Stockman's right

Give me a Congress with the guts to cut spending. Give me a line-item veto. Give me a balanced-budget amendment. I already have the Grace Commission blueprint for cutting government to size.''

That's the gist of what Washington expects to hear from President Reagan in coming days, as he converts the capital's deep agitation over the deficit into political thrust for his reelection campaign.

No matter that his budget director, David Stockman, has gone public again, this time in a Fortune magazine interview, saying the hard core of government spending has about been reached. ''Now we have to figure out how to pay our bills,'' Mr. Stockman says, shorthand for coming down on the side of a tax increase. Stockman thus agrees with Martin Feldstein, Reagan's chief economist. Mr. Feldstein warns that the administration's new budget forecast, of 4 percent economic growth through 1989, would be too rosy without action on the deficit.

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Mr. Reagan's budget, to be sent to Congress Feb. 1, is already labeled a ''do nothing'' document in Washington. After three years of pruning outlays, the logical next step would be to adjust tax or fiscal policy to shrink the $200 billion yearly deficits that stretch ahead through the decade. Despite the internal White House debate, Mr. Reagan says no to tax concessions this year.

Mr. Stockman lets out no secret when he says, ''The problem is that this democracy is somewhat ambivalent about what it wants. It wants low taxes and substantial public spending.'' The public by 3 to 1 agrees with Reagan in opposing a tax increase to cut the federal budget deficit, the ABC News/Washington Post poll reports. Nearly 2 in 3 citizens, however, disagree with Reagan's plan to cut social programs to cope with the deficit.

Stockman's admissions on budget cutting may cause some discomfort around the White House. But the President makes policy. And Mr. Reagan is choosing to run on the wider political margin, against tax increases - at least for this year.

True, this would be more consistent with his first term's emphasis on the three-year tax cut as a stimulus to recovery and growth. And if it helps Reagan get reelected, this could be a significant long-run economic benefit from deferring tax action, his partisans say. A second term could focus on ''tax reform'' as a vehicle for revenue increases.

The gains from acting faster have not, unfortunately, been made clear enough. The arguments include:

1. Whatever the economic negatives from not acting, they can only be greater later. If the economy slows, as anticipated, it will be a less-favorable environment for tax increases or spending cuts than exists now while recovery is still brisk.

2. Another year of inaction means another year's interest burden added to the deficit. Interest was running between 6 and 8 percent of total federal outlays from 1960 to the late 1970s. Last year's interest was nearly 11 percent. By 1989 it could be 15 percent. That's an extraordinary prospect. The taxpayer dollar will be going more and more for things the taxpayer doesn't care about. If 93 percent of his dollar had been going for services like defense or income redistribution before Reagan, his dollar would buy only 85 percent at the end of Reagan's second term. That means the price of government would be going up.

3. Some responsible economists warn of circumstances under which the budget could ''explode'' - with the cost in interest rising faster than the country's economic growth could offset. The heavy dependence on inflows of foreign capital , now helping finance the United States expansion, carries a risk. The inflow augments domestic savings and keeps interest rates from rising higher. The inflow could dry up suddenly, such as from fears of changes in US monetary policy, shocking the US economy and driving upward the consumer price index.

If Mr. Reagan runs again and is reelected, even internally in a second administration there would be heavy pressure to ease back on defense spending. Since President Carter, several years of 4 and 5 percent real increases in defense spending have produced a very high base that will require an enormous tax increase to finance. Medicare and farm programs also offer a margin for cuts.

The economic case calls for action now. Unless Washington moves on the deficit early in the spring, it's over until after the conventions - and the next inauguration.

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