Key economic advisors of President-elect Ronald Reagan mostly agreed yesterday that the new administration would push quickly for large tax cuts, coupled with measures to slow the growth in federal spending.
This administration "is going to hit the ground running," commented one of Reagan's economic advisers who is on the list to be Treasury Secretary.
Ed Meese, a top Reagan aide, said the new president would have a tax program "ready to go" on Jan. 20, if the lame-duck Congress did not enact one in the post-election session. He and another Reagan adviser said they would be pleased if Congress did enact a tax bill soon, provided it followed Reagan's proposals. But other advisers thought it unlikely that the old Congress would move ahead with a tax bill.
A spokesman for House Ways and Means Committee Chairman Al Ullman (D-Ore.), who was defeated Tuesday, said Ullman remained opposed to a tax cut before the end of the year.
Earlier in the day, Meese said on a network television program that the budget was one of the first issues to be dealt with and that the new administration would hope to have proposals to reduce the fiscal 1981 federal budget, as well as 1982 fiscal year expenditures. William Simon, Treasury secretary in the Nixon administration and one of Reagan's economic advisers (although not in the inner circle), said the "most critical" goal was to reduce the growth in federal spending.
There was little doubt among Reagan advisers interviewed yesterday that the president-elect would stick to his proposal for a 10 percent across-the-board cut in personal tax rates next year, together with a commitment to reduce tax rates by a further 20 percent over later years.
The shape of Reagan's tax proposals for business is less clear, although all of the advisers interviewed yesterday agreed that these proposals would be aimed at stimulating investment and would include simpler and more generous depreciation allowances.
During the campaign, Reagan switched from supporting the 10-5-3 depreciation plan, which would lead to a massive simplification in depreciation allowances but would cost an estimated $60 billion by 1985, to one drawn up by the Senate finance committee, which would cost much less in later years. Something "in between" would probably be proposed by Reagan, a member of his economic policy group said yesterday.
The massive swing to the Republicans across the country and the switch in the Senate were viewed by several advisers as giving Reagan a better chance of winning congressional support for both his tax proposals and measures, as yet unspecified, to hold down spending.
During the campaign, Reagan said his support for the Kemp-Roth tax plan, which would cut tax rates by 10 percent a year over the next three years, represented a target, not a commitment. But yesterday Caspar Weinberger, a close Reagan adviser who is heading Reagan's spending-control effort, said there was "not much flexibility in the 10 percent across-the-board proposal" and there was no doubt the president-elect would like to make such cuts in each of the next three years.
Others suggested that Reagan might ask Congress to vote for a 30 percent total reduction in tax rates to be phased in over five rather than three years. Of those interviewed, only Prof. Paul McCracken of the University of Michigan, Reagan's top anti-inflation adviser, suggested Reagan might have to modify his tax proposals if, on taking office, it seemed that their enactment could swell the budget deficit and increase inflation.
Curbing spending growth in nondefense programs is high on the list of Reagan's economic priorities. But so far there have been no details from his team of advisers about how spending will be cut so that a reduced budget deficit can be reconciled with tax cuts and higher defense spending.
However, several of the advisers interviewed yesterday claimed that if the will in Congress and in the White House were there, it would be quite easy to curb spending growth.
"If Congress is willing to refrain from add-ons to the budget, then the . . . deficit would fall rather rapidly," one top adviser said. He added that Reagan may well be willing to use his veto to stop spending increases.
"It is the easiest thing in the world" to cut spending if the Congress and the chief executive want to, Weinberger remarked yesterday. Reagan's economic proposals have been attacked as unworkable and inflationary by President Carter and the present administration, who claimed that his sums did not add up.
A meeting of the Reagan economic policy study group, which may flesh out Reagan's economic program, is scheduled for Nov. 14. It will be chaired by George Shultz, who was unavailable for comment yesterday.