While angling for a two-year spending ''freeze'' from his defensive trenches in the roaring battle of the budget, President Reagan has finally cocked his fist against Capitol Hill protectionism, the issue that may be bigger than the deficit in undermining confidence in America's future.
His maneuver to trim dangerous ambitions of the protectionist-minded Democratic Congress is simple and direct: a letter the president believes will be signed by at least 40 senators and then sent to him. It will make clear that when he vetoes a protectionist trade bill -- as he fully intends -- the veto will be easily sustained in the Senate.
That marks the president's first real political initiative since the Bloody Monday market crash of Oct. 19. In a White House bludgeoned by repeated hits of bad news, the stock market debacle established a mood of gloom and defeatism that was still present when Reagan met with congressional leaders Monday.
Taking his case for a line-item veto to the country as the one tool to free Congress from thralldom to special interests is not for Ronald Reagan at this lame-duck stage of his presidency. ''Too bold for this White House,'' one presidential aide acknowledged privately. Unlike high-tariff Democrats who can be stopped with a veto, the high-spending bloc is harder to hobble.
Instead of confidence, the mood in the Cabinet Room bright and early Monday morning drooled with self-conscious buddy-buddy efforts to show that the executive and legislative branches really could rally together in the national interest. When Senate Majority Leader Robert Byrd argued for both sides to tone down ''all the blame-throwing and finger-pointing at each other,'' White House Chief of Staff Howard Baker caught the mood. ''What we need is a cease-fire in place,'' he said. Everyone present suspected the Byrd/Baker objective was unlikely to be reached.
Reading between the lines of what the president said, there was no doubt he favored a more relaxed spending ''freeze'' on discretionary parts of the budget over the broader, tighter spending cuts in the Gramm-Rudman-Hollings sequester. ''I learned about that kind of cutting when I was governor of California,'' the president recalled ruefully for the congressional leaders. ''The roof fell in on me.'' Gramm-Rudman will be automatically triggered next month to slice $23 billion from the coming year's budget if Congress and the president are unable to come up with at least that large a reduction in the current negotiations.
The real reason Reagan wants no part of the Gramm-Rudman-Hollings sequester is its horrendous bite out of the defense budget. By comparison, an overall $23 billion spending freeze would not be nearly so harsh on the Pentagon at today's spending rates, at a time when political jousting with Moscow adds potency to the defense budget.
But Reagan's men in the White House, whose strategy in the budget negotiations is in the hands of Treasury Secretary James A. Baker III, have no illusions about the difficulty of holding Congress to any budget ''freeze.'' Baker gently pushed the freeze idea in a telephone chat from the White House with Senate Republican leader Robert Dole and House Republican leader Bob Michel early Monday morning.
Arguing for a second and possibly a third year, Baker noted the ratchet effect of the kind of freeze backed by the White House. The second-year savings would be larger than the first, and the third still higher. He also touted a two-year freeze as a way to bridge the 1988 general election campaign year, when Congress probably could not be induced to cut spending no matter what the financial crisis.
But are the controlling Democrats in a mood to give the president any budget gift at all without a tax sidecar he will not ride in? Or without so many exceptions and exemptions that either defense will have to take far more than its share of the reduction burden or taxes will have to be raised beyond Reagan's willingness to sign off?
One administration official who thinks the deficit has been overrated as a cause of the market crash calls a two-year freeze ''the least pernicious'' -- but only if the president successfully resists major breaches against his anti-tax-hike commitment and stands Congress down on exemptions.
It doesn't take a suspicious president in a beleaguered White House to know that Congress must provide guarantees of real-time spending reductions before he signs a piece of paper. To restore confidence in U.S. markets by proving the federal government really can control the spending process requires iron-clad proof against willful parliamentary gimmicks such as surreptitious transfer of spending from one year to the next.
That is Reagan's price for the freeze now being drafted. Both Jim Baker and Howard Baker know that the obstacle is not getting Congress to vote reductions but to enforce the reductions it votes.