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State of Union key Reagan test

President Reagan faces his biggest political challenge to date as he prepares for his State of the Union address tonight. The American people will be watching not only for any further explanations of the Iran-contra affair but for solid indications of where the President intends to take the country in his final two years in office. Not least of all, the address is expected to show whether the President has the stamina and determination to pursue a vigorous agenda at home and abroad and try to regain his political standing.

The President's close allies and even some Democratic observers maintain that he is far from out politically.

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``He will be a major political player and he has the opportunity to set the agenda,'' says Richard Wirthlin, Mr. Reagan's longtime poll taker. ``Having worked with him close to 20 years, I know he's at his best when he's under pressure and when people are underestimating his influence. The first test will be Tuesday.''

But it is not denied that the White House is besieged. The kidnapping of three more American hostages in Lebanon last week adds to the administration's frustrations and sharply points up the naivet'e and amateurism of those United States officials who clandestinely dealt with Iran and sought to ransom the hostages long held in captivity.

On the eve of the State of the Union message, the state of the Reagan presidency was a troubled one:

Polls show that most Americans, while they are paying less attention to the Iran-contra scandal and still give Reagan a high popularity rating, do not believe the President is doing all he can to bring to light the truth about the scandal.

Continuing revelations surrounding the Iran affair have left a trail of contradictory statements and cast a shadow on a number of administration officials. Secretary of State George Shultz, who remains untainted by the scandal, nonetheless is struggling to overcome his embarrassments at not having been able to control foreign policy. And a search is under way for a replacement for Central Intelligence Agency Director William Casey.

Even if there are no further damaging disclosures on the Iran-contra affair, many items on the President's own agenda - catastrophic-illness insurance, welfare reform, the Strategic Defense Initiative - are embroiled in dissension within the administration.

A feisty Democratic Congress is preparing to do battle with the President on the budget deficit, arms control, trade, and other issues.

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Some longtime Democratic analysts caution against prematurely writing off the President, however. They think it significant that, after two months, the case against the National Security Council officials is not growing.

``Investigative work is going on from all directions, but we have not enlarged the parameters of the case,'' says political analyst Horace Busby. ``There is no `deep throat' [as in the Watergate case], and no one is plea bargaining. That says we can pin it down mainly to [Lt. Col.] Oliver North and [former national-security adviser] John Poindexter. Even on the Hill there's not much expectation that Casey's role will ever become consequential. ... The Democrats don't have Reagan on the ropes.''

The Democrats, Mr. Busby suggests, have wrung about all the negatives they can out of the Iran-contra imbroglio and may have even sacrificed some opportunities from their November election victory by letting themselves be detoured.

``They won and have returned to power and who has thought about that in recent weeks?'' aks Busby. ``They have not, except for Jim Wright, come in with programs or concepts, and the '86 elections have faded away.''

Other experts also forecast that the Democrats and the American people will tire of the affair and government will get back to normal.

On the domestic front the issues of concern to Americans are jobs and the economy, and, given Reagan's refusal to attack the deficit problem through a tax increase, the focus will swing to Congress.

On the foreign policy front, the Iran-contra affair has greatly damaged US credibility and moral authority.

But in one critical area at least, the burgeoning trade deficit, the administration continues to display leadership as Treasury Secretary James Baker III seeks to negotiate foreign-exchange rates and keep the US dollar from falling too far.

The allies, for their part, are eager to see the White House recover from its present confusion and drift.

``The Iran thing isn't a big enough issue to undermine one's foreign policy for two years, and I don't think that will happen,'' says Charles Doran, a foreign policy analyst at Johns Hopkins University. ``And Reagan has one thing going for him - he wasn't doing it for himself but was trying in a naive way to get the hostages out. ... Foreign policy has been hurt because you pay a price for your domestic values.''

It is nonetheless widely agreed that the President must do something to convey that he assumes responsibility for the Iran affair and to show he is taking strong charge of his administration.

``To get minimal progress this year he needs to accept more responsibility, and he's doing extraordinarily little to do that,'' says presidential scholar Thomas E. Cronin. ``He sets the tone for his administration, he's the `example in chief.' Whatever things zealous aides were doing, they were conducting the policy he wanted.''

This week the President began to resume a more active schedule following recent surgery. Yesterday he appeared before the Tower Commission investigating the role of the National Security Council and today he is scheduled to meet with Republican leaders as well as deliver the State of the Union address.

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