Reagan economic program: tiny clouds on horizon
Washington — President Reagan's economic recovery program has so far resisted the efforts of congressional critics to sidetract it, or even revise it substantially. The budget cuts faced only token resistance, and congressional observers claim but a handful of Democratic defections are needed for the tax cuts, slightly modified, to win passage in the House of Representatives.
Dissent tends to be muted:
* Rep. JAmes Blanchard sounds like a man whose constituents are looking over his shoulder. Mr. Blanchard is a Democrat from Michigan's 18th District -- an area of diverse suburbs and volatile political preferences. Last November, he carried the district handily. So did Ronald Reagan. On his trips home, Blanchard has been careful to sound out his voters on the President's economic recovery program. "You know," he says, "I don't have a single constituent who thinks it contains any pain."
* Dr. Robert Eisner is guilty of being a Keynesian. A professor of economics at Northwestern University, he fidgets on a hot Washington morning while speaking to a seminar sponsored by the Conference Board, a business research and lobbying group. Then he takes a firm grip on the podium and apologizes to the executives before him for his liberal views on the administration's economic policies. "They want to cut taxes for the rich," he says with sudden bitterness , "and reduce expenditures for people with whom they don't identify."
* For the most part, the gray-suited men who make up the audience support the President's program. They form small conversational groups that move across the meeting room, heading for a reception. Asked to summarize his opinion of Reagan's policies, one man pauses. "They're shooting in the dark, aren't they?" He says.
Thus are symbolized three problems critics say the Reagan administration may eventually encounter:
1. The public has inflated expectations for how quickly and easily the economic recovery program will work. The country's political patience may wear thin if results are slow in coming. A recent newspaper cartoon featured an excited housewife on the phone, saying "Henry's in the den, waiting for depreciation to accelerate."
2. The average taxpayer still hasn't realized just how much the program benefits the rich, say critics. Behind this, they claim, is the administration's basic inability to understand the fact that people may remain poor through no fault of their own. As evidence, the critics cite David A. Stockman's recent statement on national TV that he didn't believe people were "entitled" to government services.
3. We're experimenting on the only economy we've got with unproved theories that contain internal contradictions.
President Reagan and his minions have emphasized that short-term political pressure won't divert them from their long- range plans. They expect public criticism to rise as the impact of budget cuts is felt.
Treasury Undersecretary Beryl Sprinkel and Council of Economic Advisers chairman Murray Weidenbaum predicted last week that the United States will have no real economic growth for at least two quarters.
Despite such cautions, some say the points listed above could cause Republicans real political trouble. The reason: America's much-vaunted conservative drift isn't ideological at all.
"Public support buys time," said public opinion firm head Daniel Yankelovich, speaking at a Conference Board meeting. "But it's an opportunity, not a mandate.What counts is not doctrine, but people's standard of living."
And the public may grow impatient while the administration trips over unforeseen variables.
A 1 percent rise in short-term interest rates can potentially cost the federal government $3.5 billion, according to Lawrence Kudlow, chief economist at the Office of Management and Budget. The unexpected spending hike could suck money out of the private credit markets, leaving less for new investment and economic growth.
Many economists say the Federal Reserve Board's money growth targets don't supply enough cash for growth, much les s the surge the administration is predicting.