Conservative Policies under Reagan and Bush Chapter 25, Section 2 Notes

Objectives Summarize Reagan’s economic programs. Describe the changes that occurred in the makeup and decisions of the Supreme Court Identify results of deregulation Analyze the presidential elections of 1984 and 1988

Main Idea and Terms/Names Reaganomics Supply-side economics SDI Sandra Day O’Connor Deregulation EPA Geraldine Ferrara George Bush Presidents Reagan and Bush pursued a conservative agenda that included tax cuts, budget cuts, and increased defense spending

Reaganomics Reagan won election of 1980 New Economic Plan – Reaganomics Budget cuts Tax cuts Increased defense spending Wanted to reduce size and influence of federal government Encourage private investment

Budget Cuts Downsize federal govt through cutting out social programs Save money Did not effect middle class entitlement programs Congress slashed budget of food stamps, mass transit, welfare, student loans

Tax Cuts Supply-side economics US Govt lowered income taxes by 25% If people pay less in taxes, they will save money (in theory) Banks could loan that money to businesses Businesses are the base of prosperity US Govt lowered income taxes by 25% “Trickle Down” Theory – more rebates to rich - $ would trickle down

Increased Defense Spending Reagan doubled the defense budget Strategic Defense Initiative (SDI) Defense system to protect Americans from enemy missiles Known as “Star Wars” System would cost trillions of dollars

Recession and Recovery Economy had sunk into recession Worst since Great Depression 1983 – Economic upturn leads to recovery

National Debt Climbs Economy still had problems Tax cuts helped the rich Social welfare cuts hurt the poor Federal spending was larger than income – deficit National debt doubled during Reagan’s first term

Supreme Court Reagan nominated conservatives to Supreme Court Sandra Day O’Connor Antonin Scalia Anthony Kennedy Bush continued the trend David Souter Clarence Thomas Scalia Kennedy O’Connor Thomas Souter

Supreme Court Conservative William Rehnquist was Chief Justice Ended liberal control of the court Restricted abortion Restricted civil rights Narrowed rights of accused

DeRegulation Deregulation – cutting back of federal regulations of industry Reagan removed price controls on oil Eliminated federal health and safety inspectors for nursing homes Deregulated savings and loan industry Increased competition and lowered prices for consumers

DeRegulation Reagan cut the EPA’s budget Government sold public land to private developers Opened continental shelf to drilling Risks? Cut timber in national forests

Election of 1984 Reagan had a conservative coalition Business – liked deregulation Southerners – liked small fed. govt Westerners – liked less environ. restrictions Reagan Democrats – Dem. too liberal 1984 – Reagan/Bush v. Walter Mondale/Geraldine Ferraro Reagan won by a landslide

Election of 1988 George Bush (Reagan’s VP) v. Michael Dukakis (Gov. of Mass.) Economy was strong –no reason for change Bush was part of moral majority Bush – “no new taxes” Bush ran negative ads – low voter turnout Bush wins…53% of vote