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On March 30, 1981, only 69 days into his first term, Reagan, his press secretary James Brady, Washington police officer Thomas Delahanty, and Secret Service agent Timothy McCarthy were shot from would-be assassin John Hinckley, Jr. outside the Washington Hilton Hotel. Going into surgery, Reagan quipped with his surgeons "I hope you're all Republicans." Reagan recovered and was released from the hospital on April 11, becoming the first serving U.S. President to survive being shot in an assassination attempt.
A few months later, federal air traffic controllers went on strike, violating a regulation prohibiting government unions from striking. Reagan held a press conference in which he declared the situation to be an emergency and stated that if the air traffic controllers "do not report for work within 48 hours, they have forfeited their jobs and will be terminated." Despite contrary advice from some members of his cabinet over a potential political backlash, on August 5, Reagan fired 11,345 striking air traffic controllers who had ignored his order to return to work.
During his predecessor's last year in office, inflation averaged 12.5% (compared to 4.4% during Reagan's last year in office) and interest rates on mortgages went over 21%. During Reagan's time in office, the unemployment rate declined from 7.1% to 5.5%, hitting annual rate highs of 9.7% (1982) and 9.6% (1983) and averaging 7.5%. Reagan implemented policies based on supply-side economics and sought to stimulate the economy with large, across-the-board tax cuts. Reagan believed in the economic theories of Arthur Laffer, Journalists called his economic policies "Reaganomics." His critics note that during his term there were large increases in federal budget deficits and the national debt. His policy of "peace through strength" (also described as "firm but fair") resulted in a record peacetime defense buildup including a 40% real increase in defense spending between 1981 and 1985. During Reagan's presidency, federal income tax rates were lowered significantly with the signing of the bipartisan Economic Recovery Tax Act of 1981 which lowered the top marginal tax bracket from 70% to 50% and the lowest bracket from 14% to 11%. Real gross domestic product (GDP) growth recovered strongly after the early 1980s recession ended in 1982, and grew during his eight years in office at an annual rate of 3.85% per year.
American peacekeeping forces in Beirut were attacked on October 23, 1983. The Beirut barracks bombing resulted in the deaths of 241 American servicemen and the wounding of more than 60 others by a suicide truck bomber. Reagan called the attack "despicable,"and on February 7, 1984 (27 years ago today), Reagan ordered the Marines to begin withdrawal from Lebanon.
On October 25, 1983, only two days later, Reagan ordered U.S. forces to invade Grenada, code named Operation Urgent Fury, where a 1979 coup d'état had established an independent non-aligned Marxist-Leninist government. A formal appeal from the Organization of Eastern Caribbean States (OECS) led to the intervention of U.S. forces; President Reagan also cited an allegedly regional threat posed by a Soviet-Cuban military build-up in the Caribbean and concern for the safety of several hundred American medical students at St. George's University as adequate reasons to invade. Several days of fighting commenced, resulting in a U.S. victory, with 19 American fatalities and 116 wounded American soldiers.
Reagan escalated the Cold War, accelerating a reversal from the policy of détente. He ordered a massive buildup of the United States Armed Forces and revived prodiuction of a number of weapons programs. He denounced the Soviet Union and in a famous address on March 8, 1983, Reagan called the Soviet Union "an evil empire".After Soviet fighters downed Korean Air Lines Flight 007 near Moneron Island on September 1, 1983, carrying 269 people including U.S. congressman from Georgia Larry McDonald, Reagan labeled the act a "massacre" and suspended all Soviet passenger air service to the United States. He dropped several agreements being negotiated with the Soviets, wounding them financially. Under a policy that came to be known as the Reagan Doctrine, Reagan and his administration also provided overt and covert aid to anti-communist resistance movements in Africa, Asia and Latin America. Reagan deployed the CIA's Special Activities Division to Afghanistan and Pakistan. They were instrumental in training, equipping and leading Mujaheddin forces against the Soviet Red Army.
In March 1983, Reagan introduced the Strategic Defense Initiative (SDI), a defense project that would have used ground and space-based systems to protect the United States from attack by strategic nuclear ballistic missiles. Reagan believed that this defense shield could make nuclear war impossible. The Soviets became concerned about the possible effects SDI would have. Critics labeled Reagan's foreign policies as aggressive, imperialistic, and chided them as "warmongering."
The American public must have given Reagan passing grades for his first term. He was re-elected in a landslide, winning 49 of 50 states, besting his opponent in the electoral college 525 to 13, and received almost 59% of the popular vote.