After Mr. Reagan's Address

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Tuesday, April 28, 2009; 6:53 PM

[Editor's note: This editorial was originally published on April 30, 1981.]

THE REMARKABLE thing about Mr. Reagan's presidency has been his ability to keep it forcused single-mindedly on his economic stratey. To be sure, there's been an element of luck in it. No distracting blowups have come along abroard, or serious political diversions at home. But it's the intensity of his purpose, as much as the extraordinary personal circumstances surrounding his address to Congress on Tuesday evening, that explains the surge of support that he is currently enjoying.

Suppose that the administration wins the budget resolution for which it is now pressing hard in the House. What exactly would that mean? It is the beginning of the annual budget process, not the end of it. The resolution sets, in broad outline, the figures that are supposed to guide the committees as they proceed with the actual authorizations and appropriations over the summer. The cooperation of the various committees is not guaranteed. That message was telegraphed earlier in the week when the Senate Agriculture Committee adamantly voted to bust the Reagan budget by a very large margin in behalf of its favorite charity, the dairy lobby.

The resolution will not set detailed spending limits for each program, but only impose guidelines for broad categories of programs. You would be right to conclude that the House's vote on this resolution does not settle the fate of the embattled social programs that some of the Democrats are struggling to rescue. The precise distribution of the reductions and eliminations is left to the months ahead.

This aspect of the resolution has special significance for the looming tax issue. With the curious inversion of the Republican and Democratic positions, it is now the Republicans who want the big tax cut and the Democrats who defend the smaller one. The budget resolution only sets a limit to the size of the cut, which means that the administration's favored version of the resolution would also permit the smaller Democratic tax bill. The conservatives of both parties will have spending mainly in mind when they cast that resounding vote on the resolution. But when they have to think specifically about taxes, in votes several weeks from now, the same conservatives may decide to switch sides and support the smaller deficit.

President Reagan clearly had that possibility in mind when he spoke to Congress. He has already seen the depth of the doubts evoked within his own party by the large deficit that he has projected for 1982. In response, he argued, accurately enough, that it is something of a misnomer to speak of a tax cut. More precisely, it will be no more than a cut in the tax increase inevitably and automatically imposed by inflation. Mr. Reagan chided the Democrats for wanting to leave the tax rates too high. The Democrats will reply that Mr. Reagan wants to leave the deficit too high.

On the degree to which they are willing to squeeze down spending over the year ahead, the two parties are in astonishingly close agreement. The result is that fiscal policy for 1982 now depends on the votes, beginning next month, on taxes and the deficit.


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