David Stockman, Ronald Reagan's choice as budget director, gave Democratic senators at his confirmation hearing yesterday a taste of what the Reagan administration may be like, ticking off program after program on his personal list of possible spending reductions.
Among other items, the 22 percent pay increase President Carter proposed this week for high-level federal officials and members of congress should be delayed until after Congress enacts the Reagan economic plan, Stockman suggested. Passing the pay raises prior to action on spending cuts "would be a very bad signal to the American people," indicating that Congress isn't serious about sharing the "sacrifice we're going to have to have," he said.
Stockman also said the Reagan administration may seek to delay the effective date of its proposed 1981 tax cut from jan. 1 to june 1, to reduce the likely fiscal 1981 deficit. The date of the first installement of the tax cut "isn't very important. the real importance is that there be a permanent reduction" in rates over the next three or four years, Stockman said.
Reagan in the election campaign called specifically for a tax cut to take effect Jan. 1, and such advisers as Rep. Jack Kemp (R-N.Y.) still favor that Stockman said no decision has yet been made.
Stockman, a 34-year-old Michigan Republican, has led efforts by Reagan aides to prepare a long list of spending reductions for consideration by the president-elect. Reagan told reporters yesterday that he will seek to limit spending "across the board," in order to prevent budget deficits from escalating above $100 billion in the next few years. "We're going to start whittling at it," Reagan said.
Neither Reagan nor his aides have specified where they propose to reduce spending, but Stockman, speaking for himself, was not short of ideas.
The limits on spending would have to accompany the tax cuts, Stockman said. And as the Governmental Affairs Committee's Democrats questioned him, he endorsed cuts in programs of special interest to most of them.
"I could probably find something in NASA to cut," Stockman replied to Sen. John Glenn (D-Ohio), near the end of the five-hour hearing on his nomination as director of the Office of Management and Budget. Glenn, former astronaut and staunch defender of the National Aeronautics and Space Administration, stared back coldly.
But except perhaps for Glenn, Stockman appeared to impress the committee members, even the Democrats who didn't agree with him.
Most nominees for high-level posts "have no views on anything," observed Sen. Thomas F. Eagleton (D-Mo.), but Stockman "knows what the hell's going on."
Sen. James R. Sasser (D-Tenn.) said he was worried about Stockman's criticism of the Federal Financing Bank, which has saved the Tennessee Valley Authority's customers some $100 million since 1974 by marketing subsidized bonds. The saving enjoyed by TVA's customers is being paid by taxpayers elsewhere, Stockman replied. "We've got to evaulate that equation very carefully," he said.
What about the need for a new national industrial policy to channel special federal assistance to states like Ohio and Michigan, where auto and steel plants are being closed one after another? asked Glenn.
The answer is not a federal safety net under aging industries, replied Stockman, but enactment of the Reagan tax and spending proposals, which will move the economy "onto a healthy path of expansion." If corporate taxes are cut, and individuals allowed to increase savings and investments, there will be money for companies to grow again, he said.
Glenn and Eagleton feared that wouldn't happen fast enough.
Eagleton brought up a letter Stockman had written to Agriculture Secretary Bob Bergland, criticizing federal agricultural subsidy programs and urging a "cold turkey policy" to cut them back. Did Stockman oppose price supports for dairy products and tobacco and the other federally supported commodities? Eagleton asked.
"I have a rather dim opinion of those agricultural subsidy programs," Stockman said, although he acknowledged the "practicle" problems in trying to eliminate them overnight.
Stockman said that, contrary to Reagan's campaign position on spending, the necessary budget reductions could not be accomplished merely by cutting waste and fraud in federal programs. "We have to be beyond waste, fat and abuse," although there could be a debate about the definition of waste, Stockman said.
Medicaid, food stamps, welfare aid for dependent children, and other social programs were created with a worthy purpose for legitimate needs, but over the years have been expanded to include people who should not be eligible, he declared. "We're going to have to reduce resources and service levels, because we can't finance them," and that will require a complete review of eligibility, he said.
Although he opposed the so-called "windfall profits" tax on domestic oil, he said he woiuldn't favor an attempt to eliminate it immediately, because the revenue it raises will help balance the budget in the years ahead. He does favor removal of price controls on oil and elimination of the federal regulations on gasoline distribution, saying the latter were the chief cause of the gasoline lines in 1979. If they are in place this summer and gasoline stocks are tight because of the Iran-Iraq war, the allocation rules could cause lines again, he said. There has been no decision by Reagan on this point, however, he said.
Stockman stood by his contention that the federal government ought to leave the energy policy essentially up to private industry and not try to achieve "energy independence" by pouring billions of tax dollars into synthetic fuels projects. The only thing the federal government can do in the next four years to lessen its dependency upon Middle East oil is fill the stratetic petroleum reserve, Stockman said. He said the new administration would take a particularly hard look at proposals to build commercial synfuels projects with "state-of-the-art" technology.
As Sen. Henry M. Jackson (D-Wash.), former Energy Committee chairman and a principal sponsor of the legislation creating the Energy Department, listened, Stockman said he didn't expect "an early or frontal effort" to dismantle the department -- the term Reagan often used in the campaign. Instead, he said, various functions should be reviewed and eliminated one by one.
One of the most prolific writers in Congress, the former House member heard senators read some of his most controversial statements back to him. Glenn, for example, noted Stockman's description of some federal assistance programs that expand rapidly during a recession as a "coast-to-coast soupline." Stockman said that wasn't meant in a derogatory way. His point was that when the economy slumps, the costs of some federal programs automatically balloon upward, beyond the control of Congress of the administration.
"Sometimes my metaphors may not be as exact as I'd like," he said. At another point he said, "If I do manage to get confirmed in this job, I'm going to stop writing."
At the end of the long day, Sen. Carl Levin (D-Mich.) said he disagreed with many of Stockman's remedies, fearing that the cure "may be worse than the disease," but called him "candid" and "forthright." And Sen. Mack Mattingly, newly elected Republican from Georgia, seemed awed at Stockman's performance: "I think it's commendable that you have an answer for everything."