Ronald Reagan is entering the closing weeks of the 1980 presidential campaign with some unexpected frustrations in trying to deal with the economic issue.
By all standards, the GOP presidential candidate ought to be having an easy time pillorying President Carter on his handling of the economy:
The nation has just gone through a brief, but deep recession -- with the jobless rate still hovering at 7.5 percent. (Here in Flint, it's 20.7 percent, the highest in the nation.)
Inflation still is running at a 9-to-11 percent "underlying rate," after hitting a staggering 18.2 percent annual rate earlier this year.
And Carter's own performance has been marked by four years of seeming indecision on the economic issue and frequent policy flip-flops.
When the president took office in 1977, the inflation rate was 4.8 percent. And the jobless rate was about where it is now.
But while Reagan is drawing cheers enough when he criticizes Carter's record, it's difficult to say precisely how well his own economic proposals actually are going over with voters.
Although the Californian's advisers assert confidently the pocketbook issue is the most effective one they have on which to attack Carter this year, they're finding it somewhat less potent than they expected on two counts:
First, with the recession far milder and shorter than forcast except for the auto and housing industries, and inflation down somewhat from last spring, the economic issue isn't as sharply defined as some reaganites had hoped.
Many Americans haven't been that hard-hit at all.
Second, as Reagan staffers now concede, a good many voters are unenthusiastic or outright opposed to a big tax cut, such as the one Reagan is proposing, since they fear that it would bring them little relief but might refuel inflation.
As a result, the GOP candidate has had to repackage his massive tax-cut proposal -- intended as the centerpiece of his 1980 economic program -- relegating it to part of an "overall plan" that includes spending cuts as well. And he often finds himself on the defensive about the plan.
"We always lead with spending now and then talk about the overall economic package," says a key Reagan political aide with experience in the tax field. "The polls show when you put the two together, the tax cut has bite."
Still, the fact that Reagan's tax-cut plan remains suspect in the eyes of many voters has taken some of the edge off what otherwise might be an easy shot at Carter on the economy. And sometimes it has left Reagan on the defensive.
"I didn't just create this for a speech in a campaign," Reagan feels compelled to assure audiences on the campaign trail. "We have been working for weeks with some of the finest economists, They have agreed that it is practical and workable."
Reagan's basic economic program actually hasn't changed much since the primaries. The Californian has reshuffled a few elements to soften some more radical aspects of his program, but the overall thrust remains the same.
In a nutshell, Reagan is offering voters a far larger income-tax cut than Carter would provide, a much steeper boost in defense spending, and -- through a variety of proposals -- less government involvement in the overall economy.
His argument is that providing a better climate for new investment would eventually improve productivity and help slow inflation, while spurring more production and bringing the unemployment rate down.
The mainstay of the Reagan package still is an across-the-board 10 percent personal income-tax cut for individuals next year -- followed by similar cuts in 1982 and 1983 -- combined with faster depreciation writeoffs for business.
The candidate also has added a proposal to trim 2 percent in "waste" from the projected increase in federal spending in fiscal 1981 and 1982 -- a hefty $13 billion this year alone -- plus 1 percent cuts in each of the next three years.
Reagan also is pledging to boost defense spending sharply (including a major hike in military pay levels), freeze the hiring of civilian employes by the armed services, rid the government of unnecessary regulations and balance the budget by fiscal 1983.
His energy program is simple: Speed up the decontrol of oil prices that Carter began last year and repeal the newly enacted crude-oil tax "as soon as feasbile" -- moves he says will heighten both conservation and production.
And Reagan still is endoring a spate of smaller, but costly tax-cuts, from gradual repeal of estate and gift taxes (which he says hurt the farmer) to tuition tax credits and a tax exemption for income from savings accounts.
Reagan has, however, moderated some of his earlier stands, in an effort to bring them into line with more traditional thinking. A task force of old-line Republican economists worked for weeks to smooth his proposals out.
In the months since last spring, the former California governor has repackaged his tax-cut plan to emphasize only the cuts for 1981, (though Reagan insists he's still committed to those in 1982-83, too).
Reagan also has trimmed back his earlier plan for faster depreciation writeoffs for business -- endorsing a far less costly Democratic compromise drafted by the Senate Finance Committee.
The GOP candidate no longer contends that he can slash personal income taxes sharply, as he plans, without at least initially widening the federal budget deficit.
And he has tempered his previous plan for a tuition tax credit, excluding tax relief for parents of parochial school youngsters -- and reducing the total cost of the measure to less than half the original $4.5 billion.
But the most dramatic changes have come as part of the candidate's effort to woo blue-collar votes -- a decision that now appears to be meeting with some success.
Gone are the Reagan pledges to abolish the Occupational Safety and Health Administration, repeal the Davis-Bacon Act and extend antitrust enforcement to unions as well as corporations.
In their place is a new Ronald Reagan who dons union jackets at campaign rallies and -- reminding listeners of his stint as head of the Screen Actors' Guild -- boasts he's the only former union president in the 1980 race.
Aides say Reagan now wants to "reform" OSHA -- though they won't say precisely how -- and to "tighten the administration" of the Davis-Bacon Act rather than actually repealing it.
Reagan also has softened some of his more ideological statements of primary days -- the kind that warmed the cockles of right-wing hearts but made potential cross-over voters nervous.
For example, he's dropped his opposition to the Chrysler and New York City bailouts, scrapped an earlier vow to repeal the crude oil tax immediately and seldom mentions his plan to transfer federal welfare programs to the states.
Finally -- predictably, perhaps -- the Californian appears to have shelved his earlier group of economic advisers, headed by University of Southern California professor Arthur Laffer, and turned to more traditional GOP economists for aid.
But Reagan continues to hold firm to at least some of his earlier positions. For example, he still wants to abolish the Energy and Education departments. And he would end Carter's voluntary wage-price guidelines.
And Reagan still has a single villain on whom to blame inflation: "We have inflation," he asserts repeatedly, "because the government has been living too well."
Martin Anderson, Reagan's current domestic issues chief, insists the candidate hasn't actually shifted positions at all but is "constantly changing emphasis" to meet new developments and voter concerns.
"As the presidency has gotten closer, there've been instances where we've gone from saying 'Here's what's wrong about this' to saying 'Here's what we can do about this,'" Anderson says. "But we haven't really changed."
To be sure, Reagan still is encountering some problems on his domestic stands, despite his recent modifications:
For one thing, the GOP candidate still hasn't convinced many experts that his tax-reduction plan wouldn't be inflationary. Reagan advisers have cleared up their figures somewhat, but key questions remain.
For example, Reagan's new numbers don't fully add up unless you use unusually high estimates of inflation. Reagan says inflation wouldn't be that high if he got in, but he depends on those figures to justify his plan.
Although Reagan has sought to disarm the inflation critics by proposing a 2 percent offsetting spending cut as well, he hasn't specified what programs he would pare -- leaving serious doubts about how much he really could achieve. h
Reagan's reluctance is obviously for political reasons: One key adviser jokes that the candidate will unveil his spending cuts "one day after the election." But critics are skeptical that Congress will trim even 2 percent. e
Unless it does, there's practically no way a hypothetical President Reagan coujld cut taxes, boost defense spending and balance the budget, as the Californian is proposing.
And Reagan's total tax-cut program -- including secondary proposals like the tuition tax credit -- still would cost the Treasury a massive $268 billion a year by 1985 -- compared with $116.6 billion for the president's plan.
Like Carter, Reagan has no real short-term program for combating inflation. Both reject the "hard choices" many economists say the nation must make and instead rely on long-range tax incentives expected to have only scant impact.
Reagan still has not provided specifics on his agricultural policy: "He's dropped an earlier call for cutting farm subsidies but won't say what he'd do instead. His program for reviving the auto industry also is vague.
At the same time, Reagan has made his own share of gaffes:
In pointing out how sharply the nation's tax burden would rise under Carter's program, Reagan uses projections that totally ignore the tax cuts the president has proposed for 1981 -- and assume Carter won't trim taxes later.
In fact, although the president's plan eschews the reductions for individuals that Reagan is proposing, the two are very similar in size. Reagan's would ease taxes by $38.9 billion in 1981, Carter's by $27.6 billion.
As part of his effort here in Flint to paint Carter as a factor in the auto industry's problems, Reagan charged that the new "gas-guzzler" tax Carter signed is adding $200 to $500 to car prices -- cutting into sales.
Although Reagan aides insisted later they talked with a Cadillac dealer who was collecting it, government tax experts say the guzzler levy is so mild it's only affecting the Maserati and two other expensive European cars. No U.S.-made autos are involved they say.
There's no doubt Reagan has become far more skillful than he was during the primary at making the economic case against the president. Back last spring, he seemed directionless. Today, his attack is more focused and better honed.
The GOP candidate is adeptly painting Carter as a man who's brought about high unemployment, rampant inflation, a burgeoning tax burden and a decline in Americans' standard of living.
Both here and in less hard-hit regions across the country, Reagan isn't sparing the ammunition when it comes to the economic issue:
The fact that inflation has pushed taxpayers into higher brackets, he contends, means Carter "has already imposed . . . the highest single tax increase in our nation's history.
The speedup in inflation -- from 4.8 percent when Carter was running in 1976 to a 12.7 percent annual rate now -- has blkunted living standards so that "the average weekly income now buys 8.5 percent less than when he took office."
The credit controls Carter imposed last March 14, Reagan charges, "drove interest rates on new car loans to more than 15 percent and greatly intensified the economic distress of the auto industry."
The GOP candidate may have been helped some by last week's report that inflation, as measured by the rise in consumer prices now is back to a 12.7 percent annual rate. Other recent statistics have tended to benefit Carter.
Nevertheless, the impact of the conomic issue still is open to some question. Reagan staffers insist it's cutting, but obviously not as potently as they would like.
Meanwhile, Reagan is taking the final days of the 1980 campaign to try to push the pocketbook issue to the forefront in voters' minds. His TV speech Friday night was an example. The coming debates will provide another forum.