Reagan, back in executive saddle, applies spurs to Congress

Ronald Reagan's call for congressional action on his economic program propels the whole tortuous process toward a conclusion. The result should be partly -- but not necessarily wholly -- to the President's liking.

Lending high drama to the whole debate is the return of the President himself to the fray, less than a month after his wounding by a would-be assassin's bullet.

Buoyed by a wave of public support, Mr. Reagan is likely to get substantially what he wants in the way of reducing the growth of government spending in fiscal 1982.

This alone would be a major triumph from the White House point of view, signaling an end of the mushrooming growth of social programs that threaten to break the budget --

But the victory may be clouded.

The reason: Congress may still refuse to take what White House officials call a "leap of faith" to cut income taxes by 30 percent across-the-board over the next three years.

Thus, the seamless garment of the President's program may be rent, forcing him either to sign or veto a package that gives him only part of what he wants.

Aware of this dilemma, Reagan shaped his Tuesday night speech before a joint session of Congress to stress the unity of his package.

A "bipartisan approach" is required to satisfy the public's demand -- reflected in Reagan's election last November --for government action to revive the economy.

Bipartisanship, says the President, is the hallmark of the so-called Gramm-Latta 1982 budget proposal, named for its congressional sponsors and endorsed by Reagan.

This conservative measure, one of two budget proposals about to come before the House, hews closely to the budget approach fashioned by the President and David A. Stockman, his budget director.

Reagan takes sharp issue with a rival budget, prepared by Rep. James R. Jones (D) of Oklahoma, chairman of the House Budget Committee, and endorsed by Democratic liberals.

The Jones budget, says the President, embodies too much spending and the wrong kind of tax relief for "saving and working."

To prompt such investment, Reagan says, marginal tax rates -- which now drive taxpayers into higher brackets as inflation boosts their income -- must be cut, as his own plan provides.

Members of Congress, fresh from talks with voters in the 50 states during the Easter recess, need little reminding that the President's popularity is at an all-time high.

Congressional mail -- if it reflects what Speaker of the House Thomas P. (Tip) O'Neill Jr. (D) of Massachusetts says about his own --especially where spending cuts are concerned.

This leads some Democrats, including the speaker, to predict that the 1982 budget will end up about where Reagan wants it.

Democrats are well aware of a national consensus that government spending should be cut and that federal budgets should dry out their red ink and be written in the black.

But the same consensus, may experts insist, does not extend to the tax-cut proposals advanced by President Reagan, which he believes are essential if his whole economic approach is to work.

Large and guaranteed tax cuts, spread over three years, according to White House officials, will induce Americans to work harder and save more, partly because less of their hard-earned income will go to government.

Some highly respected economists -- including Federal Reserve Board chairman Paul A. Volcker, former Fed chief Arthur F. Burns, and Wall Street economist Henry Kaufman -- doubt this conclusion.

They foresee a fresh wave of consumer spending, fueled by tax cuts, flooding into an inflated economy and pushing prices higher. This, in turn, would impel the Fed to push up interest rates to slow down the economy and combat inflation.

The high drama of the President's appearance in the well of the House may obscure, for the moment, the fact that legisltive tussles still lie ahead -- especially over the three-year tax cut.

You've read  of  free articles. Subscribe to continue.
QR Code to Reagan, back in executive saddle, applies spurs to Congress
Read this article in
QR Code to Subscription page
Start your subscription today