On Chicago’s Morning Answer, Dan and Amy were joined by renowned historian and economist Amity Shlaes for a conversation about Trump’s renewed push to cut federal spending, overhaul grant programs, and extend the 2017 tax cuts. Drawing on lessons from history—specifically Ronald Reagan’s presidency and Calvin Coolidge’s economic philosophy—Shlaes offered both caution and encouragement for what lies ahead.
🏛️ The Department of Education: A Reagan-Era Goal Revisited
The interview opened with a throwback to 1980, when Reagan laid out his goal to eliminate the then-newly formed Department of Education. Shlaes noted that not only was Reagan correct in arguing that local control of schools yields better results, but that the department has ballooned from a $10 billion budget in 1980 to well over $200 billion today. Trump’s current desire to dismantle or downsize the agency is a long-overdue attempt to fulfill that decades-old promise.
“When money comes from far away, it’s usually not so perfectly directed,” Shlaes observed.
💸 Cutting Spending Isn’t Easy—But It’s Necessary
Shlaes, author of The Forgotten Man and Great Society, stressed that cutting government spending has always been politically difficult, even when Republicans are in control. She cited Reagan’s early struggles with a Democrat-controlled House and an economy still reeling from stagflation and recession. Even when taxes were cut, spending often stayed high due to bipartisan resistance and Cold War military needs.
“Reagan had a reason he didn’t cut some spending—defense,” she noted. “You’ll hear that again soon.”
Trump faces a similar challenge with high levels of military spending, internal resistance from big-spending Republicans, and legal challenges from federal judges seeking to block spending freezes.
📉 Tax Cuts: The Key to Growth and Revenue
Shlaes highlighted how supply-side economics worked during the Reagan era. Cutting the capital gains tax and reducing top marginal rates led to a boom in growth and federal revenue, despite early critics’ concerns.
“We got lots of money when we cut rates. And more important, we got lots of growth,” she said.
This underscores why Trump and congressional Republicans need to move quickly on extending the 2017 tax cuts, including corporate and individual rate reductions, and why Trump’s newer proposals—such as no taxes on tips or overtime pay—are smart political and economic strategies.
“I won’t mock that,” Shlaes said. “On the margin, it matters—and it reminds lower earners that they deserve what they earn.”
🏛️ Taming the Bureaucracy
Dan and Amity also discussed a recent legal strategy memo by attorney Chris Haer, suggesting that Trump could reshape federal grant programs by redefining “climate resiliency” or “foreign democracy promotion” to fit conservative goals—without needing new laws.
Agencies “forecast” grant priorities in advance—so a Trump administration could simply change the focus of those priorities, especially under vague legislative language like in the Inflation Reduction Act.
This highlights a creative path forward amid legal challenges: use the executive branch’s power to reframe, not just repeal.
🔔 Coolidge Wisdom in 2024
Shlaes, who chairs the Calvin Coolidge Presidential Foundation, ended with a quote from Silent Cal that feels more relevant than ever:
“Don’t expect to help the weak by pulling down the strong.” —Calvin Coolidge
That sentiment, Shlaes argued, should guide tax and economic policy moving forward. Envy-driven politics and class warfare may be politically useful for the Left, but they only hinder economic growth and national unity.
For more on Amity’s work, visit www.amityshlaes.com and explore the work of the Calvin Coolidge Presidential Foundation.