President Reagan, on the eve of the state of the national speech that will present his economic package of tax cuts and close to $50 billion in budget reductions, underlined how serious he is about controlling government spending by reversing himself yesterday and recommendating no pay raise for senior government officials and members of Congress.
His speech at 9 p.m. ushers in the first major test of Reagan's presidency by translating the appeals for belt-tightening to revitalize the economy which carried him to the White House into debates and struggles among competing interest groups.
There were several signs yesterday that the pressures are already intensifying.
Reagan abandoned his support for a 16.8 percent pay raise affecting about 35,000 people as inappropriate when he is about to ask sacrifices of so many other Americans.
President Carter, after consultation with Reagan, proposed the raise Jan. 7 for the senior officials who have not had a raise since 1975 and have had a salary increase of 5 percent during a period in which cost of living rose 44.9 percent. Reagan, then president-elect, said he would not oppose the raise, which would have cost $183 million in the first 12 months.
A remarkably amicable, mood has settled over Washington in Reagan's first month. As Reagan's point man, Office of Management and Budget Director David A. Stockman, led a platoon of budget-cutters through the forest of federal programs, the president and other aides worked hard to make friends and win, congressional votes for the economic package.
Even as leaks revealed that lone lists of programs cherished by one interest group or another were coming under Reagan's ax, protest was muted if not inaudible. After today, it will be noisier.
House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) sounded the first warning that the economic program may not sail smoothly through the Democratically controlled House of Representatives.
"We're not going to go forward and ram through everything he's asking for," O'Neill said. "Haste makes waste." O'Neill told reporters that Democrats would not let Reagan "tear asunder" programs built up over the years. He accused the president of having oversimplified the economic problems in explaining them to the American people.
House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) echoed O'Neill in a Chicago speech. Reagan "gets to kick off," Rostenkowski said, "and I get to lead the suicide squad down the field."
Republican congressional leaders met in Senate Majority Leader Howard H. Baker's (Tenn.) office to plan their strategy for guiding Reagan's program through Congress.
Baker and Senate Budget Committee Chairman Pete Domenici (N.M.) made clear they intend to proceed with quick moves to trim the budget in the Senate, which the GOP controls, before the House acts."We're going for an upright, quick reconcilliation," Domenici told reporters, referring to a way to bring the budget for the current fiscal year under new limits.
In an early example of the range of struggles to come, the administration has agreed already to slash food stamps less deeply then Stockman first wanted, under pressure from one of its political allies, Sen. Bob Dale (R-Kan.). The overall cut for fiscal 1982 will be between $1.5 billion and $1.8 billion instead of $2.6 billion. Dole had several conversations with Stockman last week.
However, there will still be cuts of about $1 billion from the $4 billion child nutrition program.
Cuts in children's nutrition, food stamps, welfare and Medicaid will make millions of the poorest families and children "hungrier, colder and sicker than they already are," Marian Wright Edelman, director of the Children's Defense Fund, told a press conference. The fund is a lobbying group for federal social programs.
A small part of Reagan's budget-cutting, water projects, was once again proving politically troubling. Carter was swamped by opposition when he issued a hit list of water projects dear to their congressional and other supporters. The Reagan cuts will total only about $100 million, of which not all may be announced today, according to well-informed sources.
Meanwhile, consumer advocate Ralph Nader released a study saying Reagan could stop unnecessary and unsound water projects plus other subsidies to business and save more than $52 billion in federal spending. "If you are truly interested in waste, look into the billions of dollars of tax breaks for multinational corporations before you make it harder for poor people to receive minimum legal services and loans for their self-help co-operatives," Nader urged Reagan and Stockman.
The decision on pay affects 800 top members of the executive branch, 546 people on the congressional payroll, a small number of judges in special courts like the Court of Military Appeals and about 34,000 civilian and military government employes on the top civil service pay rungs whose salaries are frozen because of a cap preventing them from earning more than their senior executives. It came as a House task force opened hearings on the proposed 16.8 percent raise.
Rep. William Ford (D-Mich.), chairman of the Post Office and Civil Service Committee, heard opening testimony from representatives of the Business Roundtable and the Advisory Commission on Executive, Legislative and Judical Salaries that government is having trouble attracking and keeping top people because it pays so much less than private business.
The hike that Reagan how opposes would have increased Cabinet members from $69,630 annually to $81,328. The pay cap imposed by Congress froze the salaries of all federal officials who earn $50,112 or more.
Congress has the authority to vote any pay raise it wants and Reagan's recommendation has no legal effect. In the present political environment, however, it seems certain to kill the raise, officials said.
White House press secretary James Brady said the president is sympathetic to the problems of the top federal employes and will examine ways to increase their salaries at some point before the next scheduled, quadrennial review in 1984.