Reagan budget-cutters battle 'iron Triangle'

President Reagan, entering his third and cricial week, is already finding out how hard it is to budge "the iron triangle" in Washington. The triangle, consisting of the administrators, recipients, and lawmakers who enact federal programs, forms a formidable lobby to keep spending levels where they are.

Ironically, the first major public warning volley came at week's end from within the President's own Cabinet. Secretary of State Alexander M. Haig Jr. led a storm of protests directed at Reagan budget chief David Stockman's proposal to cut foreign aid by $2.6 billion in fiscal 1982. Congress and foreign spokesmen joined the outcry.

Other Cabinet officers likewise say they are poised to pounce at budget-cutting incursions into their territory. Their authority and the shape of future policy are being pitted against the Reagan administration's budget- cutting goals.

The new administration finds itself crowded by time. The President's schedule has been heavily taken up with Cabinet sessions and courtesy talks with congressional leaders.

This Thursday, Feb. 5, he is expected to address the nation in broad terms on the economy. By Feb. 16, agencies must get their new budgets to the printers. On. Feb. 18, according to one scenario, Mr. Reagan would deliver his State of the Union address. Then details of the budget would be released over the following weekend.

This in effect packs into one month all the staffing, planning, and haggling for a fullscale domestic program that most administrations don't reach for a year or two.

While giving Reagan good marks for the genial style of his first press conference last week, many Washington observers thought it was too early for him to go before the public. He held off answering many questions, especially on the economy, until his Cabinet reviews them.

"He shouldn't have held a press conference after nine days in office," one White House expert says, "on the obvious grounds that the administration would not have made policies in all the areas he would be asked about."

Reagan's "strong statements on Russia," another White House communications specialists says, likewise reflected an inexperience that would cause more serious official problems for Washington if uttered a year from now.

Meanwhile, Reagan is pressed to barter over his budget cuts with his Cabinet chiefs this week, convince the public it should accept the cuts, and resolve the nagging doubts among many economists over whether his programs will work.

Reagan must shore up public support for his plans. Americans apparently approve of the administration's desire to balance the budget and reduce federal spending. But more than half (55 percent) oppose cuts in high-cost social programs such as health, education, and housing aid, against only one- third (36 percent) who favor the cuts, according to a Yankelovich, Skelly & White survey.

The conservative mandate attributed to the 1980 election seems to shrink with passing weeks. By Inauguration Day, nearly two- thirds (63 percent) of the public saw the election as chiefly a rejection of Jimmy Carter, and only 1 in 4 (24 percent) thinks it a mandate for conservative policies. Still more favor rather than oppose wage and price controls, loathed by Reagan and his advisers.

Also troubling Reagan's innder circle during the countdown toward an economic package are doubts among professional economists.

Data Resources Inc. (DRI), the Lexington, Mass., economic forecasting firm, sees a $100 billion deficit looming in fiscal 1983 -- the year the Reagan administration hoped to balance the budget -- if it proceeds with its three- year, 10-percent-a-year tax cut for individuals.

Such projections are prompting the administration to work over its package like putty.

"The debate involves the period of time, not whether you go for the whole hog of the Kemp-Roth 30 percent tax reduction," says Rudolf Penner, budget analyst for the American Enterprise Institute, the Washington think tank heavily raided by the Reagan team for staff and talent.

The period could be stretched out to 3 1/2 years, or even four, with the starting date much in doubt. "Those debates are not fully resolved yet," Mr. Penner says. "I personally wouldn't count on any money in my pocket from a tax cut before Oct. 1 -- and quite conceivably it could be Jan. 1, 1982, before we saw it in effect."

Carey Leahey, DRI fiscal policy expert, anticipates a tax cut pared to something like 10 percent the first year and 5 percent the next two years to avoid huge deficits.

Early Reagan calculations assumed nondefense standing in real terms would fall about 3 percent from 1980 to 1985, Mr. Leahey says. And Reagan advisers assumed real economic growth for the next four years of between 4 and 5 percent a year. Both assumptions seem far too optimist ic. Leahey says.

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