To a large extent, the scope of the nation's economic policy over the next two years will be defined by the outcome of about 60 House elections and a handful of Senate contests.
President Reagan was able to shape economic policy during the 97th Congress in large part because his election coincided with the revival of the conservative coalition in the House of Representatives, an alliance of Southern Democrats and Republicans.
Over the past six months, this coalition has shown growing signs of weakness, culminating in the Sept. 9 override of President Reagan's veto of a $14 billion supplemental appropriation bill.
In addition, the president has been forced to backtrack from his adamant supply-side approach and to support a major tax increase that needed strong backing from liberal Democrats to win approval.
The key House and Senate races -- those where the outcome is in doubt -- will determine for a number of Republicans and some conservative Democrats whether loyalty to the president's economic program is an elective liability.
On the other side of the coin, the election will determine for some Democratic opponents of the administration whether their posture makes them vulnerable to a challenge from the right.
The potential consequences of a Democratic pickup of 15 seats is reflected in the following votes: On June 25, 1981, President Reagan won two critical votes on his budget resolution, the Gramm-Latta bill, by margins of eight and seven votes. After repeated defeats on 1982 budget proposals, the administration finally won approval of a budget resolution on June 10 by a margin of 13 votes.
By most estimates, Republican and Democratic, a 15-seat pickup is a reasonable, if not conservative, projection. Since every Democratic gain is a Republican loss, such a shift, if the newly elected Democrats are loyal to their own party leadership and not to the Republican president, translates into a 30-vote gain for opponents of the president.
Taking this a step further, a gain of 15 or more Democratic seats in the House would raise the strong prospect of the House assuming a posture of confrontation with the president paralleling the experience of Republican and Democratic administrations during the last decade.
Conversely, if Republican losses are held to 10 or fewer seats, it would be viewed as a major victory for the president. This would not assure continued administration control of Congress in the fashion of 1981, but it would significantly lessen the prospect of a Congress in revolt against what has been the most conservative administration in the past 50 years.
Over the two years of the 97th Congress, which will come to a formal close in December, the strength of Reagan's conservative coalition has steadily deteriorated, although the president has continued to dominate the debate.
In addition, unless there were a massive repudiation of GOP candidates, a prospect few observers of the process are predicting, there is little or no likelihood that the 98th Congress will reverse many of the trends set in motion by the Reagan administration. While the increase in defense spending may be slowed, few expect it to be stopped. The drive to balance the budget may continue to shift towards more tax increases, but the pressure to cut domestic social spending programs will remain.
Democrats, in turn, have demonstrated major difficulties developing their own agenda. Even if the "national" wing of the Democratic Party under the leadership of House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) and Majority Leader Jim Wright (D-Tex.) regains full, instead of nominal, control of the House, it is almost impossible for a majority in one wing of Congress to develop a coherent economic program, particularly when the presidency is held by the opposition party.
In attempting to analyze the prospects for the economic shape of Congress in 1983, there are the following key blocks:
* The hard core of the president's conservative Democratic supporters -- the Boll Weevils--are generally in safe seats. Two, however, have already been defeated in primaries, Reps. Ron Mottl (D-Ohio) and James Santini (D-Nev.), the latter in a bid for the Nevada Democratic Senate nomination. In addition, two others are in serious trouble, facing strong challenges in Democratic runoff contests, Reps. Bill Chappell (D-Fla.)and Billy Lee Evans (D-Ga.)
One of the most prominent supporters, Rep. Eugene Atkinson, who not only backed the president but switched from the Democratic Party to the GOP, faces a tough fight to retain his Pennsylvania seat. Support for the Reagan administration from the Boll Weevil block also has been hurt by complaints from farmers that the prices they have been getting have declined sharply over the past two years.
* In political terms, the single block of legislators facing the toughest battles in November is the House Republican freshman class. At least 26 of the GOP freshmen, many of whom were elected in 1980 by narrow margins with the aid of Reagan's coattails, face serious Democratic challenges.
In 1981, these freshmen played a key role, not only backing the president in the budget and tax votes, but also by leading the partisan charge for strong Republican loyalty.
This drive for support of the president resulted in a level of GOP unanimity unheard of in recent years. In key votes in 1981 and 1982, Republicans voted for the president's proposals by margins of 190 to 0, 190 to 1, 188 to 1 and 186 to 3. It was this loyalty, more than the defections of the Boll Weevil Democrats, that made Reagan's victories possible.
Many of the freshmen Republicans facing hard battles in November are in Frost Belt urban districts or in troubled farm areas of the Midwest. Towards the end of the current session of Congress, a number of them have defected from the administration on difficult votes. Their success or failure in November will, however, be widely viewed as a test of the political consequences of supporting the Reagan administration's economic program.
* Along very similar lines, a scattering of more senior Republican legislators from beleaguered areas, including House Minority Leader Robert Michel (R-Ill.), face strong challenges.
Along with the GOP freshmen, their success or failure also will be a test of the ability of the northern wing of the GOP to survive policies that have resulted in a strong reduction in programs beneficial to urban areas, and a general shift of federal resources away from the Frost Belt to the Sun Belt.
In contrast to the House, and in contrast to the 1980 elections, the Senate contests do not appear to be as significant barometers of partisan and ideological trends.
As in 1980, there is a disproportionate number of incumbent Democrats up for reelection, 19, compared to the number of Republican incumbents, 11. But the Democratic incumbents do not include a crop of vulnerable liberal lightning rods similar to those defeated in 1980, including John Culver (D-Iowa), Birch Bayh (D-Ind.), Frank Church (D-Idaho), and George S. McGovern (D-S.D.).
* In the House, there are about 25 Democratic incumbents facing GOP challenges, far fewer than in 1980. In addition, in 1980 many of the Democrats were caught by surprise when Republicans mounted massive fundraising efforts, with strong help from the business community, that resulted in more money flowing to successful GOP challengers than to the Democratic incumbents.
This year, vulnerable Democrats are attempting to avoid being blind-sided, athough GOP challengers are continuing to get significant support from their own party and from business sources.
Overall, the Republicans have larger numbers of vulnerable House incumbents than do the Democrats, suggesting that economic policy in the 98th Congress will either shift away from its strong rightward course, or turn into a series of confrontations between Congress and the administration.
The one area where Republicans may make up for losses of incumbents is in the open, competitive districts, created by the retirement or primary defeats of incumbents or by redistricting. In these races, the GOP is likely to have a strong financial advantage with better resources available from the party, business and conservative groups, compared with the backing available to Democrats in these contests.