The illusion that covers the Reagan administration as it begins its last year is typified by the crisply conservative early draft of the president's State of the Union message.
The rhetoric on both foreign and domestic issues is so reminiscent of the administration's early militant spirit that President Reagan's speechwriters who hammered it out wonder whether it can be preserved. It clearly runs counter to the conciliatory and pragmatic White House of the past 10 months under Chief of Staff Howard Baker.
Present from the beginning but growing wider during the second term, the gap between rhetoric and reality has created the Reagan illusion. The reality of irreversible 1987 year-end retreats is supposed to be wiped away by brave words being crafted for Ronald Reagan to begin 1988.
The craftsmen are members of the president's speechwriting team, which has become a right-wing enclave in a centrist White House. The draft by chief speechwriter Tony Dolan invokes the Reagan Revolution. Besides pressing for fiscal integrity, the State of the Union draft stresses family values and basic education.
The draft reaffirms the Reagan Doctrine -- helping anticommunist fighters in Nicaragua, Angola and Afghanistan.
Yet Friday morning's senior staff meeting discussed the calculated risk of stopping aid to the Afghan fighters in return for promised Soviet troop withdrawal. Indeed, the impending battle over words and phrases seems irrelevant in view of how the president's seventh year ended.
Not only did Reagan agree to multi-year tax increases, but Budget Director James Miller was slapped down when he suggested Gramm-Rudman budget sequestration was preferable to a grab-bag spending bill. If he would not agree to Gramm-Rudman, the president would not shut down the government and veto the catch-all measure.
To insiders, the clearer signal of diminished presidential will was Reagan's signature of the independent counsel bill authorizing special prosecutions. It was called unconstitutional and a veto was recommended by three of the diminishing band of Reaganites who still wear Adam Smith neckties: Attorney General Edwin Meese, presidential aide Ken Cribb and Miller.
No discussion of the bill took place in formal White House sessions. It was widely assumed there that as a matter of course it would be vetoed. The president's signature was a shocker, not mitigated by his assertion that the bill probably is unconstitutional.
Nowhere was the gap between rhetoric and reality clearer. The bill was signed as a recognition of Realpolitik. A veto would get bad reviews, reminding everyone that an independent counsel investigating the Wedtech scandal might yet indict Meese; the veto likely would be overridden anyway.
The speech draft's emphasis on a balanced-budget amendment and the line-item veto rings hollow in this environment. The most dramatic argument for the line-item veto was last month's catch-all spending bill, featuring such outrages as Sen. Edward M. Kennedy's act of political vengeance that threatens to close the New York Post.
Here was a classic argument for giving presidents the power to veto individual items in such bills and thereby eliminate this legislative chicanery. But no one at the White House other than aide Gary Bauer had anything to say about it.
In the excitement of renewal beginning the new year, the depression of last autumn has left the White House. The summit's excitement supplanted Iran-contra melancholy. Presidential aides were cheered last Friday morning when they learned of another drop in the unemployment rate (before that afternoon's market plunge). The promise of vigorous presidential rhetoric stirs the mood.
But outside the White House, the illusion is wearing thin. One former Reagan appointee told us ''the people have gotten sick of Republicans, of seeing the president at Walter Annenberg's on New Year's Eve.'' In the eighth year of an eventful and even historic administration, it will take more than a peppy State of the Union to change that.