The Democrats have been saying that President Reagan's television talk on the economy last Wednesday night shows he is "out of touch" with reality, and in one respect, at least, they are right. The debate in many Senate and House campaigns has moved beyond the issues he discussed -- and a good thing, too.
That was hardly a "nonpartisan" talk Reagan gave, with its punch line from the Republican TV ads urging voters to "stay the course."
Substantial progress has been made, since the Republicans took over, in reducing inflation, bringing down interest rates, slowing the growth of federal spending and cutting taxes. They are entitled to take credit for it.
The distortion was in the omissions from Reagan's speech: the increase in deficits, the shift of resources from domestic programs to the military budget and the transfer of wealth from the near- poor to the near-rich and the rich.
Those topics are being talked about in the campaign -- not as much as the sickening scourge of unemployment, which has blighted so many communities across the land, but more than Reagan acknowledged. And they will be part of the policy debate that awaits the government and the country once this campaign is out of the way in a couple of weeks.
The most honest statement in the president's address was his admission that the country has "a long way to go before we restore our prosperity." Because that is the case, and because there are no quick fixes in either party's medicine bag, it is a healthy thing that so many candidates in both parties are talking sense about issues the president found it unnecessary to discuss.
They are talking about the defense budget, whose accelerating growth puts relentless upward pressure on deficits and relentless downward pressure on the government's capacity to meet its minimal obligations to the jobless, the needy and those too old or young or ill to work. The debate on the growth of military spending will increase in the new Congress.
They are talking about the financial squeeze on America's education system and about the deterioration of the "infrastructure" of transportation, communication and public works on which the growth of the private economy rests. The "seed corn" issue -- investment in the education of young Americans, the training and retraining of older Americans, and the rebuilding of our roads, rails and bridges -- will get more attention in the new Congress. 4 In a good many campaigns they are talking about taxes and the wisdom, as several candidates have put it, of "borrowing another $60 billion" to finance the third-year tax cut promised for 1983. Reagan, in his talk, simply assumed that tax cut will be implemented; my guess is that it will be seriously debated in the new Congress.
Finally, they are talking -- a bit timorously, and mostly where they feel very secure politically -- about the unpleasant task of slowing the growth of Social Security and the other entitlement programs. This one, which Reagan entirely avoided, will be on the agenda, because there is no way the new Congress can avoid the short-term financing crisis that threatens Social Security payments.
All this debate strikes me as good news. If there is, as I expect, a marginal increase in the number of Democrats in the new House and Senate, then the prospects will be good for a coalition of moderates to take command of the legislative agenda. We saw the beginnings of that coalition in the past four months, when Congress put through a remedial tax-increase bill, overrode a presidential veto of needed domestic spending and rejected all of the constitutional amendments Reagan endorsed on behalf of his New Right constituents.
The president, for obvious reasons, chose to overlook the implications of the history of his administration's two phases. In 1981, when his tax and budget cuts were swept through Congress with alacrity, the reaction on Wall Street, the financial markets and the economy was one of doom and gloom.
In 1982, when Congress rejected his budget, rewrote it on its own, and forced him to accept a tax increase he had opposed, Wall Street boomed, interest rates cracked and at least some sectors of the economy showed signs of revival.
The president may have missed the connection, but many members of Congress and candidates for Congress, Democrats and Republicans alike, have not. It will be a more assertive Congress next year, and that, I think, is all to the good.