For Reagan, '87 was a grueling year. Arms control offers chance to recoup losses

The White House wears a tired but cautiously triumphant smile as the new year is ushered in. What started out as a grim state of affairs for Ronald Reagan at the beginning of 1987 ended on a note of creditable achievement. ``We had nowhere to go but up,'' said a senior presidential aide after the recent successful superpower summit.

It is hard to imagine a rockier year for President Reagan - from the Iran-contra scandal and the Wall Street market collapse to a drag-out battle with Congress over nomination of a Supreme Court justice. Add, too, the personal and health problems of Nancy Reagan, who plays an important role in her husband's political as well as personal well-being.

``It's not been a great year,'' the First Lady told the Associated Press. ``It's been the lowest I think you can get.''

When January 1987 rolled in, it looked as if the presidency was beginning to unravel. In the wake of the Iran-contra revelations, Mr. Reagan was under widespread attack for his detachment from policymaking and management and for letting the executive branch run amok. His job-approval rating had dropped by almost one-third before inching back up to about the 50 percent mark.

Today the President is enjoying something of a political comeback because of the successful summit. The latest polls show his job-approval rating running between 56 and 62 percent. That is better than the standing of many previous presidents in the final year of their administrations.

``In terms of Reagan's capacity to function within Congress and the Washington community in order to govern, it was a particularly bad year,'' comments Everett C. Ladd, executive director of the Roper Center for Public Opinion Research. ``But in terms of public support, I don't see it as particularly bad.''

While the Iran-contra affair dominated much of the year, Reagan took his big lump on the scandal when the Tower Commission report came out in February. Its conclusions were devastating: Reagan in effect conducted an arms-for-American hostages policy in his covert arms dealings with Iran, directly violating official US policy. He was described as ignorant of facts and detached from the policy process. Aides and subordinates were criticized for failing to engage the President and disregarding the National Security Council process as well as various laws.

Political damage control began with a reorganization of the White House. With the encouragement of Mrs. Reagan, the President replaced White House chief of staff Donald Regan with former Sen. Howard Baker Jr., and Frank Carlucci, an experienced Washington insider, replaced John Poindexter as national-security adviser. The new team set out to rescue the beleaguered presidency.

Reagan himself addressed the nation, telling the American people he accepted responsibility for the affair. But he refused to disavow the arms initiative as wrong from the outset. And in a press conference in March he continued to maintain that he knew nothing about the diversion of arms profits to the Nicaraguan contras.

``They just didn't tell me what was going on,'' he commented later about his aides.

Public tunes out Iran-contra

Although the majority of Americans did not believe him, according to polls, the public began to weary of the story. By the time special House and Senate committees finished joint hearings on Iran-contra in the summer, the worst had passed and there was no further decline in the President's popularity. The 427-page majority report issued by the congressional committees in November described a disdain for the law in the executive branch and a presidential effort to conceal aspects of the scandal. But the public, having long previously come to its harsh verdict, seemed not to take much notice.

``You seldom read the book after you've seen the movie,'' comments Charles Jones of the University of Virginia of the public's mild reaction.

But the general perception of a diminished and faltering presidency persisted throughout much of the year. The President's loss of influence was apparent at the economic summit in Venice in June, where little progress was made on key financial issues and where the US failed to win strong support from its allies for its policy of reflagging Kuwaiti vessels in the Persian Gulf. Western officials privately described Reagan as disengaged, leaving most of the talking to his aides.

As the President went out on the road in the summer, promoting an ``Economic Bill of Rights'' and calling again for such old and controversial reforms as a balanced-budget amendment and line-item veto, it was clear the administration was running out of steam, unable to come up with anything but relatively minor domestic initiatives.

Bork and Ginsburg

The battle with the Senate over Judge Robert Bork in the fall reflected the growing assertion of a Democratically controlled Congress and was symptomatic of continuing ideological divisions and pressures within the administration. The President seemed to be all thumbs handling the issue, nominating a controversial conservative to begin with and then, after being turned down on Mr. Bork, nominating Judge Douglas Ginsburg - who quickly withdrew when his previous use of marijuana came to light. In the end Reagan picked Judge Anthony M. Kennedy, a consensus candidate.

``The Bork defeat was the result of institutional weakening,'' says Stephen Hess of the Brookings Institution. ``The Ginsburg affair was a self-inflicted wound.''

Reagan sustained other defeats at the hands of Congress as well. The Democrats overrode his vetoes of the clean-water and highway bills and placed constraints on his arms control policies. Reluctantly, the President also ended up signing legislation extending authority for independent counsels to prosecute wrongdoing in government (even while his attorney general, Edwin Meese III, was under investigation for possible improprieties).

Reagan was also forced to accept tax increases.

The sudden collapse of the stock market on Oct. 19 sharply brought into focus what many analysts see as the dangers of the nation's huge budget deficit. Yet the President's initial reaction seemed one of unconcern. ``I don't think anyone should panic, because all the economic indicators are solid,'' he remarked.

But even though Reagan had long vowed he would never raise taxes, Treasury Secretary James Baker III and other high aides finally pushed him into negotiating a deficit-reduction package with Congress that included some new taxes. The negotiations went down to the wire and resulted in agreement to trim the deficit by $76 million over two years - a figure that stretched to $79 billion by the time the omnibus spending and tax bills were signed.

The package fell short of the kind of strong signal many economists felt was needed to reassure the world financial community. But it marked a welcome degree of cooperation between the executive and legislative branches and seemed to presage a more conciliatory White House approach in 1988.

It was Reagan's third summit get-together with Soviet leader Mikhail Gorbachev, however, that gave his presidency a much-needed lift. The agreement signed by the two leaders on reducing intermediate-range nuclear weapons has wide support in the United States and abroad, and, despite the shrill voices of opposition to it on the far right, the accord is expected to be ratified by the Senate - which would make it the first nuclear-arms control agreement to be approved since 1973.

Planning for next summit

As 1988 begins, the White House already is planning for the sequel to the Reagan-Gorbachev summit in Washington. The President's scheduled visit to Moscow in late spring will again spotlight his successful effort to put US-Soviet relations on a constructive path. If the two leaders succeed in reaching a strategic-arms reduction agreement (which is still far from certain), Reagan stands to provide the upcoming Republican presidential nominee with good campaign ammunition and to leave office with a historic foreign-policy achievement in hand.

It cannot ruled out that, if such a scenario came to pass, Ronald Reagan and Mikhail Gorbachev might share a Nobel Peace Prize.

White House aides dare not indulge publicly in such speculation. In fact they are consciously playing down Moscow summitry in an effort to keep public expectations low. ``The worst thing we could do is build up a sense of euphoria,'' says a ranking official.

Looking ahead, the White House knows that the President's ability to hold his present standing will depend as much on the domestic economy as foreign policy. Despite the budget and trade deficits and the stock market gyrations, the year 1987 turned out reasonably good in terms of continued growth, job creation, and relatively low inflation. But the markets remain volatile and the public is voicing uncertainty and concern.

Trying to finish strongly

Keeping the economy from sliding into a recession will be a top White House priority in '88. The President will also continue his efforts to coax out of Congress an omnibus trade bill that is not protectionist and that will foster a freer global market in which American exports can compete effectively.

On the diplomatic front, Reagan will confront such prickly issues as Central America, where this year his own peace initiative was overtaken by a Central American peace plan. A showdown with Congress over US aid to the Nicaraguan contras is expected in February, after the Central American presidents meet to declare whether or not their regional peace agreement has been carried out.

Persisting tensions in the Gulf and the eruptions of Arab protests in Israel, Gaza, and the West Bank will keep the Middle East on the foreign-policy agenda.

On the face of it, the Reagan administration is winding down and '88 election politics will increasingly intrude on the President's ability to accomplish much in his final year in office. But, depending on how sure-footedly he performs, he still has opportunity to extract a major success or two.

``I could see a reasonably good concluding year if the administration sticks to its central approaches and handle things well and the economy doesn't produce something unsettling,'' says Dr. Ladd.

Last in series. Other articles appeared Dec. 21, 22, 23, 24, 28, 29, and 30.

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