A public hint of the private struggle now going on in the Ronald Reagan campaign was reflected today in a speech in which the former California governor declined to back away from his proposal for a three-year 30 percent reduction in the federal income tax.
Some persons close to Reagan had suggested that the Republican presidential candidate was willing to say that the tax cut would be spread over five years, a modification which presumably would make it easier to achieve other Reagan goals of a balanced budget and increased defense spending.
Instead, in a news conference and subsequent speech to the prestigious Commonwealth Club, Reagan stoutly defended the three-year tax cut, saying it would lead to increased economic output and taxable income that would more than offset lost revenues.
Reagan gave no new details about any part of his economic program today. The entire content of his message was unchanged from what he has been saying on the campaign trail since last November.
Afterward, one Reagan aide acknowledged that new material had been presented to the candidate but said Reagan "was not satisfied with what he had seen." Reagan met privately later in the day with top economic advisers, including former treasury secretary George P. Shultz and University of Southern California economist Arthur Laffer to discuss the proposals in more detail.
A prospective "major economic speech" by Reagan has been under consideration for so long that it has become something of a standing inside joke to some members of the candidate's staff. Such a speech was first promised in early January. Recently, campaign director William J. Casey said that the speech may now wait until after the Republican convention in July.
On its face, Reagan's preference to go on saying what he has been saying would appear to be a victory for the "supply side" economists represented by Laffer, Rep. Jack Kemp (R-N.Y.), and economics writer Jude Wanniski against tradionalist views which stress budget cutting as much as or more than tax reductions.
But Reagan has left himself some running room. He sometimes observes, as he did at the news conference today, that Congress may insist on phasing in the income tax reduction over a five-year period.
The questions asked at the Commonwealth Club today emphasized foreign policy over domestic issues. Here, too, Reagan stuck largely to his basic theme. However, he did say with some sharpness that the United States should let the Soviet Union know that Saudi Arabia is vital to U.S. interests.
"We should let them know that we are not going to let Saudi Arabia fall, either from trouble within or from aggression without," Reagan said.
Reagan's answer came in response to a question about whether the United States should send the Russians a "signal" warning them not to invade Iran. Reagan said that the trouble with such a signal would be that the United States, as in Afghanistan, would have very little military capability with which to back up such a warning. He pointed out that the Russians have 150,000 troops near the Iranian border, while American forces are thousands of miles away.
"The signal should be a little farther back . . . in Saudi Arabia," Reagan said.