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Another controversial second-tier adviser is Stockman's chief economist, Lawrence Kudlow. Until last year, Kudlow was chief economist for the Wall Street investment firm Bear Stearns & Co. In a city of towering political egos, Kudlow's stands visible to all. Recently he told colleagues of being "besieged with offers of help and money" to run for the U.S. Senate from New York. Last week he hinted broadly that he had turned down an offer to replace Jordan on the Council of Eco nomic Advisers, saying that his current position is more powerful. Says a top Treasury official of Kudlow: "The gall of the man is beyond belief. Last fall he pushed behind the scenes for higher taxes as hard as he could. Then when he lost, he tried to take credit with Congress for blocking approval."
No matter how bloody the back-room scrapping, there seems very little prospect of a radical shift in policy between now and congressional elections in November. Says Weidenbaum: "Whatever will happen to the economy by then is already in the system. Anything we do now would have its effect after the election." Ob serves Assistant Secretary of the Treasury W. Dennis Thomas: "Historically, fresh ideas on the eve of an election are usually the cause of long-term problems. Carter had three different economic policies in a single year, 1980, and the only person who benefited was Ronald Reagan."
There are signs, though, that once congressional elections are over, the President may move more forcefully than ever to cut spending. Administration budget cutters are already eyeing a big potential slice out of Social Security benefits, as well as sharp new reductions in other transfer programs such as food stamps, Medicare and Medicaid. There is even White House talk of defense spending cuts if necessary.
The goal is to hold the fiscal 1984 deficit to no more than $50 billion, vs. current Administration projections of at least $150 billion. Says one top White House policymaker: "Reagan is the only politician who has a chance to cut entitlements and get spending back on the same track with revenues. The public is overwhelmingly behind more budget cuts, but it is going to be bloody."
Public confidence is essential for any economic policy, especially for the President's tough budget-cutting program. Yet, for now, the many abrupt departures and the often loud public bickering are undermining that kind of confidence and giving the impression of an Administration at war with itself.
— By Christopher Byron. Reported by David Beckwith/ Washington