Share this story
Close X
Switch to Desktop Site

Reagan, Congress: on same economic wave length?

President Reagan's economic program, which he outlines this week to Congress, includes benefits and sacrifices. Congress almost certainly will grab the benefits, it is believed here, which involve sweeping tax cuts. The sacrifices are another matter.

These include sweeping reductions in federal programs that are supported by large voter groups. Can Mr. Reagan persuade Congress to go along? Can he go over the heads of Congress to the public at large, using his gifts as a communicator?

About these ads

Success in the next four years may depend on his ability to persuade a grudging Congress to trim the budget at a time of double-digit inflation when the real federal deficit, with all items included, is believed to surpass $70 billion.

Most economists believe that belt-tightening is necessary to end inflation. "For decades we have piled deficit upon deficit," Reagan said in his inaugural, "mortgaging our future and our children's future for the temporary convenience of the present."

A nation can't live beyond its means any more than a private family can, Reagan said, adding, "And let there be no misunderstanding. We are going to begin to act, beginning today."

But a president only proposes: Congress disposes. Congress spends money easier than it saves money. In the first few days of the Reagan administration decontrol of oil started the price of gasoline climbing at the pumps, and this has brought preliminary complaints. At the same time, the unofficial proposal of the new budget director, David A. Stockman, to slash foreign aid from $8 billion to $5.47 billion has brought opposition from the State Department and protests from other industrialized countries that are part of the international system of aiding third world nations.

Reagan must establish a new majority coalition in Congress, it is assumed, to implement this proposed budget austerity and to achieve a leaner, less comprehensive federal government. The Reagan team has done an efficient job of placating Congress so far, it is widely felt here.

The Reagan administration has advantages and disadvantages in dealing with Congress. Advantages

The nation is seriously alarmed over inflation and favorably inclined toward austerity -- in theory, at least. High prices contributed to President Carter's defeat. Reagan has the momentum of an electoral landslide and a Democratic Party that, although in control of one chamber of Congress, is pledged to assist in reasonable economic programs. Republicans, in turn, are elated in victory and eager to show that "smaller is better" in federal government. Disadvantages

About these ads

Reagan and the nation want stronger defenses, and this means pressure on the budget. Again, some conservative groups in the Regan-Republican coalition want immediate action on so- called social issues -- anti-abortion, school prayer, aid to private schools, and the like; this could prove divisive in the party. Also, it is agreed that Reagan has limited time; experience shows a new president loses momentum normally after the "honeymoon" period. He has, perhaps , a year or a year and a half; after that disputes grow harsher and more querulous as the 1982 midterm election approaches.

One factor isn't certain. Reagan has adopted "supply side" economics -- the belief that appropriate tax cutting will so stimulate the economy that federal revenues will automatically increase. But this theory hasn't proved itself yet in England, under conservative Prime Minister Margaret Thatcher, and is disputed by some moderates who advise Reagan.

The danger seen here is that Congress will whoop through the tax cuts and drag its h eels on the budget cuts.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.