He says the government needs to restrain entitlement spending on pensions and health care to free up money for companies to invest more and thus boost productivity.
Reagan did tackle entitlements in 1983 by backing higher taxes and Social Security benefit cuts that had been advocated by a commission headed by Greenspan.
Trump, in contrast, hasn’t shown much desire to rein in entitlements and has vowed to protect Social Security from cutbacks.
In spite of Reagan’s efforts, federal deficits and debt grew during his tenure -- something the avowed proponent of a smaller government later described as his “greatest disappointment.”
It was the growth of those debts that forced Reagan to support higher government revenues after his initial tax cuts.
A year after those reductions, he went on television to make the case for legislation that combined spending reductions with higher taxes, including on cigarettes and telephones.
“You had this legendary tax cutter saying we have to raise taxes, we have to cut spending because these deficits are killing us,” said Len Burman, director of the Urban-Brookings Tax Policy Center in Washington who worked at Treasury on Reagan’s 1986 tax reform plan.
Martin Feldstein, who served as White House chief economist from 1982 to 1984, blamed Congress for pushing Reagan into running larger deficits. The Harvard University professor voiced hopes that lawmakers will play the opposite role now by acting as a check on any tendency by Trump to run up government red ink.
Regulatory Reform
John Snow, who served on a regulatory reform task force for Reagan, said the president also didn’t do as much on that front as he could have. “We came up with a lot of ideas, some of which got dealt with but unfortunately many did not,” said Snow, who counts himself a fan of Reagan and who later became Treasury secretary in the administration of President George W. Bush.