WHENEVER RONALD Reagan gets stuck he starts over. Time and again he has quoted the American revolutionary, Tom Paine: "We have it in our power to start the world over again." In this spirit Reagan labeled his first term the New Beginning.
His second term, however, did not begin auspiciously. He moved from intransigence over the farm crisis to defeat over military aid to the contras to public relations disaster over the Holocaust. At Bitburg he seemed lost in a haunted wood. And after his experience with the ultimate Old World horror, at a graveyard impervious to his magic, his powers appeared to dim.
Bitburg did not fatally damage Reagan's popularity, but from the point of view of the new White House political team, the incident rendered his themes incoherent. More than his approval rating was at stake: If his second term failed, would the dream of a new Republican majority fade?
Last Monday, the president traveled to Disney World, where he declared a "second American Revolution" organized around tax reform. Just four months earlier, at his inauguration, Reagan had announced this very same populist "revolution." Now, he attempted to recapture those sunny days of January, before he dropped 10 points in the polls. The high school bands that missed marching in the inaugural because of the inhospitable weather marched. Time was starting over again.
At Disney World Reagan instinctively placed himself in the stream of popular culture; his natural understanding of it is one of the main sources of his popularity. His own career as a pop-cult figure has been indispensable preparation for his unparalleled political rise.
Going to Disney World was a kind of return to his roots. He had, after all, been the television host for opening-day ceremonies at Disneyland in 1955. Laying rhetorical wreaths at the shrine of Mickey Mouse was a familiar rite for him. Here was a utopian grassroots America, a monument to the founding father, Walt Disney, who said: "If you can dream it, you can do it." And it all began, the president explained, when a "farm boy" discovered that "he could entertain people by telling stories about a little creature with a high voice, red trousers and yellow shoes and white gloves." In Reagan's version, Disney's life was a populist parable of one of the "heroes of progress" against "government." The Disney story was a preview of Reagan's coming attractions.
Once again, Reagan was tranforming history into fable. In defense of his tax plan, he summoned from the past emotions and images of populism, which he redirected to fit his political needs.
Reagan's populism, however, is more than a desire for popularity.
Tax reform has been on everyone's mind in Washington -- including Reagan's -- for months. As early as mid-1984 the administration was quietly committed to making tax reform an issue. Some Congressional Democrats were also committed. But Walter Mondale chose to stress the deficit and Reagan chose not to complicate his campaign. The distractions in the early days of his second term delayed the introduction of tax reform. But those problems also gave the issue greater political immediacy.
The White House staff conceived of a New Improved Beginning. Without an instant remedy, Reagan might no longer define the public discourse and, anticipating the 1988 struggle to succeed him, the conservative movement might disintegrate into hostile factions. In the short run, the president's staff hoped that tax reform would overcome the immediate damage to his popularity. In the long run, they wanted to use the issue to help forge a conservative majority that would last beyond Reagan's tenure.
To attain the desired realignment, the Republican ranks must swell with voters who see the GOP as the party of "the people," not the country-club set. The "revolution," in short, must be populist. Tax reform is a means to an end, in the service of an attitude that, if sustained, may lead to a momentous political shift. Reagan's atmospherics are not besideb the point; they are to the point. How he shapes perceptions of his economic program determines political reality for the Republican Party. The play's the thing.
Whatever the administration is doing to the tax code, "populism" is the word being employed to justify it. On May 14, Treasury Secretary James Baker told the Houston Chamber of Commerce that "frustration with the tax system is deeply rooted in populism, and populism has been an enormously influential force in America's development." According to Baker, the new populism directly traces its political lineage to the "huge populist movement around the turn of the century."
Yet that movement advocated increased government regulation of the marketplace, even the nationalization of key industries, in the name of an opportunity society. The movement was subsumed within the Democratic Party and found a champion in William Jennings Bryan, the Great Commoner. In the climactic presidential election of 1896, the populists were decisively defeated by the Republican Party. And the outcome made the GOP the normal majority party until the Depression of the 1930s. It is among the more curious historical ironies that the future of the modern Republican Party should be determined by its embrace of "populism."
But are the Republicans really populists like the old-time populists? Is the Great Communicator the reincarnation of the Great Commoner? The program of the putative Republican populists is, in fact, a reversal of the original populist program. (Among the planks of the populist People's Party platform of 1892: "We demand a graduated income tax." The United States had no federal income tax then, much less a progressive one.) If a link exists between those populists and these "populists" it cannot be a continuity of demands; it must be something more abstract, a continuity of themes.
Populism, then and now, is built upon a series of simplifications: There was a golden age, which can be restored. The countryside, where authentic values are cultivated, is posed against the city, where false sophistication is bred. Conspiring against "the people" is a small elite, a faceless monopoly. Finally, the people's dreams are thwarted because of the illegitimate, perhaps foreign, source of the elite's power.
In classical populism, the "people" were yeomen farmers, and the monopoly was a conspiracy of Wall Street tycoons, personified by bankers who manipulated the money supply and railroad rates. They were transforming America into a foreign place, destroying the Jeffersonian vision of agrarian democracy.
Throughout his career, Reagan has rearranged the folklore of populism for his own particular ends. The golden age existed before the New Deal, which created the monopoly of big government. Individuals, who live on Main Street, are victimized by an elite lodged in Washington. Issues have no value on merit alone; they are ways to highlight the morality play. Tax simplification has meaning only as populist revival.
Reagan has sought a new animating principle to avoid the pitfalls of the second term, just as Franklin D. Roosevelt discovered economic regulation -- creating institutions and practices Reagan now opposes -- to give life to the Second New Deal. Unlike his hero, whose philosophy was constant improvisation, Reagan's program is drawn from a fixed ideology. Tax reform is simply its latest form. The new principle is the old principle; the second term is based on the same idea as the first term. That idea, of course, is economic individualism: If we are liberated from government constraints we will find our fortunes in the free market.
Although there is perennial public sentiment for a more equitable tax system, no mass movement is stalking the land as in the late 1970s when a tax revolt beginning with Proposition 13 in California helped lift Reagan into the presidency. If a populist "revolution" occurs, it must be organized by the White House, where the notion of a "second American Revolution" originated. The theoretical constituency of the plain people motivated by anger and resentment, which current polls are not detecting, has to be called into being. This is a daunting challenge since the main beneficiaries of the "revolution" are the wealthy. According to an analysis by the Center on Budget and Policy Priorities, for example, in the administration's plan, someone with a taxable income of $200,000 will get a $9,000-plus tax cut; someone with a taxable income of $20,000 will get a cut well under $200.
Last Tuesday, the Great Communicator delivered a populist address in defense of his plan. His formulations were familiar, but his logic carried him past any of his previous rhetorical destinations. On one side are "the people," composed of "individuals" and "families." This category is all-inclusive, except for the "special interests," an unspecified force that Reagan refers to as "they." And "they" have controlled "our tax system," making it resemble the corrupting Big City, "Washington itself: complicated, unfair, cluttered with gobbledygook and loopholes . . . ."
Then Reagan declared that "in both spirit and substance, our tax system has come to be un-American." According to his syllogism, if the tax system is "like Washington," it must follow that the nation's capital is "un- American." Reagan has called Washington many names before, but this is the first time he ever suggested it was foreign soil.
He explained that it was essential to construct a new dramatic scene. "We have made one great dramatic step together," he said, referring to his triumphant first term tax cut. "We owe it to ourselves to take another." The golden age he was evoking was not simply the pre-New Deal idyll. He added to it "1981," a golden age of optimism. Thus he attempted to recreate his own past.
In his closing sentences, Reagan spoke of "dreams" four times -- "dreams" that we must make "real," but are endangered by "special interest raids of the few."
Yet more than "special interests," albeit real, can impede making populist dreams into populist reality. For there are inherent tensions within Reagan's proposal, Reagan himself and the nature of populism.
Can the president repeat his 1981 policy victory? The problem with invoking the glory of the recent past is its present consequences. Reagan's tax reform is presented as the salvation from loopholes, many of which were put in place by his 1981 tax bill. But the main difference between 1981 and 1985 is the deficit. Yet Reagan's ideology demands that his reform be "revenue neutral" in order to prevent government, the agent of unhappiness, from getting bigger.
The White House concessions to "the special interests" during the crafting of the administration's proposal took it far from the Treasury Department's earlier and more pristine offering. When these concessions are toted up, the bill may actually be "revenue negative," adding billions to the deficit.
The tax reform, therefore, has the potential of locking the deficit in place, driving the budget process; assaults on government programs will continue to be the order of the day. Thus, Reagan's tax plan fulfills his ultimate aim -- dismantling Big Government.
To be "revenue neutral," the cost of Reagan's lower tax rates must be made up by eliminating the state and local tax deduction. In addition, the bill favors services over heavy manufacturing. When these provisions are laid over each other, a political map is discerible. The states that would lose the most from this measure are mainly in the Northeast and Midwest, essential to any Democratic presidential strategy. Thus, Reagan's tax reform might also have the effect of redistributing resources to the Republican base, stimulating its future growth.
Reagan himself embodies the tension of his program. He is a self-made man, yet his rise was financed by millionaire friends. Reagan is the Everyman who has become rich and wants to preserve the comforts of the millionaires. His image remains that of a man of "the people;" at the same time, his instinct, as Washington Post White House correspondent Lou Cannon has reported, is privately to wish for the end of all corporate taxation. For Reagan's plan to work, no matter how inconsistent with classical populism, his image must remain consistent.
Tax reform is an effort to provoke political change by means of populist appeals, but the history of populism is double-edged. It expresses not only the aspirations but the venom that follows when hopes are dashed. The original movement can be traced drifting from economic to moral crusades. William Jennings Bryan's career charts this trajectory, from the Cross of Gold speech against the plutocrats to the prosecution of the Scopes trial against the Darwinists. In the South, populism was side- tracked when the movement was turned from economic equality to racial division.
Populism emerges from a hostile suspicion of power and an obsession with the purportedly exotic vices of a cosmopolitan elite. When the promised golden age is not restored by economic nostrums, populist movements have become embittered and xenophobic. Populism has sought to destroy the elite's cultural corruption and replace its cosmopolitanism with a native purity.
The tenuous balance within populism is reflected in the contrast between James Baker's Treasury Department and Edwin Meese's Justice Department, between tax reform and the pornography commission. If any tax bill is passed, Reagan will naturally claim victory. But if the results do not satisfy the populist resentments he has raised, what happens to the constituency he has aroused? Some may demand that the economic "dream" be made "real," while others may turn to inflammatory cultural issues. Should that happen, hopes for the Great Realignment would evaporate.
For the moment, though, Reagan is in command of the debate. He has found his way back to the position he enjoyed last year, when his television ads declared, "It's morning again in America." The past, it seems, can be recreated. Now, it's morning again, again.