Reagan's next test -- will his tax, spending plans work?

With a bold dash to beat Congress's midsummer August recess, President Reagan has won the legislative prize he sought. Wednesday's victory in the House for his three-year tax-cut plan capped an extraordinary week for the President and his party. It came in the wake of Senate passage of his tax bill and the agreement of House-Senate conferees on $ 37 billion in spending cuts.

Looking ahead with frustration and relief, the defeated Democrats see no more climactic issues on which to take a stand before next spring.

There will be a second budget reconciliation bill to vote on after Labor Day. Possibly, the administration then will have to pursue more budget cuts, as spending projections have already begun to climb above earlier Reagan administration forecasts. The cuts might not come easily. Foreign policy events could intrude. House and Senate conferees must narrow differences in their tax programs.

But the Reagan team craftily front-loaded their political agenda, husbanding the momentum and sense of mandate from last fall's election. They kept the agenda simple. They held to two economic issues, federal spending and taxes. They can skirt the troubling social issues like abortion and school prayer scheduled later.

The Democratic leadership contends President Reagan's Monday night appeal to the nation turned the tide against them.

Congressmen had not heard from so many constituents on a single issue before, they said.

"Devastating," said House Speaker Thomas P. (Tip) O'Neill Jr. of Massachusetts of the psychological impact of the President's address.

"It's his [Reagan's] economy now," said one Democratic strategist on the Hill. "If there are a million more unemployed in October, he'll have to deal with it. The voters want results, not heroes."

"You're really struck by Reagan's ability to capture public attention," says Thomas Mann, Congress expert and executive director of the American Political Science Association. "The Democrats put it together as well as they could. They allowed for the effects of the election.

"You have to be impressed by Reagan and his operation. He came at the Democrats at their best. If he pulls it off, it's a tremendous achievement."

The burden of proof for results now shifts squarely to the administration, Mr. Mann agrees.

"The House Democrats are not nearly so formidable as events themselves," he says. "Now reality obtrudes: Are Reagan's programs up to the needs of the economy?

"Reagan could win the symbolic victory in July 1981, but by 1981 or 1983 he could be in real trouble -- or maybe not. That will depend on whether the Republican programs are right or wrong. That's all the Democrats have going for them now."

Had they won or lost on the House floor on taxes July 29, the Republicans could have declared a substantive victory, so close were the two measures in details.

"This leaves the Democrats not in effective control of the House of Representatives," observes Rep. Donald Pease (D) of Ohio, a member of the tax-writing House Ways and Means Committee and former editor of the Oberlin News-Tribune.

"That's where we've actually been the last three months," Mr. Pease says. "We've been reluctant to admit it."

"On this tax bill, we really gave it our best shot," Pease says. "We put our smartest guy in there, Dan Rostenkowski.The Democratic caucus had been working hard.

"Now we've got to muddle through the rest of this session, pass the appropriations bill, and go home. After this don't see any other climactic legislation until next year."

The Democrats realistically concede they must wait for time and circumstance to revive their prospects.

Next spring, just as the 1982 political cycle starts, social security, budget deficits, and the need for another round of spending cuts could combine in the Democrat's favor.

"Social security is a genuinely good issue for us and a hazard for the President and Republicans," Pease says. "The Republicans will lose many votes in 1982 simply for having broached the prospect of social security cuts. The budget resolution requires $20 billion to $30 billion in further cuts next year, and $60 billion in further cuts by 1984. It's hard to conceive how the Republicans can manage those cuts without going after social security."

On the House tax fight, the Democrats saw their hoped-for share of uncommitted Democrats dwindle through the afternoon after the President's July 27 national address.

"They panicked," Pease says. "The calls came in from their districts the next morning. It astounds me how a politician can be stampeded by 100 phone calls, or by three or four. But they were.

"The President began his phone calling. It also astounds me they can sell votes for a helicopter ride, or some other blandishment. But they do.

"And finally, though the evidence isn't clear yet, the White House was in a position to make it worthwhile for congressmen to go along. It has administrative actions -- a sugar subsidy, a dam built -- it could offer that we couldn't."

The difference between a House Democratic tax victory and the President's would have been mainly procedural, says Robert C. Brown, executive vice-president of the Tax Foundation Inc., a tax policy research organization.

The President's version was closer to the Senate's version, so the House-Senate conference to iron differences will be shorter. "If the House Ways and Means bill passed, that would have been a milestone in itself," Mr. Brown says.

But politically, the President's win "means there isn't much anticipatable to interrupt his popularity to the end of the year," says John Sears, the highly regarded Republican strategist displaced as Reagan campaign manager last spring. "Next year, the effect of the budget cuts will be felt. But Reagan's reputation as someone who can whip the Cong ress into line goes unchallenged."

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