Beyond Reagan's big speech: a political chain-reaction
President Reagan's budget speech kicks off what could be the biggest political struggle of recent times and a test of the capacity of America's divided government to carry through a complicated and massive economic maneuver.Skip to next paragraph
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In a similar effort dealing with a single subject -- energy -- President Carter asked a Democratic Congress to accept a program as the "moral equivalent of war." He asked in vain.
Now Mr. Reagan asks a divided Congress to accept cuts in scores of favorite programs for which the congressmen see themselves as guardians. Precedent would indicate a first wave of support followed by a period of coalition-opposition that might delay action for months or years.
Everybody agrees something must be done. The nation is living beyond its means and is suffering from inflation, recession, and high interest rates. The popular, newlyelected President offers a two-part solution: slash the budget and simultaneously cut taxes for spur productivity.
Initial reaction to the plan by an anxious public has been favorable. But the public is in favor of general cuts, not the cut that affects the federal project in its neighborhood or the curtailment of a federal program that touches its own pocketbook.
The Reagan plan for tax cuts also has aroused controversy among traditional economists. Reagan has called for across-the- board income tax cuts, along with cuts in business taxes.
Some supporters of the so-called "Kemp- Roth" tax reduction plan say the Reagan proposal, while a positive step, does not do enough for higher-income taxpayers.
For 200 years the White House has proposed budgets, and Congress has reconstituted them. This system can be contrasted with the cabinet system in other industrialized democracies -- where the party in power proposes and carries through its budget or is voted out.
By a combination of events, the American executive now is trying to make an abrupt shift in economic policy and to push the legislative branch to go along with it.
A gigantic battle by various special-interest groups seems to be shaping up, and veteran observers are almost certain that the President can't get his way.
Reagan, fully aware of the problem, promised not to injure the poor in his budget cuts and publicly eliminated the "sacred seven" from his slashes, including medicare and veterans' disability. These affect 80 million people and involve $210 billion -- or 25 percent -- of the budget.
By one estimate, Reagan plans to boost military spending by $32 billion this year to a total of around $220 billion. But can he make his $40 billion to $50 billion slashes out of what remains, a balance of perhaps $300 billion? And where will the money come from for the proposed tax cuts?
Murray L. Weidenbaum, chairman of the Council of Economic Advisers, has uttered the personal hope that the budget can be balanced by 1984. He had earlier guessed 1983.
The administration has readied a propaganda blitz that will be one of the greatest in modern times. Cabinet economists will go on radio and television to promote the plan. Business and tax reform groups are expected to join. Then the administration will move from the public to Congress.
What happens thereafter can't be guessed, but almost certainly a series of coalitions will form. There will be lengthy committee hearings as new alliances are created. That is the normal congressional weapon against abrupt White House initiatives for economic change -- delay.
Reagan is about to give an economic and public relations spectacular in his speech. The results that fo llow may be unprecedented.