What Happened to the Federal Deficit During the Reagan Administration?

While Ronald Reagan was president of the United States, the federal deficit increased from 2.6 percent to 6 percent and then, by 1988, fell to 3.1 percent. Because of this, he is often credited with reducing the deficit.

For President Reagan to decrease the federal deficit, he had to employ unique tactics as he firmly believed in cutting taxes for individuals. Reagan passed bills and laws in order to make it tougher for people to evade taxes.

He closed tax loopholes and also reduced a number of different federal tax breaks. Most notably, President Reagan passed reform legislation for Social Security to require those that received higher amounts to pay taxes on a portion of the benefits that they received.