US economy waits for next move from Reagan, Congress, or Fed; Why Reagan is determined to stick with his economic plan
Ronald Reagan remains fully convinced that, given just a little more time, the spending and tax cuts he put into place last year will take effect - and the American economy will rebound.
That, according to senior administration officials, is the reason the President is sticking so firmly to his controversial economic program--despite widespread criticism from Democrats, as well as some worried Republicans.
Mr. Reagan is also privately predicting a lift in the economy fairly soon, his aides say. Perhaps the upturn will be slight--a slight dip in interest rates , for example. But the President is said to be hopeful that the public and business community will interpret this as an indicator of better times ahead.
The President is, according to his aides, indeed troubled by the massive deficits projected in federal budgets over the next three years. But, these aides add, Mr. Reagan has concluded he has little choice but to live with such shortfalls. However, these advisers say, Mr. Reagan is convinced that his policies will bring about a balanced budget by 1985.
Reagan is said to be highly suspicious of the challenge to his budget being mounted by the Democrats. He is convinced, his aides continue, that the Democrats don't really want to compromise. Instead, he is said to be convinced they merely want to slow efforts to radically alter the shape--and limit the powers--of the federal goverment.
The President, according to his advisers, concedes that were he in his third or fourth year in office, he would be in deep political trouble on the economy. But the White House calculation is that the majority of Americans continue to be patient, and that they have accepted the argument that Reagan needs more time before his program can be expected to work.
Too, White House polling efforts are said to buttress Reagan's conviction that most Americans believe the previous Democratic administration started the economy into its current tailspin.
Reagan will, according to White House strategists, eventually give ground on the budget. But his concessions will be made to the GOP, not the Democratic leadership.
His political advisers say the President isn't inclined toward anything more than token defense cuts. He's said to still be resisting new federal taxes. But his advisers concede that he may accept some ''revenue enhancement'' measures that would increase federal income through sources other than direct taxation. Still, White House strategists say, the President won't hesitate to veto any measures with which he strongly disagrees.