Other stops on our tour at cspan. Org citiestour. You are watching American History tv, all weekend every weekend on cspan3. We continue now with our look at the history of spokane. Next, an interview recorded for the cspan broadcast the sidebar. Reagan era tax reform. , seniort is henry olson fellow of the ethics Public Policy and the author of the working class republican, Ronald Reagan and the bluecollar conservativism. Tax reform is a talks desktop legislative priority for president trump. This look that president reagans efforts to reform the tax code in the 1980s. This is American History tv on cspan3. Fellow, olson, a senior out with a new book titled the working class republican, Ronald Reagan and the return of bluecollar conservativism. Lets talk about tax reform because you wrote a piece that republicans are chomping at the bit to pass tax reform. How did it get there . Henry olsen to passing this tax reform, they need to pass something that gives everybody a stake in the system. Not just focus on higher rate reduction, but include payroll tax cuts for the workingclass people that put donald trump in the white house. Something that gives americans a leg up being hired for companies and keep middleclass tax cuts and be more like the reagan style tax reform within the principles so far. Than the principal so far. At what point did Ronald Reagan talk about tax reform . How long did it take for negotiators to piece together a bipartisan plan, and what are the lessons we need to take . Henry olsen reagan had two major tax plans. One was a tax cut, but he started talking about starting when firstabout this inaugurated. It took a year and a half for congressional negotiators to come up with a final plan. It required a lot of giveandtake. It required people who were willing to do something they had not been willing to do earlier in the process. It was not until 1986 when both parties came together and the democrats controlled the house, republicans control the senate, to give the landform landmark tax reform. They are still polar opposite today. What was reagan able to do . Henry olsen at the time democrats were reacting to reagans theft of their voter base. Millions of people who said they were democrats actually at that time voted for Ronald Reagan and he was somebody who held a lot of sway among their constituents. They moved in a way to neutralize the tax issue so that was no longer a thing that could cause their voters to leave. They also recognized that the United States suffered from real competitiveness issues, particularly at a time where there were tax shelters that did not provide economic benefit that allowed wealthy people and corporations to get income. They found a way for republicans to get on board. Get allver realized to of that. How did that play along conservatives . Henry olsen they wrestled with that. They were so in love with the issue that the compromise gave hardline conservatives sometimes opposed compromises. For the Social Security tax and benefit compromise, Newt Gingrich and ron paul and jack either abstained, but they went with it because Ronald Reagan said there was half alone for conservatives. It really was. What was his role . The chairman of the ways and means committee, a democrat from chicago, the speaker of the house was Ronald Reagan part of the negotiations . Was he in the details, or did he take the 30,000 level approach . Henry olsen he was involved with negotiations with the chair people. There were times he was briefed on his side and worked out agreements with what he could do and not do with reagan personally even if his staff was not in the room. But generally reagan was somebody watching what was happening as opposed to daily negotiating. He does not have time to do that. But he made sure there was something coming together he could be supportive of. Do you think he got it right . Henry olsen i do. To 28 ,from 50 eliminating the tax shelters. He increased the personal deduction and made other changes that eliminated millions of poor people out of the tax roll. Said he got a vote that was important to him. About had been talking cutting these people taxes and removing them for millions of years, but he let the other guy think it was his idea. I was going to ask what the democrats got out of the deal. Anything else they feel they won . Henry olsen that was the biggest thing they think they came along with winning. They got an increase in the Capital Gains tax for a brief time. It was identical to the top marginal rate that Capital Gains holders so i tax increase. I am sure that was something they valued as necessary to make the revenues balance. It was to be a revenue neutral bill, and needed to have revenue from the increasing Capital Gains tax to offset the revenue losses from other aspects. What were the lessons in this time . It was a twoyear period between the start of the outline of the president and the final passage. Henry olsen what you should realize is legislation is a moving target, legislation can be done well but takes time. It is not something that comes zeus fullyhe head of formed. Realize need to Everyone Needs to have a stake to make this work. Most people could see themselves as winners. It was not something where most people were sacrificing for a theoretical common good. Any common good out of this white house that goes to this congress, try to find as many winners as possible, focusing on thecorporate rate paid by most companies, focusing on the incentive to the things every american faces. Researching this book and trying to understand Ronald Reagans role, did you get a sense of how they unfolded, how they took place, where they took place between the key leaders . Henry olsen i focused my book on the principles of what reagan was talking about as opposed to the details of who said what on may 17, 1985. This was largely a negotiation that was taking place in congress. It was one taking place between the Republican Senate and ross michalski. He was the key player in making this happen, and the president and his staff were kept uptodate and involved in this. They had a broad influence, but the details were worked out at the congressional level. I wonder if there are lessons today when it comes to this republican president , a Republican Congress, yet deep divisions in the gop on this and other issues. Henry olsen one of the things they should do is rather than put forth a proposal that has by the entirety of the republican conference, what they should do is work even the circumstances that they probably dont have a year and a half to get something done this time. They need to make sure the discussions and necessary compromises are taking place behind closed doors now before the bill is written. It could be late by time they go forward as im sure they will, it will not be started until september. Nobody will want to take this into the next congressional section. They will need to pass it by august. They need to be working on their compromises now also the first bill is closer to the final form when it was in reagans time. Van it was in reagans than it was in reagans time. This pastlipped election. Why . Henry olsen they were under economic pressure, people who have been under pressure since chinas secession from the wto. They thought barack obama would help them out, but they did not benefit. They heard donald trump echoing their vision that trade and immigration lowers their wages and cost them jobs. Donald trump said in no Uncertain Terms that the entire circuit Social Security and medicare. E said he would not cut them and basically they saw somebody who in his language and attitude shared their worldview and said he had their back. Both parties have shown themselves not to be to these voters as trustworthy. The one to to try. We are now in a debate over health care. You wrote how Ronald Reagan would fix the Gop Health Care mess. His approach to government and insurance, what was it . Ronald reagan was in favor of the idea government should provide Health Insurance or pay for it. The way he talked about it, as early as 19 asked you want, when yet moved to being liberal he had moved from being liberal to as early as 1961, when he moved from being liberal to conservative. I think what reagan would have focus less on saving money and more on providing health care the private market can depend on. He would be in favor of keeping coverage for people with the working poor and the Medicaid Expansion and focus on deregulation so it was not one size fits all insurance market, but in private insurers could innovate and create better products people could afford. Kind of the exact opposite of priorities of the original bill. Ronaldsaid earlier reagan had to work with democrats because they controlled the house and senate. In the first two years of the Obama Presidency he did not need to work with republicans. Now democrats do not need to work with strong. Trump. Is it better to have bipartisanship and giveandtake on legislation to make it longstanding . Henry olsen it is better to have both parties invested if it is something this widespread. It does not always happen. When Ronald Reagan proposed his first tax cut, he was vociferously opposed by the democrats. There were conservative democrats that Ronald Reagan had carried with large margins. So the question is, if you cannot have bipartisanship because one party will not play ball, you have to make sure every part of your party has a stake in your bill. That requires compromise, forethought, and leadership. That is what reagan did in his tax cut bill and his original proposal. That is what he did in his budget bill the first year as resident, making sure he had a unified Republican Congress so he would not have to suffer defeat given Republican Democratic leadership. We are not seeing a Health Care Debate right now. What has changed . Henry olsen reagan came to office when american politics was changing. The original american political structure, Party Structure was built off the civil war where it was not based as much on what you believed but whether granddaddy fought for the union or confederacy. Creates election helped what we have today, a wholly liberal Democratic Party and conservative Republican Party. With that over, it is like to shift passing in the night trying to be two ships passing in the night trying to get to the same destination. There are few incentives besides patriotism to come together whereas in reagans day there were more overlap between rigidityideological and people talking within the parties. As a country most americans would identify more as centerright or center level left. Henry olsen that is right, and that is one of the reasons why it is increasing frustration we had a primary system where the Party Candidates are selected by bosses were elected elected in the general election. The republican the Democrat Party puts forward more candidates for more ideologically to the left. You have this huge mass of people in the center right that increasingly feel unrepresented. They choose the lesser of two evils and a general election. Some people like these obamatrump voters see between the two ideologies. They are happy, because they actually want somebody who comes between the ideology of the two parties. Henry olsen lets talk about the speaker of the house. Tip oneill, in working with Ronald Reagan, he was the last speaker of the house to voluntarily leave. Everyone sends every either eitherd since defeated or lost control of the house. What does that tell you about to go and his relationship with Ronald Reagan and his hold on the Democratic Caucus . He was a very smart politician. New how to maintain at the time he had a more diverse caucus then john boehner had or paul ryan had. He had to combine able who were 100 of liberals, 100 conservatives, and yet he was able to do it. He left on his own terms. I think it shows what a wise and smart politician he was. While he opposed Ronald Reagan on many things, he also knew how to cut a deal, and he knew what the incentives of his party were. When he fought, he did. When he didnt, he kept the best deal rather than resist, resist, resist. That seems to be the modus operandi of either party now. Henry olsen what has changed . The Party Incentives have changed, they are more afraid of their primaries than the general elections. Few people in the house are subject to serious competition in general election, but more so in the primaries. They are afraid of the challenges. More in commons than many of the ideological warriors on each side would admit. I think if you had residential encouraginghat was genuine bipartisanship that you might find people in the centerright and centerleft that find courage and president ial leadership. That was something president obama was never willing to exert. Never willing was to exert Political Capital on behalf of bipartisanship. It is something that has been lost. We havent seen anybody try and do that since the preimpeachment days of bill clinton. Henry olsen lets talk about tax reform. One of the issues i read about was that Ronald Reagan wanted revenue neutral. We are seeing the debate today where democrats say this tax point is going to blow a hole through the debt and deficit. The problem with revenue neutrality is that in order to get that, what made it work politically in Ronald Reagans days is there was a lot of on economically viable actions. They benefited a few wealthy americans. You could take those out and gain revenue and distribute the game. It was a large hike on some corporations and distributed the games the games. The gains. Any sort of the revenue neutrality means taking out of out large tax reductions. It would be wiser to take that on and by the bullet, but it is becoming difficult, particularly when you are choosing not to go a bipartisan route and you will have to get all 52 republicans on board. Any one person has immense power. That is why they are looking at the tax cut approach, which is not the best. How does the gop get there and do democrats during the . I think with the gop needs to do is give the obama workingclass voter a break in the bill. Since medicare is largely paid for by general revenues and not be payroll tax, you dont have the same relevant you would have a Social Security. That gives people hundreds of dollars a year. There should also be a tax credit for jobs created in the United States and a tax credit to american businesses that pay above market average salary, in a way to being a thumb on the scale, so that instead of rewarding shareholders you are rewarding workers. That is what American Workers like. And payt more jobs rises for American Workers. If you include those things in the bill, you will have a much greater likelihood of public support. If you are open to it, you might have a likelihood of some democratic support, because you are giving them something. They want to be for the obama trump voters. It is not just a big corporate bailout. Henry olsen why is americans tax code so complicated . Why does it take so long to complete your taxes and why so many loopholes and deductions . Every loophole or deduction starts at the good interest at heart. You try and carve out this does this to help somebody out, and over time it becomes like barnacles ownership, something where you start with one and suddenly you have hundreds. After these things are in, nobody wants them to go, because they benefit from them. The state and local income tax deduction, which the president s advisers propose getting rid of helps lots of upper middleclass reduce and individuals their federal taxable. You get rid of it and many of these people will see a tax increase. That is what will happen. They naturally will resist that. When you have many people resisting change and they cant come together for the common good. President reagans proposal to come together. That was when they were dealing with less protect give tax shelters protective tax shelters. Hypothetically, if Ronald Reagan and tip oneill could sit down with donald trump and paul ryan, what do you think they would tell them . What advice would they give the current speaker, president , and the house and Senate Leadership . I think they would say you are dealing with real people, not concepts. You want to do some thing is best for everybody, that means you have to listen to your opponents and try to bring them on board rather than trying to ram something through. You needhey would say to try and make as many winners as possible as opposed to trying to concentrate on a narrow set of winners and make the argument that by helping them he will help everybody in the longterm. Is about possible, people, and if you focus on those things were more likely to get a bill that is successful and supported than you would if you ignore those. , what didn your book you learn about Ronald Reagan . Was differente than the reagan people talk about. He was somebody that was principled rather than ideological. He was suspicious of Government Branch thatroot and the government down conservative. He was a person who, having been a democrat and seeing them as human beings, could see their point of view, even though he disagreed on many things. He was somebody who was bright and original thinker. He created something. His the soft his philosophy was not stealing berry goldwaters thunder. T was a blend of what was best he created a center right philosophy that created a massive majority during his lifetime. Henry olsen republicans today can learn what . They ought to learn what the real reagan was about, that he was about but who cared about people first, as he said, the realities of everyday life, not abstract concepts. He loves liberty, but he loved people more. His epitaph doesnt talk about liberty or freedom or beating communism. He says there is work in progress every human life. Ramin the words Ronald Reagan leftist or memory ever him by. I think the rep. King Republican Party can take that to heart. Henry olsen thank you for stopping by our studios. We appreciate your time. Thank you for your time. Cspans Carnegie Council for ethics in International Affairs is aans the sidebar weekly podcast. Every cspan podcast is available on the free cspan radio app for apple and android devices. Find out more at cspan. Org podcast. This is American History tv on cspan3. Usually, things run smoothly, but every once in a while Federal Reserve banks emerge into action. Lets go back in time. Back to 1992. It is august, 1992. The b52s release a new album. In minneapolis, the mall of america opens for business with 300 stores. It is the largest Shopping Mall in the country. Meanwhile, a major hurricane is moving directly toward south florida. We expect that the storm is going to be in our neighborhood here by early in the day monday. Monday, august 24, the storm hits with full force, carrying wins that reach 160 miles an hour. Local airports are shut down. Most of the areas without power. In its wake, devastation that is nearly total. All of my life savings. Everything. Tuesday, august 25, almost Everyone Needs food and emergency supplies, but most stores are shut down. We are selling generators, chainsaws, gas, oil. The only people selling things, town come from out of town. They wont accept checks or credit cards. There is a huge demand for cash and local banks are running short. That triggers Emergency Action by the miami branch of the Federal Reserve. The miami branch is part of the Federal Reserve bank of atlanta, which serves the southeast. Jay was at the bank after the hurricane struck. We started to call of the financials institutions and let them know we were in business and wanted to ensure that we that they may have a cash shortage and we will do whatever is possible to get their cash the cash to them. They deposit their extra cash in the and the fed credit their account. In normal times, local banks ask for cash as it is needed. In this case, it is needed immediately and in great quantity. Bob is Vice President of the First National bank of homestead. People literally had to walk out of the lobby with somewhere between 3000 and 5,000. Many people needed more than that and got more than that. You didnt have cash, you didnt have nothing. Mr. Sullivan homes a service station in homestead. That town was hit especially hard. There was no water, phone service, electricity. Just to buy ice, residents had to drive out of town and wait in long lines. Brooks sullivan needed an emergency generator. Pay 2000 or 2500 cash, no credit cards, no checks, cash. They wouldnt accept anything. Suzy was ind, charge of shipping cost to local banks. Tuesday, august