Ronald Reagon made some signifcant changes in his much-criticized economic plan yesterday in an effort to convince voters that it's possible, after all, to do everything he's proposing. But he still left some major question unanswered.
As Reagan delivered his economic speech in Chicago, advisers here distributed a sanitized version of his current economic proposals, showing that the numbers can add up in a way that at least is technically credible.
However, although the candidate's charts and tables finally add up, the Reagan package still lacks enough specifics and details that questions remain about whether, realistically, the plan can be achieved.
Moreover, Reagan's shift to a somewhat more modest business tax-cut plan leaves him proposing a smaller tax break for corporations that President Carter's modest program would provide. Business tax cuts are a major element in the GOP plan.
Among the key wrinkles in Reagan's offering yesterday:
Bowing to criticism that his business tax-cut plan was too expensive, he backed away from his earlier proposal for faster depreciation writeoffs and instead endorsed a rival bill by the Senate Finance Committee.
The move would slash the revenue loss to the Treasury from the Reagan plan over the next five fiscal years to a cumulative $74 billion, rather than the $102 billion that the earlier plan would have cost.
In response to demands for specifics on how much spending he would cut, he outlined a two-part proposal.
First, he endorsed a plan by former Nixon administration budget director Casper Weinberger to cut 2 percent from overall spending in fiscal 1981 and 1982 and 1 percent in each of the three following years -- simply by eleminating "fraud and waste" in current federal programs.
Second, Reagan said that if possible, he would increase those cutbacks to 3 percent in fiscal 1981, 6 percent in fiscal 1982, 8 percent in fiscal 1983 and 10 percent in fiscal 1984 and 1985. The
1981 cuts alone would total a sizable $19 billion.
He also sought to calm fears about the size of the increases he will propose in defense spending. He asserted that even with the extra increases he plans, the military budget for fiscal 1985 would not exceed $285 billion to $300 billion -- only slightly above the $270 billion now projected by Congress anyway.
Finally, he puts off plans for a balanced budget until fiscal 1983 -- two years after he previously had hoped to erase the deficit. He now calls for red-ink figures of $27 billion in fiscal 1981 and $21 billion in fiscal 1982.
In the broadcast sense, the new computations provided what Reagan's economic plan most lacked before -- a reasonably credible accounting of how he can cut taxed, increase defense spending and balance the budget all at once.
By scaling back the size of his business tax cuts, limiting his increases in military outlays and postponing balancing the budget, Reagan theoretically could finance all his goals simultaneously with only modest cuts in spending.
The documents show the federal budget would run a $93 billions surplus by fiscal 1985 if the more modest spending-cut program were adopted and a black-ink figure of $121 billion if Reagan achieved his more ambitious goals.
However, analysts also pointed out some shortcomings in the plan:
For all the candidate's assurances of huge budget surpluses in later years, experience shows such projections rarely come to pass. In 1976, Jimmy Carter predicted a $60 billion surplus that that never saw the light of day.
Reagan's assertion that he can slash $13 billion to $19 billion in spending in fiscal 1982 ignores problems of both timing and persuasion. Even if Reagan were elected, fiscal 1981 begins in just three weeks and will be one-third over before he would take office. That means he would have to slash even more sharply to achieve the same cut overall for the fiscal year.
There's also the question of how realistic it is to assume that Congress will go along with $13 billion to $19 billion in spending cuts.
Reagan aides insist publicly that he could make enough cuts on his own, without need for congressional approval, to meet his goal slashing 2 percent from overall spending levels each year.
But advisers concede privately that at least some of the 2 persent in cuts -- and most of the added cuts Reagan wants to make -- would require Congress' approval. Smaller cuts this session have snagged the lawmakers all year.
Charles E. Walker, the Reagan economic adviser who briefed reporters here yesterday, said the candidate will seek massive tax cuts even if Congress balks at cuttingg spending sharply -- without conditioning them to budget cuts. b
That still leaves Reagan open to the charge that enacting such large tax cuts without reducing spending as welll wourl exerbate inflation. (Previously, Republicans generally had linked any tax-cut plans to companion spending cuts.)
Reagan's decision to back the Senate Finance Committee's depreciation bill instead of the one he had supported previously actually leaves the GOP with a smaller tax break for business than Carter is proposing.
The $74 billion in business tax cuts that the Reagan plan would provided between now and fiscal 1985 compares with a cumulative $81.4 billion under Carter's new proposal, which includes other business tax breaks as well.
Finally, for all their more credible totals, the Reagan documents unveiled yesterday did not provide specifics on which programs the governor actually would cut.
Walker told reporters yesterday such cutback lists can be compiled only after an administration has taken office. But without more details on that -- and Reagan's defense-spending plans -- the numbers are only a guess.