The Reagan Years: An Assessment; CUTTING RED TAPE
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Reagan administration critics quickly point out that, while the supply-side Reaganauts zealously attacked federal subsidy of America's poor, they did not apply the same standard of ''spending for the truly needy'' to other sectors of the economy. Farm subsidies, for instance, have skyrocketed under Reagan. They rose from $4 billion in fiscal 1981 to $21 billion in 1983 because of the payment-in-kind program.Skip to next paragraph
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Equally significant to analysts has been the administration's reluctance to grapple with basic tax reform. Reagan's dramatic tax cuts changed the marginal rates for a population of taxpayers that was constantly being pushed into higher income-tax brackets because of inflation. But, while most economists believe some tax relief was necessary, the greatest benefits went to the rich. The antiquated, complex structure of tax subsidies or ''tax expenditures'' - the amounts Washington does not collect because of exemptions and deductions for all kinds of spending - remains unchanged. These are estimated to reduce revenue by about $160 billion a year.
As they confront the colossal budget deficits, in fact, Reagan's aides are beginning to consider some fundamental reforms, such as eliminating tax deductions for mortgage interest on second homes. This would require a monumental political breakthrough, however. Although Americans say they want more cost-minded government, they do not want to give up their own subsidies and benefits. The administration, for its part, has adamantly refused to slow the dramatic rate of increase in military spending - a move even conservative Republicans advocate in order to reduce the deficits.
On the regulatory front, the administration has chalked up some limited progress. It put into effect a comprehensive program of regulatory review, including a requirement for cost-benefit analyses. As a result, many onerous regulations have been modified or eliminated. The administration estimates that a review of about 120 sets of regulations will save $116 billion over 10 years.
''The process is now better and fairer,'' says C. Boyden Gray, who was counsel for Vice-President George Bush's Task Force on Regulatory Relief. ''There was a sense of frustration - from businessmen, universities, cities - of being besieged by government regulations and pleading for relief. One no longer senses the same urgency and panic about the intrusiveness of government.''
The administration has also accelerated the deregulation efforts of Presidents Ford and Carter, completing deregulation of the airlines and partial deregulation of trucking and rails. Banking deregulation, which took the straitjacket off the thrift institutions, is regarded by the administration as its most significant reform.
''That has resulted in more than $3 billion a year to consumers and created a lot of healthy competition in the service industry,'' Mr. Gray says.
However, as a result of pressures from Congress, consumer groups, the federal bureacracy, and even business groups that have already invested in complying with federal rules, the deregulation effort seems to have come to a halt. The regulatory task force was disbanded last August. Efforts to dismantle the Departments of Energy and Education have been abandoned. Air-pollution regulations remain largely in place, and with the Environmental Protection Agency just reemerging from a period of political turmoil there is little enthusiasm for pushing basic changes. The replacement of James G. Watt, the controversial secretary of the interior, has added to the caution on the environmental front.
Reagan, in short, has run into the political backlash that occurs whenever someone's ox is being gored. Every group wants less government or more efficient government but not at the expense of its own pet program.
''Reagan has removed a lot of petty annoyances for business and dropped its adversary stance,'' says Hank Cox, associate director for regulatory affairs of the US Chamber of Commerce. ''There is more politeness now and a feeling among business that government is on our side. But he has only put a lid on. He hasn't done anything that will last beyond his time in office.''