Reagan outlines views on arms talk with Russians, protecting Gulf oil, slowing Israeli settlements; US public leery as Reagan treads new economic ground
Washington — President Reagan on Feb. 5 will address an American public hoping for leadership but skeptical that his economic approach can succeed against inflation.
Conditioned to economic fits and starts for the past decade -- austere controls that ground the economy down into recession, followed by expansionary tax cuts and more inflation -- Americans are leery that the old economic logic can now be turned upside down.
The President faces an enormous reeducation job.
"It's striking how much the orthodoxy of conservative economists of yesteryear -- if not their younger counterparts today -- has been accepted by the public," says opinion analyst Everett Ladd. "That orthodoxy held if you're running federal deficits, and deficits are inflationary, you don't cut taxes in the middle of it because it spurs more inflation."
Americans don't want tax cuts now -- though they likely would want them if they hadn't been conditioned by past presidents to make such sacrifices in inflationary times.
"The conventional assumption would be that it's popular to tell the country you're going to cut its taxes. Yet in point of fact, Reagan suffered and did not gain during the campaign from the promise to cut taxes," Mr. Ladd says.
The "supply side" economics -- arguing that tax cuts will pay for themselves in increased productivity and revenues -- advocated by the Reagan administration "is not popular, not understood," Ladd and other experts say.
Oddly, the tax cut part of the President's package is considered easier to sell on Capitol Hill, while the budget-balancing spending cuts are likely to cause any fighting. This is at odds with public priorities.
The public favors budget cuts, at least in principle. But it shows surprising ambivalence. When concrete budget-cut candidates are posed, it opposes them. This holds for liberals and conservatives.
"You take a profile of the spending preferences of conservatives and of liberals with the general public, and they look almost alike," Ladd says.
"If you go back well into 1980 and talk about the trade-off between holding down government spending and cutting taxes, almost without exception the spending-cut approach is much preferred to cutting taxes," says Reagan pollster Vincent Breglio.
"Measured progress against a well-defined goal may be enough to satisfy expectations," says Mr. Breglio. In any event, Reagan will stress in Thursday night's address how long it took for the US to get into its inflationary straits to seek a longer time frame for showing results from his policies.
The longing among Americans for leadership in dealing with economic problems appears to exceed expectations for results.
A Gallup survey finds 51 percent of its respondents think a package of tax cuts and budget restraints could help curb inflation. But slightly more -- 53 percent -- think Reagan won't be able to get it enacted.
The poll finds that only one respondent in four thinks Reagan can fulfill his campaign promise to reduce government spending, cut taxes, and balance the federal budget. A year from now, Americans expect inflation to be about where it is today.
Experts differ over whether low expectations for early results help or hurt the President. Some see them giving him more time.
Others, however, feel low public expectations may dampen Congress's urgency to act.
"I don't believe he can gain much by saying again Thursday, 'We can't do everything overnight, don't expect miracles,'" one pollster says. "If the Reagan wheels start to fall off, the people will be pretty quick to jump on him. They turned Carter out of office not because of hostages or anything else, but because the economy was in rotten shape and Carter hadn't done anything to fix it up."
How Reagan handles the struggles between budget-cutter David A. Stockman and powerful Cabinet figures such as Secretary of State Alexander M. Haig Jr. also could help determine public support and Congress's compliance.
"The battle between Stockman and Haig could be crucial," says Mervin Field, the California pollster who has closely followed Reagan's career. "It could help Reagan if he appears Solomonlike. But if one wins over the other, it could have a serious effect on the image of the team 'hitting the ground running.'"
The public has hopes for an assertion of leadership, if not expectations for results. In a recent Yankelovich, Skelly & White survey for Time magazine, two-thirds of the respondents expect Reagan to restore a good working relationship with Congress within a year.
But Mr. Reagan seems to bear the accumulated skepti cism of his predecessors over making inflation yield.