The agenda of domestic politics for the next two years took shape last week when the congressional Democrats surfaced their response to President Regan's programs. Ahead lies a fight over federal spending and taxes that will be exceedingly sharp.
But also exceedingly narrow. The truly fundamental problems of the country -- the problems that underlie chronic inflation, slow growth, high unemployment, declining cities and growing social discontent -- are off the agenda.
The Democratic response is barely concealed effort to steal Republican clothing. A virtual declaration of larcenous intent came in a Statement of Economic Principles drafted for the party by Richard Gephardt, a young congressman from St. Louis. The statement said:
"A national consensus has developed behind slowing the growth rate of federal spending, reducing the size of government, including its maze of regulations, and prividing tax relief. . . . Democrats will support each of these goals, and will work with the new administration to achieve them."
A spending program in line with that approach was announced by James Jones, chairman of the House Budget Committee. It included a moderation of cuts favored by the administration in welfare, Medicaid, job training, child nutrition and support for local education. But the funds for the increased spending will be made available by cutting waste in the defense budget. Compared with the Reagan program, accordingly, the Democratic program envisages lower spending for fiscal 1982, and a much smaller budget deficit -- under $25 billion, as against $50 billion for the administration.
The tax plank in the Democratic platform was laid out Thursday in a speech in Chicago by Dan Rostenkowski, chairman of the House Ways and Means Committee. It centered around a one-year tax cut, instead of the three-year Kemp-Roth proposal favored by the administration. The bulk of the benefits would go to taxpayers in the $20,000 to $50,000 tax bracket. The high levy on unearned income would be cut from a 70 percent to a 50 percent ceiling. The ranking Republican on Ways and Means, Barber Conable of New York, called the Rostenkowski proposal a "conservative bill."
The blurring of party lines thus attempted by the Democrats naturally excited an administration effort to sharpen the divisions. Treasury Secretary Donald Regan and Budget Director David Stockman called the Democratic proposal "unacceptable" and charged it would mean "substantially higher taxes." Jones shot back that Regan and Stockman were men with a "bunker mentality stemming from a gargantuan sense of egotism."
Despite the harsh tone of those exchanges, a compromise is sure to emerge when Congress, much later this year, finally approves the 1982 budget. The Democrats will probably have their way on the one-year tax cut. The Republicans are likely to enact the reductions in government spending proposed by the president. As the two parties battle for competitive advantage, the heat in the debate is almost certain to increase.
Not, however, the light. For left out of the narrow range of argument are the subjects that chiefly ought to be engaging the country. Steady rises in wages and prices, for example, are central to almost all national economic troubles.
So the upward pressure continues. General Motors, after a year of record losses, has just decreed an increase in auto prices. The rise ends any chance of winning a cutback from the auto workers in the present, king-sized wage contract. But with prices and wages rising, American auto manufacturers will be poorly placed to make a comeback even if sales pick up. That means more bad news on inflation, growth, international competitiveness, employment and urban social tension.
Energy dependence on foreign countries, besides being a famous source of high inflation and slow growth, is also mixed up with unstable financial markets. But energy comes onto the present agenda chiefly in the form of proposed cutbacks in strategic petroleum reserve and programs for synthetic fuels. So dependence on foreign sources, far from being limited, is going up.
The chances of widening the Republicrat debate to include more serious subjects are, unfortunately, slim. The national shock that might have been generated by new gas lines is now postponed by a temporary glut of petroleum on international markets. Increased defense spending will probably fend off the push for change that could come with a big recession. Moreover, public expectations for results in the fight against inflation have been further diminished by the shooting of the president and his necessarily long convalescence.