Two years ago, the Democrats failed to produce an alternative budget that made any sense; they knuckled under to presidential pressure and, as a result, the president racked up one victory after another. He got all he wanted--and more--from the Democrats who voted for his budget cuts and "out-Reaganed Reagan" in adding to the excessive tax cuts.
Now, you can tell from the shrill rhetoric blasting out of the White House and the Treasury Department that the Democrats have gotten their act together. Encouraged by their victories at the polls last November, the Democratically controlled House Budget Committee generated a budget resolution that is realistic and even sensible, and the House passed it 229 to 196.
This budget attacks the basic precepts of Reaganomics. For fiscal 1984, it slashes defense spending $10 billion, restores some of the harshest cuts in non-defense spending, and proposes $30 billion in tax increases. These measures will lower the federal deficit from the $188 billion proposed by the White House to $174 billion.
Adding up the major changes through fiscal 1988, the Democrats' budget would cut $200 billion from defense spending and collect new taxes of $265 billion--which Republicans charge would mean scrapping not only this year's 10 percent Kemp-Roth rate cut, but future tax indexation as well.
The House action is a major defeat for President Reagan, and because the general thrust of it has strong support among Republicans in the Senate as well as the House, it is a precursor of an eventual compromise Reagan will have to accept.
But for now, the White House rhetorical bombast has reached a new peak. "This partisan Democratic budget is a dagger aimed straight at the heart of America's rebuilding program," Reagan intoned in a specially orchestrated little press conference a week ago Friday.
In due course, the administration PR machine cranked out a statement for Treasury Secretary Donald T. Regan, who labeled the Democratic budget "irresponsible," "preposterous," "unrealistic," "unfair," and "unacceptable."
If adopted, Regan said, the Democratic proposal would cut short the recovery, lead the nation back to double-digit inflation, double-digit unemployment, economic stagnation, and result in a lower standard of living.
And in a burst of compassion, Regan said that the Democrats' proposed tax increases would hit lower and middle-income taxpayers harder than the rich ones.
On that latter point alone, Regan may be right. Because of the personal income tax cuts already in place through the first stages of Kemp-Roth, the accelerated depreciation provisions, individual retirement funds, and a reduction in the highest marginal tax rate from 70 to 50 percent, wealthy taxpayers have derived the enormous bulk of the tax benefits gained so far as part of Reaganomics. This is freely admitted when Reagan's officials talk privately about the tax cuts that have taken place so far. The facts are uncontestable.
This little nugget on the effect of tax cuts so far and on the tax increases proposed by the Democrats helps give the lie to the White House charge that it was "the liberal wing" of the Democratic Party that produced the House budget proposal. "I am not a liberal. Jim Jones Budget Committee chairman is not a liberal. And the budget is not a liberal document," said Rep. Richard Gephardt (D-Mo.).
Indeed, it is not. An analysis of the Democratic proposal offered by the Center on Budget and Policy Priorities (funded by the Marshall Field Foundation and other private contributors) points out that the House proposal leaves in place $500 billion in tax cuts over the next five years.
The center notes that in contrast to the "spend and spend" label that Republicans place on the bill, it restores only 28 percent of cuts in "means-tested" entitlement programs made in the past two years. Put another way, 72 percent of the cuts Reagan made in child nutrition, Medicaid, food stamps, and the aid to families with dependent children (AFDC) programs, when he had the Democrats as voting accomplices, would stay in force.
The president charges that the Democrats want to "turn the clock back to pre-1981 when domestic spending was soaring out of control." The fact is that in real (inflation-adjusted) terms, the Democratic-proposed appropriations for fiscal 1984 are 18 percent below fiscal 1981 levels. Funds for many other non-entitlement programs such as social services block grants or low-income housing are also well below fiscal 1981.
The biggest difference between the Democratic and Republican budgets comes on the military side. President Reagan said that the House Budget Committee resolution "would cripple efforts to modernize America's defenses." It would bring "joy to the Kremlin" because it means abandonment of the defense rebuilding program, he added.
Reagan blandly misstated the Democrats' proposed 4 percent real growth in defense spending as "2 to 3 percent" in a recklessly militant speech that ignored growing congressional demands for a negotiated end to the economically crippling arms race with the Soviet Union. By this time, the public may be getting used to Reagan's casual misuse of statistics.
These are the relevant facts:
* Defense outlays under the Democrats' budget would increase $21 billion in fiscal 1984, another $21 billion in fiscal 1985, $28 billion in fiscal 1986--a total of $70 billion from fiscal years 1983 to 1986.
* At that time, defense spending will hit an annual level of $284 billion, more than twice the 1980 level of $136 billion, the last full year of the Carter administration.
* Adjusting for inflation, this would be a 42 percent increase in real spending over 1980. The 1986 total would be higher in real dollars than in any year of the Vietnam or Korean wars.
* Total appropriations for defense under the Democrats' proposal over the next five years would still be enormous--$1.6 trillion instead of Reagan's $1.8 trillion. Both budgets--to use the phrase Reagan disavowed--"throw money" at the problem, instead of looking to an end to the arms race.
But the House Democrats have at least made a start in an effort to bring some fiscal sense to the budget, and to correct some of the more egregious errors of Reaganomics. Their budget is far from perfect, far from liberal. But it's a small first step on the road back to economic sanity.