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Actually they did not control Congress in the 80s. The Senate, which did have Republican control, has Constitutional limits on what is originated in the Senate. Much spending was reined in, however, in order to bring the government under control. But, as you say, it is the states.
I understand that, but a lot of credit today is given to Ronald Reagan for what he was able to do. The fact that he did it without the House was because he had a friend in Tip O'Neil.