Ronald Reagan’s 1980 presidential campaign rested on two promises: revitalizing the American economy and rebuilding the U.S. military. By August 1981, Reagan’s Office of Management and Budget director, David Stockman, concluded that the president’s priorities were fundamentally at odds. Stockman believed that Reagan would have to pare back rebuilding his defense program to achieve an economic recovery.
As Reagan’s team gathered in the cabinet room to review options, Stockman warned of a coming “crash landing on the budget.” He said they were “facing potential deficit numbers so big that they could wreck the president’s entire economic program.” The OMB director’s first priority was realizing a balanced budget, and he suggested reducing defense-budget growth to save the economic program. Reagan responded: “There must be no perception by anyone in the world that we are backing down an inch on the defense buildup. When I was asked during the campaign about what I would do if it came down to a choice between defense and deficits, I always said national security had to come first, and the people applauded every time.”
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