The juicy melon of foreign policy -- as David Bruce used to term it -- has never looked juicier. So the president is subordinating his whole domestic program to the challenge from abroad.
The 75-page State of the Union message released Monday merely summarizes well-worn proposals. It announces that the administration approaches the country's most fundamental internal problems in the spirit of muddling through. c
Inflation is the most acute of the problems. During the Carter administration, the rate of increase in the Consumer Price Index has grown from under 5 percent to over 13 percent. The social cost of inflation, as reflected in such developments as the breakdown in political consensus, runs beyond count. Moreover, once inflation becomes deeply imbedded at around 10 percent there seems to be no cure.
Slow growth goes hand in hand with inflation. Economic uncertainty dulls the appetite for all but the most speculative ventures. Low investment in industry reduces innovation. The upshot is the productivity disaster -- the sharp drop in output per hour of work -- that the country has suffered over the past few years.
Energy dependence connects with both inflation and slow growth. During the Carter years oil imports have risen from 7.3 million barrels daily (or 42 percent of consumption) to 8.4 million barrels daily (or 49 percent of comsumption). The exporting countries have been put under well nigh irresistible pressure to raise prices. The price hikes work as a kind of foreign tax on the United States. They simultaneously cut purchasing power, thus slowing growth, while raising the cost of energy and thus pushing up inflation.
A competent administration with strong policy commitments could use the foreign challenge to promote a more vigorous address to internal problems. Selective Service could be invoked as a move toward mobilization. In that climate, gasoline consumption could be cut back either by higher taxes or rationing. Strong restraints on wage and price hikes could be imposed as a barrier against inflation.
But Jimmy Carter's political base is little bits of all constituencies -- minorities, women, northerners, southerners, city people and rural folk. The president has to cultivate all groups. So his administration never moves unremittingly in any single direction. On the contrary, the president hops from enthusiasm to enthusiasm -- energy, jobs, inflation, foreign policy, morality in government, taxes. His associates shift their concentration with him. So the administration as a whole lurches from topic to topic without ever trying it all together.
So it is with the domestic program this year. There is one new feature -- the huge rise in defense spending programmed to continue through 1985. But the administration is treating that as a one-shot operation, without any side effects on the rest of the economy.
The budget for social spending, instead of being curtailed to fight inflation, is being maintained intact. Not a peep of complaint about cuts has been heard from the veteran complainers in the Department of Health, Education and Welfare. Revenue sharing, though not a success, is being kept alive out of deference to the mayors and governors. Housing and education funds are on the rise.
Strengthening the voluntary wageprice guidelines would also figure in a stepped-up fight against inflation. Instead the Carter administration through its partnership with labor is allowing the exisiting guidelines to erode.
Revenues to meet the new outlays will be increased by the windfall profits tax on oil companies. But serious new measures to cut gasoline consumption -- a big tax or import levies or rationing -- seen to be out. Stimulation of business investment by tax cuts is theoretically possible. But that is increasingly unlikely because defense spending will threaten a big budget deficit if there is also a tax cut.
No doubt the country can get by for another year without a comprehensive domestic program. Higher prices will probably cut demand for gasoline some. Consumers refuse to give up on buying, so a recession keeps being postponed.
But failure to turn the international emergency to account means that the country will probably emerge from the current year weaker rather than stronger. A good bet is that 1980 will yield zero growth and double-digit inflation. In which case Jimmy Carter, even if renominated, is sure to be vulnerable to the right Republican.