The chairman of the House Budget Committee yesterday called on President Reagan to "begin serious attempts" at an arms limitation agreement with the Soviet Union as a way of limiting defense spending and thus balancing the budget.
The suggestion, from Rep. James R. Jones (D-Okla.), comes at a time when Reagan has stepped up his attacks on the Soviets.Although the president has said he is willing to enter "discussions leading to negotiations" on arms reduction, in his first presidential news conference last week he called detente with Moscow a one-way street and accused the Soviets of condoning lying and cheating to reach their goals.
But Jones' remark, made in an appearance yesterday on "Meet the Press" (NBC, WRC), also comes at a time when the president is looking for solutions to an economic situation that his chief of staff yesterday called "the worst mess we've seen in 50 years."
James A. Baker III, appearing on "Face the Nation" (CBS, WDVM), said that Reagan's televised address to the nation Thursday will explain how the economy -- "the No. 1 priority of this administration" -- got into this "mess" and will give general indications of the course the president wants to follow. Details will be announced in a State of the Union address Feb. 18, he said.
Rep. Jack Kemp (R-N.Y.), who appeared with Jones, said he expected Reagan to announce a 30 percent cut in personal income tax rates over the next three years retroactive Jan. 1, but Kemp said he would support whatever effective date the president announces. Reagan promised the tax cuts during his campaign, but some administration economic advisers have debated the timing of the cuts, contending that making the tax cuts effective July 1 rather than Jan. 1 could decrease the drain on federal revenues by more than $35 billion in fiscal 1982.
When asked what kind of tax program Reagan would announce, Kemp, an author of the 30 percent tax cut plan known as the Kemp-Roth bill, said, "Well, I think it's going to be retroactive to Jan. 1. But I am willing to admit that if it takes an implementation in May or even in October, I certainly will defer."
Kemp also said that the administration's planned spending cuts could be described as "dramatic" and that while most of the attention has focused on proposals to slash food stamps and foreign aid, "the administration is committed to reducing the subsidies for major businesses" such as Department of Energy subsidies for synthetic fuel plans, the Synthetic Fuels Corp. and some export-import loans.
Jones said his committee expects a report Tuesday from the Congressional Budget Office on programs it suggests be slashed. He also said he favors implementing spending cuts before or at the same time as tax cuts, a view expressed by Federal Reserve Chairman Paul A. Volcker yesterday on "Issues and Answers" (ABC, WJLA).
"There is no doubt you need large budgetary cuts in the tens of tens of billions of dollars from an ascending, a rapidly ascending scale of government spending if you're going to aim for a balanced budget" by 1983, Volcker said. "If you go ahead with the tax cuts without budgetary commitments in place you may never get the budget cuts."
Volcker also said he does not intend to ease up on his policies of tightening the supplies of money and credit and he would not predict what interest rates will be, because of the uncertainty of inflation.