1984: United States

THE PRESIDENCY

In the fourth year of his presidency, Ronald Reagan benefited from a generally prosperous economy and enjoyed consistently wide popularity. Although budget deficits remained at record levels, the president was credited with reducing inflation and unemployment. His handling of foreign policy came under some criticism after U.S. Marines retreated from Lebanon, U.S.-Soviet relations failed to improve measurably, and disagreements with Congress over Central American policy grew heated. But visits to China and Europe were viewed as successful, and a September meeting with Soviet Foreign Minister Andrei Gromyko helped ease doubts about the administration's willingness to negotiate with the Soviets.

Throughout the year, Reagan stressed that 'America is back,' a theme first set forth in his January 1984 State of the Union address. Buttressing this much-repeated message of hope and patriotism with symbols such as the Olympic torch and heroism 40 years ago at Normandy, the president and his supporters argued that under Reagan the United States had regained confidence in itself. On a more specific level, during his reelection campaign the president revealed little of where he hoped to lead the nation during a second term. By late in the year, debate centered both on the Reagan record of leadership and on the question of whether, at age 73, the president was vigorous enough to build on that record in the future. Concern over the 'age factor' was heightened this year by reports that the president occasionally fell asleep at cabinet meetings and by the verbal confusions that sometimes punctuated his press conferences. The general public, however, seemed to view these lapses as minor, even endearing, foibles of a basically healthy and strong leader.

The Economy.

Most of the economic numbers looked good for Reagan in 1984. The annual inflation rate, which stood at 12.4 percent before he took office in 1981, was running at about 4 percent for much of 1984. In June the civilian unemployment rate fell to 7.1 percent, the lowest level since the president took office (although it later held at around 7½ percent). Most important of all, the economy grew robustly in the first half of the year: after adjustments made for inflation, the gross national product grew at an annual rate of 10.1 percent in the first quarter and 7.1 percent in the second three months of the year. A marked slowdown in the GNP growth rate in the third quarter, to an estimated 1.9 percent, was welcomed by most experts as necessary to prevent higher inflation. Virtually the only economic trouble spots for the administration going into the November elections were stubbornly high interest rates and the growing federal deficit.

The Deficit.

Under the Reagan administration, the federal budget deficit ballooned from $55.2 billion in the 1981 fiscal year to $175.3 billion in fiscal 1984, a figure so high that many economists believed it would threaten the future of the recovery. This increase in the deficit posed a difficult political problem for Reagan, who prior to taking office had promised to balance the federal budget by 1984. Throughout the year, however, the president refused to spell out details of administration plans to reduce deficits, beyond contending that a combination of robust economic growth and unspecified spending cuts would do the job. He insisted repeatedly that a future tax increase would be imposed only as a 'last resort.' In August, the White House projected that by 1989 the deficit would be reduced to $160 billion and possibly even lower if certain policy changes were accepted by Congress. In contrast, the Congressional Budget Office issued its own projection, indicating that without further tax or spending changes, the deficit would rise to $263 billion by 1989.

Aware of its political weakness on this issue, the administration constantly sought to downplay the deficit increase or to blame it on Congress. At the annual economic summit of the leading industrial democracies, held in London in June, representatives of the six other attending nations urged the United States to reduce its deficit in order to bring down worldwide interest rates and ease the Third World debt crisis. Treasury Secretary Donald Regan replied that a connection between deficits and interest rates had not been firmly established. Similarly, in his first debate with Democratic presidential candidate Walter Mondale, held in Louisville, Ky., on October 7, Reagan denied that there was any link between high deficits and the possible return of high inflation. He contended that congressional Democrats were blocking progress on the deficit problem by opposing an administration-supported constitutional amendment mandating a balanced federal budget.

Policy Disputes.

At various points in the year, policy disputes within the administration surfaced with embarrassing results. On May 8, the White House criticized the Federal Reserve for pursuing a 'tight money' policy (that is, restricting the flow of money to the economy) that some presidential aides believed would hurt the ongoing economic recovery. The following day, however, Martin Feldstein, the chairman of the president's Council of Economic Advisers, backed the Fed publicly. At the same time, Feldstein announced his resignation from the council to return to Harvard, ending a long series of public policy disagreements with the administration. A mix-up occurred in August, when Vice-President George Bush, responding to Mondale's call for a tax increase to reduce the deficit, said that he could envision some circumstances under which a tax increase might be necessary. The White House immediately put out the word that the president had no 'secret plan' to raise taxes, as Mondale charged. The president went even further on the matter in the October 7 debate with Mondale, asserting that he was 'not going to go for' a tax hike.

Foreign Relations.

U.S.-Soviet Relations.

Throughout the year, the president sought to soften his previously harsh rhetoric about the Soviet Union. His 1983 description of the Soviets as an 'evil empire' was replaced in 1984 by an oft-stated desire for 'peaceful competition.' Nevertheless, relations between the superpowers — strained by the Soviet walkout from two sets of arms control talks in Geneva after NATO began deploying U.S. Pershing II and cruise missiles in Western Europe in late 1983 — continued to deteriorate in the first half of 1984. The death in February of Soviet leader Yuri Andropov, resulting in the second reshuffling of the Soviet regime in 15 months, temporarily disrupted diplomatic dialogue between the two governments. The following month, a Soviet submarine in the Sea of Japan collided with the U.S. aircraft carrier Kitty Hawk, leading to jitters in both countries. Then, in May, the Soviet Union withdrew from participation in the 1984 Summer Olympics, to be held later in the year in Los Angeles, citing concerns for the safety of its athletes. Finally, in the same month, Soviet Defense Minister Dmitri Ustinov warned that additional Soviet missile-carrying submarines had been placed off the coast of the United States, to counterbalance the deployment of U.S. missiles in Europe. This move did not significantly change the strategic balance, but it alarmed many Americans. Reagan shrugged it off, however, noting at a White House press conference, 'If I thought there was some reason to be concerned, I wouldn't be sleeping in this house tonight.'

By this point, U.S.-Soviet relations had reached such a low ebb that Senate Majority Leader Howard Baker (R, Tenn.) and Senate Foreign Relations Committee Chairman Charles Percy (R, Ill.) on June 12 urged Reagan to hold a summit meeting with Soviet leader Konstantin Chernenko. Reagan agreed, announcing on June 14 that he was 'ready to meet and talk any time' with Soviet leaders. In the ensuing months, however, no summit was scheduled, and Reagan entered the November presidential election as the only U.S. president since the beginning of the nuclear age not to have met with his Soviet counterpart.

Administration efforts to improve relations with the Soviets were not aided when, while preparing for one of his weekly Saturday radio addresses in mid-August, Reagan joked, 'My fellow Americans, I am pleased to tell you that I've signed legislation that will outlaw Russia forever. The bombing begins in five minutes.' White House arguments that the remark was entirely lighthearted and supposedly off-the-record failed to mollify the Soviets. Despite the gaffe, bilateral relations improved slightly when, in a surprise move announced in September, the president said that he would meet with Soviet Foreign Minister Andrei Gromyko when the latter came to the United States for the 39th session of the United Nations General Assembly. Then, in November, it was announced that Secretary of State George Shultz would meet with Gromyko in early 1985 for preliminary arms control talks.

U.S.-Soviet relations also were at the center of the Capitol Hill debate over the MX missile. The administration, fighting to win congressional approval for funding for 40 additional MX missiles (21 were funded in 1983), argued that premature abandonment of MX production would send the wrong message to the Soviets, who would take it as a sign of U.S. weakness. In the end, the administration settled for a compromise. Funding was provided for 15 more missiles. Continued production of the 15, however, would be contingent upon further congressional approval in 1985.

Lebanon.

The administration's most serious foreign policy reversals of 1984 came in Lebanon. As the year began, U.S. Marines sent to Beirut in 1982 as part of a multinational peacekeeping force were under siege in heavily fortified positions around the Beirut airport, and the U.S.-backed government of President Amin Gemayel was struggling with little success to establish control over the warring factions in the Lebanese civil war. On February 7, with the Lebanese Army in a virtual state of disintegration and Muslim militia forces in control of most of Beirut, the president announced that the Marines would be 'redeployed' to ships offshore, and by the end of the month the Marines were gone. The retreat from Beirut seemed hasty and disorganized to some observers; at one point, a White House spokesman and the secretary of the navy could not agree on whether U.S. ships were shelling Muslim positions along the coast to cover the Marines' retreat or to support the Lebanese Army. However, opinion polls taken after the withdrawal of the Marines indicated that the U.S. public did not think less of the president as a result of what critics viewed as the virtual debacle in Lebanon. For his part, Reagan blamed his congressional opponents for stimulating 'the terrorists to further attacks' and charged that their 'second guessing' had 'undermined our policy.'