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Reagan and George H.W. Bush Years: 1980–1992

1980 Election and the Reagan Presidency

Candidates, Platforms, and Outcome of the Election

Ronald Reagan defeated Jimmy Carter in the 1980 presidential election, ushering in a new era of American conservatism.

In the presidential election year of 1980, many Americans were eager for change. Under President Jimmy Carter, the United States had experienced soaring inflation, ballooning interest rates, and climbing unemployment. The country was experiencing a sense of unease, or "malaise" as Carter called it. Moreover, the president had been unable to resolve a significant diplomatic crisis. In November 1979 Iranian revolutionaries had taken 66 Americans hostage in the embassy in Tehran. As 1980 wore on, the hostages continued to be held, despite ongoing negotiations by President Carter's administration. Carter had also been challenged during the primaries by Senator Ted Kennedy, leaving the Democratic Party divided. By the end of his term, Carter was deeply unpopular and had become associated with the surging federal deficit and with liberal social and economic policies many Americans saw as a source of the country's woes.

Running against Carter was Ronald Reagan, a Republican and former Hollywood actor and governor of California. Reagan promoted fiscal conservatism, promising American voters that as president he would cut taxes, downsize the government, curtail social welfare programs, and increase military spending. As a politician, Reagan displayed self-confidence and folksy charm. He also embodied the New Right, a renewed form of American social conservatism that emerged in response to the counterculture of the 1960s. Social conservatism is a political philosophy committed to traditional values and social institutions like the Christian church and the nuclear family. The New Right cherished the values of self-reliance and independence. Its followers considered themselves profoundly pro-American and anticommunist. They favored free enterprise and small government and worried about the erosion of the nation's moral core. Some who embraced the New Right considered themselves libertarians. A libertarian is a conservative who strongly believes in freedom of speech and worship, as well as the right to own property. Libertarians feel the role of government should be limited to protecting the individual rights of the population. Another sector of the New Right was the Moral Majority, a coalition of evangelical Christian conservatives founded in 1979 by televangelist Jerry Falwell. The Moral Majority was a political organization focused on social issues. It lobbied for prayer in school and the curtailment of abortion, affirmative action, gay rights, women's rights, pornography, and the teaching of evolution in schools.

Despite his attempts during the campaign to portray Reagan as a coldhearted warmonger, Carter was a vulnerable candidate. Reagan's campaign slogan—"Are you better off than you were four years ago?"—questioned voters' confidence in the Democratic incumbent. On election day, the answer was clearly no. Reagan won the election by a landslide. He carried 44 states and 51 percent of the popular vote. With Reagan's election, a new era of political, economic, and social conservatism was ushered in.

1980 Electoral Map

Reagan captured 489 electoral votes to Carter's 49. In addition to losing the presidency in 1980, the Democrats lost control of the Senate for the first time in decades.


Ronald Reagan's economic policies, often referred to as Reaganomics, included tax cuts and fewer regulations on the economy.

In 1981 the Reagan administration introduced fiscal conservatism plans that came to be known as Reaganomics. Reaganomics was a set of economic policies built around a particular concept: tax cuts combined with reduced federal spending and deregulation of businesses would stimulate the nation's economy. Economic benefits would eventually flow or trickle downward from the wealthiest to those who were less well-off. The trickle-down theory reasons that tax cuts result in individuals and corporations having more money, which they then reinvest in businesses. Expanding businesses lead to job creation and the hiring of workers. Workers then pay income taxes to the federal government. By rolling back regulations on U.S. businesses, the government hoped to allow a free market to emerge. Free market describes an economic system in which prices of goods and services are determined by competition among businesses without government control. In a free market economy, government influence on prices is nonexistent or minimal. Under Reagan a number of government controls were removed from the oil and gas industries, as well as the banking industry. Although Reagan favored a free market economy, some government regulation of businesses remained in place and the economy was not purely free market. Even so, advocates for Reaganomics hoped their policies would give the economy a much-needed boost and result in increased revenues for the federal government.

In the Reagan administration's early years, federal income tax rates for individuals and corporations were slashed by 25 percent. These cuts provided taxpayer relief but the loss in income tax revenues increased the federal deficit. The deficit grew further when Reagan fulfilled a campaign promise to significantly increase defense spending. The administration cut $35 billion in government spending—mostly from social programs such as low-income housing, food stamps, school lunches, and health insurance for the poor. Despite significant economizing, Reagan could not balance the federal budget. By 1982 the nation was facing high unemployment and the worst recession since the Great Depression of the 1930s. Critics blamed Reaganomics. They argued the cuts to tax rates and the federal budget were too deep and that the free market prompted higher prices and interest rates.

Eventually the economy recovered. Inflation dropped from 13 percent to 4 percent. Unemployment fell from 10.4 percent to 5 percent. Many workers suddenly had more disposable income. Yet Reaganomics was responsible for widening of the gap between wealthy and poor Americans. During Reagan's administration, the wealthy grew wealthier, while the poor grew poorer. Because Reagan's economic policies benefited mainly the wealthy, the 1980s were marked by conspicuous consumption—even as people dependent on social welfare programs struggled daily. Despite the economic divide in the population, Republican conservatives remained firmly in Reagan's corner. His lead in reducing governmental regulations and his support for social conservatism and individual rights earned admiration among the New Right.

Strategic Defense Initiative

The Strategic Defense Initiative was a plan for a defense system to protect the United States from Soviet nuclear attack. Wildly expensive and technologically impossible, the system was never completed.

When Ronald Reagan took office in 1981, the United States and the Soviet Union had been Cold War adversaries for over 35 years. An ardent anticommunist, Reagan denounced the Soviet Union as an "Evil Empire." Reagan had the Soviet Union in mind as he followed through on his campaign promise to build up the U.S. military. The Soviets had had an advantage in the arms race since 1958 when they developed the first intercontinental ballistic missiles. An intercontinental ballistic missile (ICBM) is a nuclear-armed missile designed to be launched from a military ground base at a target up to 3,500 miles away. The United States developed its own ICBMs in the early 1960s. When the United States and the Soviet Union had created equal supplies of nuclear armaments, each had more than enough weapons to completely destroy its foe. They had reached the stage of mutual assured destruction. Mutual assured destruction (MAD) was a military doctrine of nuclear deterrence: if each opponent realizes launching a nuclear strike will lead to its own destruction, neither side is likely to begin an attack. In 1983 Reagan announced a plan he hoped would change the dynamic of the arms race and give the United States a military advantage beyond the nuclear deterrence of MAD.

In a speech to Congress, Reagan called for the development of the Strategic Defense Initiative (SDI), a space-based defense system proposing use of lasers to shoot down intercontinental ballistic missiles launched from the Soviet Union. Reagan argued that once the United States had such a powerful deterrent, the Soviets would never dare to attack the nation. In addition the Soviet Union would likely bankrupt itself trying to develop a similar system of its own. Reagan was betting SDI, real or not, would keep Soviet aggression in check.

Many Americans, including scientists and journalists, were skeptical of SDI. Critics thought the project was pure fantasy and nicknamed it "Star Wars," after the popular science fiction movie. They argued technology was nowhere near a point where the project would be even remotely viable. Others objected to the $26 billion price tag, which Congress was willing to pay. Arms control experts noted SDI would destabilize the deterrent effect of MAD. They believed SDI would likely escalate the arms race and prevent the two sides from ever participating in peace talks.

In the end, SDI wasn't built. Although the Soviets had refused in 1983 to negotiate at the Strategic Arms Reduction Talks (START), by 1985 they had changed their minds. Six years later the Soviet Union collapsed, ending the immediate nuclear threat to the United States and the nation's need for SDI.
One of five generations of ICBMs developed by the Soviet Union, the SS-11 carried three nuclear warheads and was deployed fully fueled in underground silos. SS-11s were phased out and dismantled in the 1990s.
Credit: Courtesy National Archives, photo no. 6370910

Soviet ICBM Deployment Map, 1982

By the 1980s the Soviet Union had overcome any technical weaknesses in its nuclear capability. In 1982 it deployed 1,398 ICBMs, some carrying as many as 10 nuclear warheads, in silos along its western and southern borders.
Credit: Courtesy National Archives, photo no. 6353795

Iran-Contra Scandal

The Iran-Contra affair involved members of the Reagan administration violating a ban on selling weapons to Iran and using proceeds from the sales to support anticommunist activities in Nicaragua.

The Iran-Contra affair was a political scandal involving members of Reagan's administration who secretly sold weapons to Iran and used the proceeds to fund counterrevolutionaries in Nicaragua. The scandal had its roots in two troubled regions of the world—Central America and the Middle East.

In 1979 a group of procommunist Nicaraguan revolutionaries called the Sandinistas overthrew dictator Anastasio Somoza Debayle. Uneasy about the rise of a communist regime so close to the United States, Reagan authorized the Central Intelligence Agency (CIA) to train and fund right-wing counterrevolutionary militias called contras. When the American public protested, Congress passed two amendments known collectively as the Boland Amendment. They came into effect in 1982 and 1984, respectively, and banned all U.S. military aid and funding to the contras.

In the Middle East, Muslim extremists in Lebanon routinely took Americans hostage. The hostage-taking was in retaliation for U.S. support of Israel's occupation of Lebanon. Reagan wanted the hostages returned. In 1985 he secretly authorized members of the National Security Council to sell weapons to Iran for $48 million. Iran needed weapons in its war against Iraq. In return for these weapons, Iran was expected to help obtain the release of Americans held in Lebanon. The arms-for-hostage transactions were kept secret for a reason. They not only violated a trade embargo with Iran but also contradicted White House policy of never negotiating with nations that supported terrorism.

Members of Reagan's National Security Council illegally used money from the Iran weapons sales to fund the contras in Nicaragua. When news of the weapons sales and the diversion of money became public in 1986, Americans were outraged. Deeply embarrassed, the president authorized the Tower Commission to investigate the affair. The Tower Commission's investigation implicated Marine Corps Lieutenant Colonel Oliver North as a planner of the operation. Although President Reagan accepted responsibility for the arms deal with Iran, he denied any knowledge about providing funds to the contras. The Tower Commission submitted its final report in 1987, in which it criticized Reagan for his "lax managerial style and aloofness from policy detail." Reagan's credibility on foreign policy issues was called into question. North was later tried and convicted for his role in the arms deal. He appealed that decision in U.S. v. North, and in 1991 all charges against him were dropped. The appellate court judge ruled that North's 5th Amendment rights had been violated in his earlier trial.