Pluses and minuses on the Reagan report card

By , Pat M. Holt, formerly chief of staff of the Senate Foreign Relations Committee, writes on foreign affairs from Washington.

It is time for President Reagan's midterm report card. His biggest plus is the reduction in the rate of inflation which is down from double digits to about 6.3 percent in 1982.

But this has been achieved at the cost of the worst recession in half a century and the highest unemployment since before World War II. Make unemployment the President's biggest minus.

Closely related is another big minus in the form of the federal budget. The deficit this year will likely be in the range of $180 billion to $200 billion, or more than the whole budget used to be not so very long ago. This is in an administration which got elected promising to balance the budget. (Let it be recalled that Franklin Roosevelt, an early Reagan hero, also campaigned in 1932 with promises to balance the budget.) The budget deficit threatens to undo the progress that has been made in reducing inflation and in bringing interest rates down.

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The budget has also been the instrument for a reallocation of resources. There has been a shift from social to military programs. This is a weak minus. Some shift perhaps was called for, but the Reagan administration has overdone it. One of the consequences is likely to be an intensification of the strains and distortions appearing in the society. There has not only been a shift to military programs. Within the civilian sector there has been a shift from poor to rich brought about by making the tax structure more regressive. Another minus.

In foreign affairs, the President gets pluses in the Middle East and Africa, minuses in Central America and Europe. The President's Middle East peace initiative put forward in September is a sensible attempt to solve the long-festering problem of the Palestinians by giving them some kind of autonomy with full security safeguards for Israel. It is too bad that Israeli Prime Minister Begin rejected the proposal so abruptly and categorically. It at least deserved further discussion, which it may yet get.

In Africa, the administration's diplomacy has been dominated by Namibia and the complicated efforts to arrange for that country's independence. These have not been successful, but they have been pursued with skill and determination, and progress has been made. The problem is the Cubans in neighboring Angola. The South Africans will not withdraw from Namibia until the Cubans are gone from Angola. The Cubans will not withdraw from Angola until the South Africans are gone from Namibia. Surely a way can be found out of this impasse.

In Central America, the administration found a bad situation and made it worse. Through the fault of both sides, relations between the United States and the revolutionary Sandinista government of Nicaragua have gotten steadily worse. On both sides, there have been actions designed to turn dire predictions into self-fulfilling prophecies. There are signs that the US is engaged in a classical covert action to overthrow the Sandinistas from Honduras. It was a similar covert action from Honduras that overthrew a radical government in Guatemala 30 years ago. Subsequent experience in Guatemala is not such as to inspire confidence about the results of a similar scenario against Nicaragua.

In El Salvador, the Reagan administration continues to invest substantial resources in what has so far been a futile effort to help the government win a civil war. There are not many grounds to hope that things will get better in 1983. The government has not been able to win with US support. Without that support, it might very well lose. Its successor might be as hard to get along with as the Sandinistas in Nicaragua. But the longer this is postponed, the worse it is likely to be.

In Europe, the administration has subjected the NATO alliance to unnecessary strains. It went to the brink of a trade war with France, West Germany, and Great Britain over trade with the Soviet Union. The US looked particularly bad in this affair because it was itself sending the Soviet Union great quantities of wheat at the same time that it was blacklisting European firms for sending machinery. The matter has since been patched up, but the US burned its fingers when it did not need to. And questions of US-European trade remain to bedevil the alliance.

Finally, the President gets an incomplete with respect to his policy toward the Soviet Union. Since this is the only country which can blow us up, handling relations with it is probably the most important thing any president does. Reagan started out as rather too confrontational, in the mode of the cold war of 30 years ago. He has given the KGB entirely too much credit for inventing the concerns that many Americans and Europeans have over the continuing proliferation of nuclear weapons. One can quibble over the specifics of his control proposals now the subject of negotiation in Geneva. But the important point is that the negotiations are going on. If this could be pulled off, it would make up for a great many shortcomings.

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