's true that presidents must submit their budgets first to the House, and that House Democrats declared seven of Reagan's eight budgets "DOA" -- Dead on Arrival -- but the fact remains that the Senate is an equal player in the budget process. Both houses of Congress have committees for appropriations and aggregate spending. Both houses of Congress vote twice on the budget: once on the original version, and again after the conference committee hammers out a compromise version of the two competing bills.

With Reagan wielding the veto pen in the White House, any budget standoff between House Democrats and Senate Republicans would have been tipped in the Republicans' favor. In other words, the GOP controlled two of the three bodies required to pass a budget. Therefore, Republicans dominated the budget process, and they deserve a larger share of responsibility for whatever deficits were passed on their watch.

It should also be pointed out that Republicans passed the largest deficits of the 80s; when Democrats regained control of the Senate in 1987, they reduced the deficits in 88 and 89, as the following chart shows:

Federal Deficit (Nominal dollars, in millions)(1) 

Year   Deficit
1979   -$40,183
1980    -73,835
1981    -78,976 < Republicans win Senate
1982   -127,989
1983   -207,818
1984   -185,388
1985   -212,334
1986   -221,245
1987   -149,769 < Democrats retake Senate
1988   -155,187
1989   -152,481
1990   -221,384
1991   -269,521
1992   -290,403

The smaller deficits of 1987-89 were the result of falling spending. Part of these were defense cuts in the Gorbachev era and the waning of the Cold War. Part of them were cuts in social spending, because this was the peak of the business cycle and there is less need for welfare and social spending when unemployment is low. The 1986 Tax Reform Act cut tax rates but also closed loopholes, actions which canceled each other out. So these smaller deficits were not the result of tax cuts, but Democratic-controlled spending!

Finally, Reagan could have vetoed any budget he deemed unacceptable. He did not.

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1. U.S. Office of Management and Budget, Historical Tables, annual.