A historic debate on economic theology
All we need to do is act, and the time for action is now," declared Ronald Reagan as he ended a triumphantly successful televised address to a joint session of Congress. And this week both the House and Senate will act. The first crucial votes that may well shape the most drastic turnabout in the Federal Government's economic policies since New Deal days will be taken on the floors of both chambers.
Almost certainly, the recuperating President will win much of what he seeks: a sharp curtailment of the Government's propensity to spend ever more. Yet whether Congress will Peter Sweeney also accept Reagan's bold, if risky, three-year cut in income tax rates for individuals remains in doubt. The outcome could vastly influence the nation's immediate economic future.
The historic debate centers on arcane fragments of economic theology: "supply-side" tax theory; conflicting projections of how specific cuts in tax rates will affect inflation; varied assessments of the impact of budget deficits on the cost of living; different interpretations of who is "truly needy." In an incredibly confusing numbers game, the competing players are juggling figures wildly. Their tables and projections are important — but more in political terms than economic ones. Even though the estimates seem as solid as quicksand, the two parties have similar destinations in mind, but want to arrive there by significantly different routes. The Democrats seek to protect more of their traditional social services, while the Republicans want deep cuts in these areas.
At issue this week are budget resolutions meant to set the broad outlines of economic policy, including spending lim its, tax revenues and budget deficits. None are legally binding on the Congress; they are meant mainly to impress the will of the majority on committees of the two houses that will later work out the many laws that must be enacted to produce a final economic package. Still, any consensus that develops this week could critically influence the legislation. That is why Ronald Reagan's first national address since a gunman's bullet missed his heart by a mere one inch was aptly timed.
The speech came at a moment when Reagan is still doing well with the public. An Associated Press-NBC News poll indicated that 66% consider his performance overall as good or excellent, a shade better than Jimmy Carter's rating at about the same time in 1977. But Reagan is only working half-days in the Oval Office. Perhaps as a result, the Administration's foreign policy is still in some disarray. Even before a politically weakened Alexander Haig flew off to a meeting of NATO foreign ministers in Rome, aides of the Secretary of State were trying to counter the impression that by its strong pro-Israel stance the Administration had given the Israelis the green light to attack Syrian positions in the danger-laden war in Lebanon.