On Wednesday, an anniversary will come and go, probably without much notice. Yet, the events of 55 years ago deserve to be remembered because they recall not only a hopeful moment in economic policymaking, but also a more positive era of national problem-solving.
On that day in 1963, a Democratic president, John F. Kennedy, delivered a “special message” to the 88th Congress on the need for a tax cut. We might note that in those days, Capitol Hill Democrats boasted no fewer than 66 Senators, and they dominated the House, too, with 262 Representatives.
So addressing mostly his fellow Democrats, Kennedy charged ahead, using language that recalled his 1960 campaign slogan, “Get the country moving again.”
Now it was President Kennedy in the bully pulpit:
“The most urgent task facing our Nation at home today is to end the tragic waste of unemployment and unused resources — to step up the growth and vigor of our national economy — to increase job and investment opportunities— to improve our productivity — and thereby to strengthen our nation’s ability to meet its worldwide commitments for the defense and growth of freedom,” he said.
We might pause to note that JFK used Democratic-tilting rhetoric here, focusing on “unemployment” and “unused resources,” the latter of which could be viewed as either human or physical. (This was, of course, the era before the Democrats went “green.” In Kennedy’s day, all resources were there to be mobilized and utilized.)
We might also regard the 35th president’s rhetoric about strengthening American power for the sake of “worldwide commitments for the defense and growth of freedom” as an artifact of the pre-Vietnam era.
In his message that day, Kennedy was unmistakable in his determination to focus on tax changes: “The revision of our federal tax system on an equitable basis is crucial to the achievement of these goals.”
Kennedy then listed the tax reductions he wanted, including cuts in both personal and corporate tax rates — from 91 percent to 65 percent and from 52 percent to 47 percent, respectively — as well as other changes, almost all of them downward adjustments.
Once again, Kennedy couched his tax-cut pitch in Democratic terms: “The chief problem confronting our economy in 1963 is its unrealized potential — slow growth, under-investment, unused capacity and persistent unemployment.”
In JFK’s word choices, we can hear the echoes of President Franklin D. Roosevelt’s rhetoric during the New Deal in the 1930s, replete as it was with exhortations to put and end to “underconsumption” and “idleness.”
Yet, unlike FDR, Kennedy’s preferred policy tool for energizing the economy was tax cuts, not spending increases. The result of a stifling tax code, JFK continued, “is lagging wage, salary and profit income, smaller take-home pay, insufficient productivity gains, inadequate federal revenues and persistent budget deficits. One recession has followed another, with each period of recovery and expansion fading out earlier than the last.”
Kennedy’s message did, in fact, get Congress moving again — at least the Democrats. On Sep. 25 of that year, the House passed, with only minor modifications, the president’s tax plan by a margin of 271 to 155.
Interestingly, House Republicans actually opposed the bill, 126 to 48. It was only the nearly eight-to-one margin among Democrats, 223 to 29, that clinched the bill’s success.
Sadly, President Kennedy did not live to see its final passage; he was assassinated in November 1963. So it was left to his successor, Lyndon B. Johnson, to guide the legislation to completion.
Working his former senatorial colleagues with his customary effectiveness, LBJ pushed the bill through the Senate by a wider margin than the House, 74:19. Once again, a higher percentage of Republicans opposed the bill than Democrats. President Johnson signed the legislation into law on Feb. 26, 1964.
From the perspective of today, we might look back on this Democratic support for tax cuts and Republican opposition with wonder. One possible explanation, of course, is simple partisanship: Democrats were loyal to their chief, and Republicans were, well, the loyal opposition.
However, a look at the two parties’ national campaign platforms, written later that year, shows genuine Democratic enthusiasm for tax cuts and genuine Republican ambivalence.
Democrats convened in August in Atlantic City and came up with the following: “The Revenue Act of 1964 cut individual income taxes by more than $9 billion … and corporate taxes were cut another $2.5 billion … Overall individual federal income taxes were cut an average of 19 percent; taxpayers earning $3,000 or less received an average 40 percent cut.”
Indeed, the platform added hopefully, “We will seek further tax reduction…”
By contrast, the Republicans, having met in San Francisco the month before, chose to make no direct mention of the tax cut in their platform. Instead, the GOP focus was on “fiscal irresponsibility.”
To be sure, Republicans were willing to entertain tax cuts, but only alongside spending cuts. Their campaign document merely allowed for “further reduction in individual and corporate tax rates as fiscal discipline is restored.”
The message to the voters of 1964 was clear: The Democrats were the tax-cut party, and the Republicans were the budget-cut party. The Democrats won in a landslide.
To be sure, there were many issues in the 1964 presidential election beyond tax cuts and the economy, including the civil rights movement and the comparative temperament of President Johnson and GOP challenger Sen. Barry Goldwater during the Cold War era. Yet, for down-ballot Democrats, domestic lunch-bucket issues were undoubtedly paramount.
So we can see: The Democrats, as a party, ran on tax cuts and economic growth — and they won big. By contrast, today’s Democrats have mostly ceded that ground to the Republicans, who today seem positively Kennedy-esque.
Perhaps it’s not a coincidence that over the last half-century, political fortune, too, has switched parties.
James P. Pinkerton served as a domestic policy aide in the White Houses of Presidents Ronald Reagan and George H.W. Bush. Since 2011, he has been the co-chair of the RATE Coalition, a group that advocates for a more competitive tax code.