Tip, Gipper: Debt-Raising 1981-Style

Photograph by David Hume Kennerly/Getty Images

President Ronald Reagan and Speaker of the House of Representatives Tip (Thomas Philip) O’Neill share a meal at the White House on September 1981 in Washington, DC.

As  lawmakers clash over how to reopen the federal government and raise the debt ceiling, a new book by Chris Matthews recounts how lawmakers lifted the federal borrowing limit 33 years ago amid divided government.

It was early 1981 and Ronald Reagan was the new president, a Republican who had to work with a Democratic-controlled House led by Speaker Tip O’Neill, then Matthews’ boss.

Reagan needed Democratic votes to raise the debt ceiling to $985 billion from $935.1 billion. (The Treasury Department says it’s no more than 14 days away from exhausting measures to avoid breaching the current limit of $16.7 trillion).

“More meetings with Cong. Leaders on trying to get debt ceiling lifted,” Reagan wrote in his diary on Jan. 30, just 10 days after taking office. “If dont we’ll be out of money by Feb. 18. Cong. Recessing from 5th to 12th. Must get passage of bill by Fri. the 5th.”

When Reagan’s top Capitol Hill lobbyist, Max Friedersdorf, asked for O’Neill’s support, the Massachusetts Democrat “made a simple request,” Matthews wrote.

The speaker “wanted a personal note from the president to each and every Democratic member of the House asking for his or her support in the matter of raising the debt ceiling,” according to Matthews.

Just the previous year, President Jimmy Carter and the Democratic-led Congress raised the debt ceiling without a single Republican vote.

“The asked-for letters arrived the next day – all 243 of them,” Matthews wrote.

O’Neill wanted a “pragmatic cease-fire” and also to  inoculate his members from political attacks.

“Looking to the future, if a Republican challenger were to slam one of O’Neill’s Democrats for big spending, pointing to his vote to raise the debt ceiling as evidence, the note from Reagan would give him adequate cover,” Matthews wrote in the book entitled “Tip and the Gipper: When Politics Worked.”

The House passed the debt-limit increase on Feb. 5, 1981, by a vote of 305 to 104. The Senate cleared it the following day, 73 to 18.

“That afternoon received a great present — our own Sens. who had held out on debt ceiling turned around & we carried the day,” Reagan wrote in his diary on Feb. 6. He signed the measure into law the next day.

Fast forward to today, when the two parties are more polarized.

With the government partially closed and an Oct. 17 debt-ceiling deadline looming, the partisan battles over the two issues “are beginning to merge into a single fiscal fight, raising the stakes for Republicans and Democrats to end the impasse,” as Bloomberg’s Mike Dorning reported.

Imagine what would become of a president’s letters today.

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