President Reagan ends the year on a high note. Despite a series of political setbacks and fumbles during 1985, the President has managed to keep his two main objectives on track: tax reform at home and a more stable relationship with the Soviet Union abroad.
Problems await him on both fronts in 1986. It is unclear how the tax-overhaul package will be put together in the Republican-dominated Senate without alienating the Democrats. Reagan's budget for fiscal 1987, which calls for even deeper cuts in domestic programs, is sure to generate further battles with Congress.
``Next time around, no program will get a free ride,'' Reagan warned yesterday at a White House ceremony for the Gramm-Rudman-Hollings deficit bill, hinting at the confrontation to come.
As for superpower summitry, the White House must worry about what to do for an encore in the President's next meeting with Soviet leader Mikhail Gorbachev. The Geneva get-together in November renewed a dialogue and improved the atmospherics; it produced little by way of substantive agreements.
But for the moment the President, who turned on the heat to get a favorable House vote on tax reform, basks in another personal victory that keeps his basic agenda on course. ``Tax reform is alive and well and kicking,'' he remarked at the White House ceremony. ``What's that I heard about lame duckery?''
Political experts give the President credit for his ability to turn around a potential setback. By absorbing the earlier surprise defeat in the House on the tax bill and then pulling off a victory, he is seen to look even better.
Even signing the controversial Gramm-Rudman-Hol-lings bill has helped remove the deficit problem from public attention. Many economists and political analysts think the United States would have been better off if the President had taken the lead on the problem and worked with both political parties for a balanced package. In the short term, Gramm-Rudman may keep the deficit from worsening.
``It's procedural rather than substantive, but action has been taken and stalemate has been avoided,'' says political scientist Thomas Mann.
Next year, after a tax-reform bill emerges from the Senate, Reagan may be faced with having to find a way around the pledges he gave to House Republicans to secure their support for the measure. Among them was a promise to veto any bill that did not include a 35-percent top tax rate for individuals and a personal exemption of $2,000 for all.
Some political observers say the GOP turnaround in the House is due less to the personal persuasions of the President than to the Republican lawmakers' desire to find a way of not being blamed on the hustings for sinking tax reform by standing with big business.
``Tax reform is moving not because the public is storming the barricades for it,'' says congressional expert Norman Ornstein. ``It moves because of a negative impetus -- if you kill it, you get blamed.''
Throughout the year, the President has had trouble getting congressional backing for his programs, reflecting the growing independence of legislators in a second presidential term as well as personnel changes and problems at the White House. But in each case, Mr. Reagan has followed his customary practice of compromise to get half if not the entire loaf of whatever measure he espoused.
Thus, he salvaged his program for MX missiles and won humanitarian aid for the Nicaraguan rebels. He also forestalled tougher sanctions on South Africa and obtained repeal of the Clark Amendment, banning US aid to any faction in Angola.
With a successful summit in Geneva, Reagan helped put behind the negative image of White House management of foreign policy created by the controversial visit to Bitburg, West Germany. His popularity rating, in any case, has remained consistently high, giving him an edge in dealing with lawmakers.
While the President is expected to face growing resistance in Congress and may be forced to compromise more often, longtime political observers caution against the label ``lame duck.''
``I don't think that has any meaning,'' says election expert Richard Scammon. ``That goes on the theory that in the last two years the President loses power. But that's nonsense if he's a good political operative. Within the scope of the possible, Reagan has a very good record and has ridden the situation pretty successfully.''
Reagan insiders, for their part, are pleased with the presidential score card at year's end. They note that many people tend to discount Reagan because of his background as an actor and because he is not in the usual mold of politician. Yet, they say, the President always manages to land on top politically despite mistakes.
``Reagan is coming out better than he looked three months ago, and no president has been so popular this far into his term except Eisenhower,'' says presidential scholar Thomas Cronin. ``But there are problems he -- and society -- are neglecting. It's not all glow.''