As inadvertent misstep by Ronald Reagan less than 48 hours after his landslide threatens not only his tax reduction goals but also hopes of sealing his victory with a trailblazing economic policy.
Reagan's decision to go along with a tax cut in the lame duck session was made on the spot during his Nov. 6 Los Angeles press conference. It has since been elevated to official policy, leading many lawmakers of both parties to shrug shoulders and say: if that's what he wants, we'll give it to him. Although obstacles remain severe, it is at least possible the bill could clear Congress and President Carter's desk this year.
"We must not let this happen," a House Republican close to the Reagan campaign told us. The lame duck bill would kill the far more ambitious Kemp-Roth bill for 1981. That would mangle plans for a radical approach to the economy combining an attack on the federal budget that does not starve the poor with massive, long-range tax reduction that nourishes the middle class.
But how to prevent this from happening? In these strange interregnum days, it is not absolutely certain the tax cut phobia of President Carter and Speaker Thomas P. O'Neill will kill the lame duck bill. The president-elect, in seclusion at his Santa Barbara mountaintop, that he must undo what was done so lightly in the flush of victory. Rep. Jack Kemp might fulfill that function when he goes west this week.
It all began with a statement the day after the election by Sen. Robert Dole, giddy with the unexpected prospect of becoming Finance committee chairman, that he hoped for lame duck passage of the Long-Bentsen bill adopted by the committee last summer. Asked about this at his press conference the next day, the president-elect paused and then replied: "It'll be fine with me. . . ."
By the time Reagan chief of staff Edwin Meese appeared on NBC's "Meet the Press" three days later, the inadvertent remark had become official policy. "What Ronald Reagan is saying," explained Meese, "is let's not waste any time. Let's get tax cuts into effect."
When it emerged last summer, Long-Bentsen was embraced by Republicans as a bipartisan facsimile of Kemp-Roth. But that was campaign politics; it is no such thing. Apart from business tax incentives, Long-Bentsen is a typically Democratic tax bill that increases the progressivity of individual taxes. While Kemp-Roth would slash rates 10 percent a year across the board, Long-Bentsen barely cuts them an average of 4 percent (and only 1 percent in the upper brackets).
Reagan's embrace of this last week was interpreted by friend and foe as a mercy killing for the tax cut he promoted during 12 hard months of campaigning. "He gets off the hook on Kemp-Roth," Senate Democratic Whip Alan Cranston told us. The same conclusion was drawn at the Carter White House -- and by worried supply-side tax-cutters.
Almost certainly, there were all wrong. Against advice from traditionalist economists, Reagan all year stuck to Kemp-Roth. The high probability that he stumlbed in the Nov. 6 press conference typifies the pitfalls confronting a newly elected president. He snap reaction was to endorse a bill tht he had already backed during the campaign under wholly different circumstances.
Accidental or not, passing the lame duck bill would disrupt plans for a massive, multi-year tax cut in 1981 designed to transform the nation's economic climate. The 1981 bill would be considered by a Republican Senate and a House that, though still Democratic, will be much more Republican than the present one. Most important, it would be drafted by a Republican treasury as the esstential first step of the new administration's whole economic program.
Passage of the lame duck bill would kill real chances for another tax bill in 1981. If Reagan is serious about quickly seizing control of the federal budget, he would have no tax cut sugar to sweeten that bitter medicine. And if he fails to establish this economic program at the beginning, it will be much harder later.
If thoughtful Republicans do not change Reagan's stance, they pray the lame duck tax bill becomes a victim of the economic thinking that has made Jimmy Carter himself a lame duck. Treasury Secretary G. William Miller will recommend a veto, and the president's instinct is to comply. Or Tip O'Neill might save him the trouble by ordering a hold in the House Ways and Means Committee, where lame duck Chairman Al Ullman is opposed anyway.
But given the Republican mandate, the president and the speaker conceivably might give the president-elect what he says he wants. That is why the effort will be made to have Reagan end his hasty embrace of the lame duck Democratic bill and not repent it at leisure through the four years ahead.