IT IS JANUARY again, the State-of-the-Union month when Congress reconvenes, the Soviets unveil their annual peace offensive and journalists advise each other that the Reagan presidency is on the ropes.
Here is a typical assessment of the impending Reagan downfall: "Viewed broadly, Reagan's agenda seems hamstrung by internal contradictions. It is difficult to imagine . . . how he can spend more for defense, refuse to raise taxes or cut Social Security, and still chop the annual budget in half. He almost certainly cannot expect the Soviets to reduce their arsenal of heavy land-based missiles while the U.S. plunges ahead with the Strategic Defense Initiative . . . . Reagan seems so dreamily unconcerned with these realities that even some of his own backers fear he may lose control of future policy struggles."
This is the analysis of Time magazine -- but a full year ago, relating what was supposed to happen in 1985. In conventional wisdom then widely echoed, Time observed that soon after Reagan's landslide re-election, "many in Washington now regard him as a lame duck."
A year later, the prophecies of disaster have multiplied and are voiced by the Republican congressional leadership. The prophets are right in stressing the difficulties facing Reagan, but they fail to understand his ability to survive problems that would sink another politician.
In 1986, Reagan seems trapped by a soaring federal budget deficit and its dubious solution, the Gramm-Rudman-Hollings deficit-reduction act. Unless Congress agrees to accept a budget already described as dead before it arrives on Capitol Hill next month, Reagan could be forced to choose between his least favorite remedies, raising taxes or accepting an estimated $60 billion cut in defense spending authority that would cripple his vaunted military buildup.
Reagan's ballyhooed tax reform plan is in trouble. His cabinet remains divided by disputes which he has refused to resolve or recognize. And he has been thrown on the defensive by a Soviet arms control proposal at once more sweeping and more subtle than its predecessors.
Despite all this, the best advice may be: Don't count Reagan out. For most of his political career Reagan's rivals have been doing just that, ever since his first campaign in 1966 when he was depicted as an out-of-work, right-wing actor who had little chance of being elected and even less to succeed as governor.
"I see 1986 as a year of opportunity for all the problems we face," Reagan said to White House chief of staff Donald T. Regan recently in the Oval Office in an expression of the optimism that has become the presidential trademark.
"Reagan is amused by those who would call him a lame duck," says Regan's legislative strategist, Dennis Thomas. "He's not willing to play by the rules and go into semi-retirement."
What baffles and sometimes bothers those who deal regularly with the White House is that Reagan seems sanguinely unwilling to play by any of the regular political "rules" -- or even to recognize that they exist.
Based on past performances, Reagan can be expected to make the necessary compromises while maintaining the purity of his rhetoric. Presidential pollster Richard B. Wirthlin somewhat delicately calls it being "both principled and flexible" at the same time. This means that Reagan will settle for the smallest tax increase that he can get away with, the largest defense budget he can maintain, the most domestic spending cuts he can pry from Congress in an election year.
And it means treating the entire budget process, and the summit with the Soviets as well, as if they were elements in a campaign rather than a negotiating process. Simply put, Reagan will ignore the prophecies and behave as if his contradictory policies are the font of peace and prosperity.
There are Republican budget analysts aplenty who have concluded that Gramm-Rudman is a disaster waiting to happen, and that Reagan will be the victim of it. The president's squabbling cabinet powers, Secretary of State George P. Shultz and Defense Secretary Caspar W. Weinberger, are united in thinking that the budget-balancing law threatens the security of the country. But Reagan, unfamiliar with the complexities of a law his Justice Department is challenging as unconstitutional, behaves as if Gramm-Rudman was the greatest invention since the automatic ice maker.
"What Reagan says when you tell him about the problems is that we've tried and tried to cut government spending and Congress just doesn't do it," said one longtime adviser recently."So why not try this? . . . If it comes to a question of Congress or the president blinking in a confrontation, Ronald Reagan will bet on himself every time."
The adviser acknowledged that there would be defense cuts in 1986 but insisted they would be limited. His view, reflecting the president's, is that "Congress won't want to run on a platform of emasculating defense" in a year when there is a possibility of obtaining an arms control agreement with the Soviet Union.
Based on this perception, the White House has enlisted the Soviets as unwitting allies in keeping the U.S. military budget intact. Last week White House spokesman Larry Speakes observed that Soviet leader Mikhail Gorbachev is watching "to see how our budget process plays out."
If so, Gorbachev may be more involved in the process than Reagan, whose detachment from the day-to-day affairs of governance continues to be the marvel and despair of those who have an inside glimpse of his presidency. Reagan, according to some accounts, was surprised to learn early this year that Shultz, Weinberger and former national security affairs adviser Robert C. McFarlane had strenuously opposed the Gramm-Rudman plan that was embraced on his behalf by chief of staff Regan in September.
But when he was informed of this, the president blandly yet stubbornly clung to the view that there is "a way out" on Gramm-Rudman that will require neither tax cuts nor a serious reduction in defense spending.
This sunny optimism, undeterred by what many in Congress consider the facts, typifies the Reagan presidency. Reagan's ability to pursue contradictory priorities with equal fervor somewhat resembles the eclecticism of his first hero, Franklin D. Roosevelt. According to a member of FDR's braintrust, Roosevelt once was asked by a speechwriter how to reconcile 1932 campaign promises for a balanced budget with New Deal deficit spending programs and replied, "Weave them both together."
In 1980, Reagan promised a balanced budget without tax increases plus an increase in defense spending. He has operated ever since on these contradictory promises. He has also demonstrated, as Roosevelt did, that a president who masters the art of electronic communication and establishes a personal bond with the people, can set his own agenda and leave it to others to weave conflicting priorities together, if they can.
The president is hearing plenty of blunt talk from congressmen in his own party who are worried about Gramm-Rudman. One of them, no fan of Regan, said last week that he thought the chief of staff too often took the rap for the president's disassociation from his own policies."
No matter who his chief of staff is, Reagan rarely practices the politics of detail. His gibe at his predecessor, Jimmy Carter, for supposedly determining who played on the White House tennis courts, reflected scorn for anyone who becomes involved in the minutae of management. "Show me an executive who works long, hard hours and I'll show you a bad executive," Reagan said during his 1980 campaign -- and he meant it.
Reagan is a big-picture, billboard politician, and his billboard in the modern age is the television screen. His slogans -- "stay the course" during the gloomy economic recession of 1982 and "it's morning again in America" during his happy-talk campaign of 1984 -- reflect a mood of hope and optimism that has coincided with a remarkable period of economic growth and political stability.
In Reagan's world, and those of his managers at the White House, the issues of 1986 seem perfectly suited to big-picture politics. The drop in oil prices and the devaluing of the dollar fostered by Treasury Secretary James A. Baker III seem likely to prolong the economic recovery, reduce the trade deficit and dampen demands for protectionism
Presidential pollster Wirthlin sees economic growth as the cornerstone of the Reagan popularity, which has him regularly flirting with a 70 percent approval rating, considerably higher than Dwight D. Eisenhower at a similar period. This popularity, in Wirthlin's view, gives the president the opportunity to "further institutionalize the Reagan revolution" and push his "peace agenda."
Seen through the long lens of the White House telescope, the 1986 agenda consists of a series of televisable episodes designed to dominate the public debate, maintain Reagan's popularity, show off his "leadership" qualities and expose him to the risks of news conference mistakes as little as possible.
Episode One begins Tuesday with the State of the Union address, where Reagan will celebrate his "America is back" theme in a short, punchy speech that leaves the pain of Gramm-Rudman to the budget. To prevent the speech from being simply a rehash, the president's managers have added one of those little, eye-catching flourishes in which Reagan delights, a proposal for catastrophic health insurance. Episode One is really the budget debate, which Reagan will attempt to influence through a series of carefully timed speeches.
Episode Two begins April 26, when Reagan departs for a 12-day Far East trip with the Tokyo economic summit as the centerpiece. The agenda is far from settled, but Reagan can be expected to try to get mileage out of the currency issue, plug free trade and gently prod the Japanese to open their markets. Reagan's advisers say he will also visit at least one other country on this trip, probably Indonesia, where Reagan will attempt to resume his role of international statesman.
Episode Three is the summit, in June or July by White House preference, or in September, if the Soviet counter-proposal prevails. The White House wants a June summit, says an adviser, because "the president's time has to be carefully husbanded and he must be guarded from over-exposure." Or as they used to say during the Ford presidency, Reagan's advisers don't want him trying to walk and chew gum at the same time. A September summit would overlap into the fall campaign.
Episode Four is the campaign itself. Again, Reagan will be used carefully. While Vice President Bush will be on the road two to three days a week for the rest of the year doing three or more events a day, Reagan will be reserved for those special situations in which he can make a difference by raising money or encouraging an extraordinary turnout in a close campaign. In 1982 Reagan made repeated visits to Nevada, where his campaigning proved the key to an upset Republican Senate victory.
This is the rosy picture painted by Reagan and his White House optimists. If all goes according to their happy-ending script, Congress will come reasonably close to its Gramm-Rudman targets, avoiding the automatic cuts. The Soviets will sign some minor agreements and reduce tensions without forcing Reagan to abandon his beloved missile defense ("Star Wars") proposal. The dollar will stabilize. The Republicans will hold the Senate. Reagan's popularity will set new records.
Will it work? Not according to the Democrats, whose chairman, Paul G. Kirk Jr. last week offered this partisan prediction: "In 1986 the fiscal conservative who came to Washington five years ago promising balanced budgets will be revealed as the most reckless borrow-and-spend president in history. He has dodged every tough choice to make a dent in the debts created by his own policies. Gramm-Rudman is an indictment of the failed Republican fiscal policies, and 1986 is the year the president and his party can no longer hide from the hard decisions."
Republicans are apt to see this assessment as sour grapes. But even the most optimistic members of the administration team acknowledge, when extended the privilege of anonymity, some pitfalls in the borrowed Reagan scenario of "Happy Days Are Here Again." These are the obstacles they see:
Pitfall No. 1: Congress hangs tough on Gramm-Rudman, and Reagan refuses to accept even a small tax increase as part of a compromise. Reagan aides say he can win the public relations debate but they are worried about the market reaction to an impasse. The national security community is scared stiff about the "automatic trigger" provision which would cut billions from the defense budget if no agreement is reached.
Pitfall No. 2: The Soviets decide that sweet-talking Reagan brings no dividends because he refuses to modify Star Wars. Nuclear arms talks at Geneva return to gridlock. The summit turns sour. Prospects fade for an agreement that would limit or eliminate medium-range nuclear missiles in Europe.
Pitfall No. 3: One of several regional conflicts escapes beyond its present bounds, triggering U.S.-Soviet confrontations. The freedom fighters in Afghanistan are overwhelmed and the Congress once more stops aid to the anti-Sandinista forces in Nicaragua and Honduras. Turmoil and terrorism deepen in the Philippines and the Middle East.
Pitfall No. 4: Reagan remains aloof from the on-going struggle between strong-willed cabinet members Shultz and Weinberger. Neither an arms control agreement nor a consistent antiterrorism policy is likely unless Reagan intervenes decisively. In the first years of his presidency, Reagan simply did not know enough to make decisions on complex foreign policy issues. His advisers say he knows more now, but he has rarely used his authority to insist on a unified administration view, with the notable exception of Star Wars.
Pitfall No. 5: The Republicans lose the Senate, despite Reagan's best efforts. Stuart K. Spencer, the president's longtime adviser, believes that Reagan's popularity is unassailable but also untransferable. "People put Reagan above the rest of us," says Spencer. "He's not part of the process, he doesn't have coattails. Reagan is there. The rest of us are over here."
Pitfall No. 6: Reagan's health fails. This is the unmentionable issue in the White House. Reagan has faced two of the most dreaded killers, handguns and cancer, and come out on top. The president's courageous response to the 1981 assassination attempt and his 1985 surgery greatly added to the magic and mystique of his presidency but gave intimations of mortality. A Reagan aide says bluntly: "Everything we talk about depends upon a healthy president."
Beyond the conventional prophecies of triumph and disaster, there are those who say that it doesn't matter what Reagan does in 1986. They say that Reagan has entered into a world of his own where he is unjudged by the standards of other men. In the words of Marlin Fitzwater, the vice president's press secretary: "The great genius of Ronald Reagan is that when something goes wrong, he goes up in popularity. When things go right, his popularity goes up even higher."
In other words, don't count Reagan out for 1986. Count him in.