Reagan officials hope for brisk start on agenda
They call it the ''window of opportunity.'' That is the critical period of about six to eight months that President Reagan, fresh from an electoral triumph, will have to push his second-term agenda before congressional resistance slows him down.Skip to next paragraph
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Gearing up to take advantage of that window, administration officials say they hope for a brisk start in three principal areas:
* Reform of the tax system. The Treasury Department is completing study of a tax-simplification plan and will report to the President by the end of December.
* Spending cuts to reduce further the rate of growth of government and help close the huge budget deficit. Such cuts are are expected to be targeted at medicare, federal retirement benefits, farm price supports, business subsidies, student aid, and other programs that escaped the axe in the first term.
* Launching new negotiations with the Soviet Union to achieve a nuclear arms reduction agreement.
Pressures to move quickly do not stem only from the fact that 1986 election politics will get in the way of legislative compromise as time moves on. There also is rising concern about the United States economy as well as the superpower nuclear buildup.
Many economists forecast a further economic slowdown in 1985 and possibly the onset of a recession. That would make it even more difficult to get a grip on the budget deficits.
''What worries me is that 1983 and 1984 were the ideal times to make big spending cuts,'' says Murray L. Weidenbaum, former economic adviser to the President. ''In 1985 and 1986, with the economy slowing down, it is not as likely a time for big spending cuts. And that means, come the next recession, the deficits will hit $300 billion.''
Adding to the concern is the worsening US trade deficit. The Commerce Department reported last week that the merchandise trade deficit for the third quarter of 1984 reached more than $33 billion. This works out to a trade deficit for the year of more than $113 billion - twice as high as last year's.
Unless the US reduces its budget deficit and gradually brings down interest rates, the dollar will continue to be overvalued relative to other world currencies, with the result that foreign investment and goods will continue to flow into the US. Economists warn that growing domestic pressures for protectionist measures will grow and in the long run damage the US capacity to export.
While the President, during the campaign, preached the supply-side economic view that sustained economic growth would generate the revenue needed to reduce the tide of red ink, many administration officials says they believe a frontal attack on the deficit, including a tax increase, is crucial.
But with the Democrats still in control of the House of Representatives and Republican strength in the Senate slightly reduced, the President may have a difficult time pushing through his proposals, whatever they are.
However, as the President this week begins considering the budget for fiscal year 1986, there are indications that the administration may seek a bipartisan consensus on the budget. This would require meetings between Reagan and congressional leaders before the beginning of the year.
Reform of the complicated, cumbersome tax code is a logical area for bipartisan compromise. The Congress already is considering so-called ''flat tax'' proposals, and Treasury Secretary Donald T. Regan also is talking about a ''modified flat tax,'' in which many deductions and exemptions would be eliminated and tax rates reduced.
One reason for the administration to try to move quickly on reform is that it is certain to invite vigorous opposition from special interests fighting to preserve their tax privileges.
The President insists that any tax-code revision not produce any more or less revenue than now.
But congressional Democrats are suspicious that Reagan will use tax reform to hide a tax increase. They will be determined, therefore, to make certain any tax-increase bill has the presidential label on it.
On the nuclear arms question, there is some talk in the administration about appointing a special envoy to oversee an array of arms negotiations. The President in his recent press conference denied that any conflicts existed in his administration over arms policy.
But most analysts believe the known intense squabbling between the Defense and State Departments during Reagan's first term has contributed as much as any other factor to lack of progress in arms control. Unless the President cuts through the bureaucratic divisions and becomes more personally involved in the arms policymaking process, a breakthrough is unlikely, arms experts say.
Even if US-Soviet talks get under way during the early part of the new Reagan term, achieving an agreement may prove difficult, in the opinion of many analysts. Both superpowers are poised for development and deployment of a new generation of weapons.
The Soviets are planning for new types of land-based and submarine-based missiles, as well as a new strategic bomber and strategic cruise missiles.