Congress returns to another drama: economic debate

Once again Congress takes up the threads of its substantive debate with President Reagan over his economic program for the nation. Already Mr. Reagan has won two toehold victories in a mammoth White House effort to forge his tax and budget policies into law:

* At this writing, the full Republican-controlled Senate appears ready to approve fiscal 1982 budget cuts approximately equal to the $48.6 billion worth of reductions the White House seeks.

* Congress has approved, and Reagan from his hospital bed has signed into law , a bill stopping a scheduled increase in dairy price supports that would have boosted the retail cost of a gallon of milk by several cents.

Now the main action moves to the Democratic-controlled House, where the President's proposals, both budget and tax, are running into bumpier going.

Alice M. Rivlin, director of the Congressional Budget Office (CBO), cautions against getting bogged down in debate over the accuracy of the economic assumptions underlying the Reagan package.

"There is, indeed," she said in a telephone interview, "great uncertainty about the realism of the White House economic assumptions.

"But the important thing about the President's plan is its shift in priorities toward defense and away from domestic programs. That is what we should be arguing about."

Congress and the nation, in other words, should strive for consensus on where the government, through its spending and tax policies, should be leading the United States.

The CBO, in a recent study, concludes that Reagan's policies would increase the share of defense in the budget from 23.4 percent in 1980 to 33.2 percent in 1984.

"Defense spending," says the study, "would grow by an average of 17.1 percent annually between 1980 and 1984, while nondefense spending would be held to an increase of about 1 percent per year after 1981."

In real terms, taking account of inflation, says the CBO, nondefense spending actually would fall.

The brunt of cuts, therefore -- if the administration's goals are to be met -- have to come in nondefense areas, in many cases in social programs benefitting poor and disadvantaged Americans.

Is this what the American people want? This question underlies the developing debate over the direction in which Reagan would take the country.

Some experts, including CBO economists, believe that White House assumptions about how the economy will perform are overly optimistic and that even more drastic cuts would have to be made to balance the budget by 1984.

Beyond this, the White House has not yet specified exactly where some of its proposed spending cuts would be made, especially in years ahead.

Budget Director David A. Stockman, for example, says that another $29 billion worth of cuts must be made in fiscal 1983, followed by $44 billion more in 1984 -- the year the White House hopes to pull the budget out of red ink.

One of Reagan's top priorities is to reduce the annual growth rate of federal spending from the 13 percent average of the past few years to 6 percent.

Putting all this together, the spring timetable looks like this:

* The House Budget Committee has yet to mark up and send to the full House its spending recommendations for fiscal 1982.

Rep. James R. Jones (D) of Oklahoma, chairman of the Budget Committee, estimated in an interview that Reagan will get about "75 percent of what he proposes, and it could be higher."

Democrats in the House, however, may demand a somewhat different mix of spending priorities, with more money going to social programs than the White House wants.

* Once House and Senate have approved their versions of budget spending, a House-Senate conference will huddle to reconcile the differences. The result will go back to both houses for final vote.

Congressional appropriation committees, meanwhile, must work out how to allocate the money allotted to them within overall spending ceilings.

* Side by side with this ongoing budget process will be development of tax bills by both houses, with Democrats in the House indicating that Reagan will not get the 30 percent, three-year across-the -board personal income tax cuts he wants.