Like Obama, Reagan Faced Harsh Economic Times

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President Obama will deliver his first speech to a joint session of Congress Tuesday night at the Capitol. The main focus will be the economy. The last U.S. president to inherit a serious economic crisis was Ronald Reagan in 1981.

Obama has issued a dire assessment of the current state of the economy. He has often said that things haven't been this bad since the Great Depression. When President Reagan took office, he often used that same phrase. He gave his first speech to Congress on Feb. 18, 1981.

"Interest rates have reached absurd levels of more that 20 percent — and over 15 percent for those who would borrow to buy a home," Reagan said then. "All across this land, one can see newly built homes standing vacant, unsold because of mortgage interest rates."

Reagan also mentioned the issue of jobs:

"Almost 8 million Americans are out of work," he said. "These are people who want to be productive. But as the months go by, despair dominates their lives. The threats of layoff and unemployment hang over other millions."

Reagan then laid out his prescription: a four-point plan that would slash government spending, cut taxes, relax government regulations and use monetary policy to right inflation.

Kenneth Khachigian, a senior partner with the law firm Brownstein Hyatt Farber Schreck, was Reagan's chief speechwriter in 1981. Reagan drove home one basic theme, he said. "He made it clear: We've strayed from first principles, and we must alter our course."

Khachigian believes Obama will say "something like the same, but it's going to be a different set of principles — and a different course."

Twenty-eight years ago, Reagan portrayed regulation as an onerous impediment to growth. Obama has been strongly critical of a culture of deregulation; he says it has led to risky practices in the financial industry that ultimately pushed the entire economy to the brink.

Reagan attacked government spending, with the exception of the Pentagon. In the reverse line of thinking, Obama signed an unprecedented $787 billion stimulus package.

Obama's speech Tuesday night is part of a White House push for public support for the hard steps still to come.

What was the public response to Reagan's speech? After all, he was known as the Great Communicator.

"There wasn't much public response," says presidential scholar George Edwards, a political science professor at Texas A&M University.

"President Reagan was not able to cause a substantial shift in public opinion," Edwards says. "We shouldn't expect any president to be able to do that, particularly in highly polarized times."

Obama will speak to a Congress in which his party controls both the House and Senate. Reagan did not have such an advantage. Still, the recent battle over the stimulus bill is a sign of even tougher battles to come.

The real value of a speech before a joint session is that it allows the president to demonstrate that he has a plan and to help people see better days ahead. It also lets him establish the terms of the debate in Congress and around kitchen tables and water coolers across the country.

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