Will tax reform replace tax reduction in the hearts of conservative Republicans? Will enterprise zones ever get past House Speaker Thomas P. (Tip) O'Neill? Will the president and other conservative economic thinkers be as successful getting their economic programs passed during the beginning of the 99th Congress as they were when the previous session began?
The answers to the above questions, respectively, are yes, probably and probably not.
"It will be very hard to get radical change pushed through Congress," said Stuart Butler of the conservative think tank, the Heritage Foundation. "It's not like 1981," and the Democrats "are ready" to battle the conservative agenda.
The conservative economic program is largely in the hands of the so-called Young Turk conservatives such as Reps. Jack Kemp of New York, Newt Gingrich of Georgia, Trent Lott of Mississippi and Sen. Robert Kasten of Wisconsin. This summer, they managed to seize control of the Republican Party platform and turn it into a conservative manifesto, endorsing supply-side economics, condemning tax increases and calling for limits on the independent status of the Federal Reserve Board.
But the failure of conservative Republicans to win as many seats in Congress last week as they had planned has cast doubts on the fate of their economic agenda next year. Even tax reform -- the No. 1 priority for conservatives -- is a question mark, despite its popularity among the Young Turk conservatives and the White House.
The Reagan administration's economic wish list is expected to include tax reform, enterprise zones, the balanced-budget amendment, the line-item veto and a subminimum wage for youths.
The conservatives' menu is similar, but it includes monetary reform and possibly some action to curb the power of the Federal Reserve Board. How to reduce the federal budget deficit, of course, will be high on the list.
"The election reduced the room to maneuver," Butler said. "Failure to take control of the House will make a big difference."
Republicans in the Senate, 22 of whom will be up for reelection in two years, will be afraid to pass anything too radical, Butler said.
Despite its popularity now, tax reform faces a high risk of becoming bogged down once proposals by the Reagan administration and the conservatives reach Capitol Hill and the army of tax lobbyists start defending pet shelters and tax breaks, congressional observers said.
Already, Kemp has said he has talked to Rep. Richard A. Gephardt (D-Mo.) about the possibility of having a single bipartisan tax-simplification bill to improve the chances of congressional passage. Gephardt and Sen. Bill Bradley (D-N.J.) have introduced their own tax reform measure.
These plans are different versions of a modified flat tax that taxes everyone at almost the same rate, lowers marginal tax rates and eliminates most deductions and exemptions.
Another important economic item for conservatives is legislation authorizing tax breaks and other incentives to persuade businesses to locate in specified economically depressed urban and rural areas -- so-called enterprise zones. To make the zones even more attractive, Kemp wants to eliminate or reduce capital gains taxes on investments in the zones.
Some political observers said they think enterprise-zone legislation has a good chance of passage this year. It has passed the Senate twice but has been blocked in the House by O'Neill and other Democrats who felt it was too costly.
There also may be bills by Kemp and others to curb the powers of the Federal Reserve Board. For example, Kemp wants to make the four-year term of the chairman of the Fed concurrent with that of the president, but with a time lag. This provision is supported by the current chairman, Paul A. Volcker, and the Reagan administration, an aide to Kemp said.
Kemp also wants to provide a seat on the Federal Reserve Board to the Treasury secretary, a practice that was ended in the 1930s.
Perhaps one of the most potentially controversial aspects of such legislation would require the Federal Open Market Committee -- the policy-making arm of the Fed, to announce changes in its policy on the day the decisions are adopted, rather than several weeks later. Kemp contends that early release of the FOMC actions would end volatile speculation and rumors in the financial markets.
Kemp and some of the other supply-side conservatives also seek to draw up guidelines for the Fed in making monetary policy. Kemp's legislation would make it Fed policy to maintain low interest rates and stable exchange rates and encourage strong economic growth.
Current law does not give the Fed guidelines or goals, but Kemp's legislation would make stability of prices a priority for the Fed.
But this subject that has divided even the conservatives, with some eschewing any diminution of the Fed's autonomy. It is possible that some compromise bill may be passed that would provide more oversight of the Fed by Congress. However, with such widespread dissatisfaction with the way Congress has conducted fiscal policy, some observers said it appeared unlikely that Congress would get the nod to intervene in monetary policy, too.
Besides, Butler said, "The Fed is a very useful whipping boy for any administration."
Butler said he thinks there will be moves toward a new budget act to improve the budgeting process. One part of that strategy would be to give the president the line-item veto power he has asked for. That would allow the president to eliminate parts of legislation instead of having to accept or reject the package as a whole.
Butler also said attempts would be made to require Congress to stick to spending limits it has set for itself, something it doesn't do now.
However, legislation shifting the balance of power over the budget to the president won't be passed easily, either. Few congressmen are eager to relinquish their grip on the budget.
The future is also unclear for the president's proposed lowering of the minimum wage for teenagers seeking summer and after-school jobs. The administration has pushed for such legislation for at least two years and has vowed to seek it again in the next Congress.
However, organized labor, many Democrats and other opponents have continually charged that such a lower wage would induce businesses to fire adults and hire youths for many unskilled jobs.
Some minority groups have opposed the measure, saying that unskilled black and Hispanic youths would earn a wage lower than that received by others for the same work. However, some minority organizations such as the National Conference of Black Mayors have endorsed the wage proposal, saying it would provide more jobs for youths who otherwise wouldn't have been hired.
The proposal would allow the hiring of young people between the ages of 16 and 21 at a minimum rate of $2.50 an hour compared with the $3.35 standard minimum wage.