White House muffles Feldstein pessimism

The fresh breeze that Martin Feldstein brings to economic policymaking in the Reagan administration is blowing up a gale of concern among top White House aides.

Mr. Feldstein, the new chairman of the Council of Economic Advisers (CEA), has ruffled the President's political aides in two ways, according to well-informed sources:

* Feldstein's analysis of the economy is more pessimistic - or realistic, depending on the point of view - than the White House wants the public to hear, especially before the Nov. 2 elections.

* Feldstein's views appear to contradict those of the President, particularly the assertion by the CEA chief that ''extremists'' among supply-siders have been ''decisively proven wrong.''

''The real supply-side extremist left in the administration,'' said a well-placed source, ''sits in the Oval Office,'' meaning Mr. Reagan himself.

Treasury Secretary Donald T. Regan, trying to bridge the rhetorical gap between the President and Feldstein, says they belong to the same economic faith but that Reagan is ''high church'' and Feldstein ''low church.''

Personalities aside, said an inside source, a no-win situation may be developing both for Feldstein - whose economic reputation is at stake - and for the White House.

Reagan aides are doing their best to deflect public attention from current economic conditions, including the September unemployment figures which come out Oct. 8.

A string of statistics showing that the economy remains in the doldrums and that unemployment is climbing is not what the White House wants voters to concentrate on when they go to the polls.

Any significant loss of congressional seats to the Democrats would make it much harder for President Reagan to stick to his economic course during the end of his term.

To that end, top presidential assistants have told Feldstein that he must weigh political considerations when he speaks out.

How this will work out is unclear. Feldstein, a Harvard professor and president of the National Bureau of Economic Research, has a national reputation for objective analysis.

He brought with him to Washington a crew of super-bright, young academic economists, who presumably would object to muffling their views or twisting them to conform to White House directives.

Budget and economic documents flowing out of the Reagan White House consistently have been called too optimistic by outside experts. Events have proven them to be so, except where inflation is concerned. Inflation has dropped faster and farther than almost any analyst expected.

Murray Weidenbaum resigned as the President's first CEA chief, partly because he was unable to inject more economic realism into administration forecasts.

That may be the problem Feldstein will face, based on the initial interaction between him and White House officials concerned with Republican fortunes in 1982 and the President's program thereafter.

A real test will come after the elections, when the President's 1984 budget is whipped into final shape for presentation to Congress in January. At the same time Feldstein's shop will produce the annual economic report of the President, detailing where the economy stands and where it is likely to go.

Feldstein is on record as expecting a slower economic recovery in 1983 than the 4.4 percent growth rate which was the administration's last published forecast. Treasury Secretary Donald T. Regan indicates that this forecast may be pared down early next year.

To be credible, the 1984 budget and the President's economic report must derive from similar economic assumptions. Mr. Reagan's earlier budgets have been based on supply-side expectations which did not work out and which Feldstein has criticized.