Obama Makes 'Hey!' Out of Reagan's Great Regret

By far the most memorable line from President Obama’s address on the debt ceiling last night was his quoting “one of my predecessors” on a measure similar to the budget proposal Obama supports to “raise revenue” by closing loopholes on higher-income-earning Americans.
The predecessor cited by Obama was Ronald Reagan, who appears to be agreeing with the incumbent by saying:  “Would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates and higher unemployment?”
The quote, from an address by Reagan to the Centennial Celebration of Billings and Yellowstone County (Montana) on Aug. 11, 1982, is accurate.  But it is a bit unfair, because Reagan’s remarks were made in support of a measure he came to deeply regret.
That year, nervous about deficit projections from the Reagan tax cuts of 1981, a bipartisan group of members of Congress known as the “Gang of 17” (sound familiar?) came up with TEFRA—the Tax Equity and Fiscal Responsibility Act—which former Reagan administration official Gary Hoitsma described as “a legislative package sold to President Reagan as a grand compromise constituting a 3-to-1 rate of spending cuts to tax increases.”
Reagan, as Hoitsma wrote in the Washington Examiner, “reluctantly agreed” with TEFRA and campaigned for it in addresses such as those in Billings on Aug. 11 of 1982 and in a nationally televised address Aug. 16. 
When TEFRA was passed and signed by Reagan, the 40th President described it as “a limited loophole-closing tax increase to raise more than $98.3 billion over three years in return for … agreement to cut spending by $280 billion during the same period.”
While the closing of the loopholes was quickly put into place, Congress never enacted any of the spending cuts.  Reagan came to regret his support for TEFRA, and years later he wrote:  “The Democrats reneged on their pledge [to cut spending] and we never got those cuts.” 
“I believe that the TEFRA compromise—the ‘Debacle of 1982’—was the greatest domestic error of the Reagan administration,” Edwin Meese III, Reagan’s counselor at the time, wrote in his 1992 book, With Reagan: The Inside Story.  “It was a complete departure from our tax-cutting mandate, failed to reduce the growth of government spending [and] did not decrease the deficit.  … Judged by the results, TEFRA was not only a mistake, it was an abject lesson in how not to reduce the deficit.”
So Obama did indeed quote Reagan accurately, but rather unfairly.  He was quoting Reagan’s words about something he soon came to regret—a lot.