Many of us remember celebrating Abraham Lincoln's birth on February 12th and then, shortly after, George Washington's on February 22nd. How and why did those two holidays disappear and President's Day take their place? It's a convoluted story that started in the late 1960s when Illinois Senator Robert McClory proposed moving a bunch of federal holidays around to give American workers more three-day weekends. His plan was met with a lot of resistance from those states with specific attachments to the holidays. For instance, Virginia, where Washington was born would have preferred to continue celebrating its favorite holiday. Eventually, with support from the labor unions, McClory convinced lawmakers to pass the Uniform Monday Holiday Act which moved Washington's Birthday to the third Monday of February. Over time, thanks in part to retail marketers who capitalised on the three-day weekend by advertising "President's Day" sales, the public stopped thinking of the holiday as Washington's Birthday even though that is still the official, federal designation.
History.com has a great article on the transition from two holidays to one.