[98]

Tariff and distribution debate
By mid-1841, the federal government faced a projected budget deficit of $11 million. Tyler recognized the need for higher tariffs, but wished to stay within the 20% rate created by the 1833 Compromise Tariff. He also supported a plan to distribute to the states any revenue from the sales of public land, as an emergency measure to manage the states' growing debt, even though this would cut federal revenue. The Whigs supported high protectionist tariffs and national funding of state infrastructure, and so there was enough overlap to forge a compromise. The Distribution Act of 1841 created a distribution program, with a ceiling on tariffs at 20%; a second bill increased tariffs to that figure on previously low-tax goods. Despite these measures, by March 1842 it had become clear that the federal government was still in dire fiscal straits.[100]

Whig cartoon depicting the effects of unemployment on a family that has Jackson's and Van Buren's portraits on the wall
The root of the trouble was an economic crisis—initiated by the Panic of 1837—that was entering its sixth year in 1842. 