Will 'reality' bring Reagan's policies closer to Carter's?
Washington — "You'll be surprised," said a senior White House official, "how quickly Ronald Reagan will come around to Jimmy Carter's positions, once he faces reality."
This official defined reality as the narrowness of the range of options open to a president, because many major issues are shaped by forces beyond his control.
An early sign of a similar Carter-Reagan approach is the latter's assurance to Israel and Egypt that he will base part of his Middle East policy on the Camp David agreement forged under the mediation of Mr. Carter.
As for the Persian Gulf, Mr. Reagan's policy -- like Mr. Carter's -- will be shaped in its early stages by the duration and consequences of the war between Iraq and Iran.
The bottom line of both Reagan and Carter policy is that a continued flow of oil from the Gulf is vital to the United States and the rest of the free world.
Reagan is expected to pay close attention to ties between the United States and Saudi Arabia, No. 1 supplier of foreign oil to Americans.
Without the cooperation of the Saudis, Reagan, again like Carter, would lose much of his leverage in the Gulf.
Fallout from the Iraqi-Iranian conflict will influence both the supply and price of oil, with the 13-member Organization of Petroleum Exporting Countries playing a definitive role.
Some OPEC leaders, including Saudi Oil Minister Ahmed Zaki Yamani, are urging their cartel coleagues not to raise the price of crude until the world's supply and demand picture is clarified.
To lessen US dependence on OPEC oil, Carter already has taken the major step of progressively removing price controls from domestic petroleum, a process due to be completed by Sept. 30, 1981.
Reagan could speed up that process. By so doing, however, he would instantly add several cents a gallon to the price of gasoline and home heating oil at a time when inflation generally is on the upswing.
This fact, among others, impelled Carter to decide on progressive, rather than instant, oil-price decontrol.
Where the federal budget is concerned, inflation restricts Reagan from departing very far from the Carter approach, many experts here believe.
"Until inflationary expectations subside," said a top Carter aide, "interest rates are not going to go down." High interest rates increase the amount of money the US Treasury must spend to finance budget deficits.
Current interest rates are ballooning interest payments on the national debt above the nine cents out of every budget dollar anticipated under earlier calculations.
Oher costs rise, too, because of circumstances beyond Reagan's control.
Transfer payments, such as social security, are indexed to the consumer price index and will grow next year. The list lengthens of American workers who lose their jobs because of imports and become eligible for retraining and other financial support.
Summed up, inflation makes it harder for Reagan to trim the federal budget as deeply as he proposes, especially since he plans to raise defense outlays.
Some experts believe all this may cause Reagan to revamp his tax-cut program, to give more emphasis to business incentives and less, at least at first, to individual income tax cuts.