Buoyed and glowing over what they called "the most important week" of the Reagan presidency, top White House advisers predicted yesterday that the administration's budget victory on Capitol Hill will affect the U.S. economy favorably before year's end.
David A. Stockman, director of the Office of Management and Budget, said the stunning approval of the Reagan budget package by the House Friday will have "a major favorable effect on attitudes and expectations around the country, particularly the financial markets." Until now, he said, those markets "were skeptical" of the president's economic recovery proposals.
Stockman and presidential counselor Edwin Meese III declined to be specific about when or how much inflation and unemployment will be curbed, but both insisted that the administration's economic program is directly on target as a result of the triumph in Congress.
Stockman, Meese and White House legislative affairs director Max Friedersdorf, openly upbeat, magnanimous in praise of their congressional allies and conciliatory toward the wounded Democratic leadership, met with reporters yesterday to assess the events of a week they termed a vital turning point for the administration.
Meese quipped that final economic victory would occur "at 12:01 on the 15th of June, 1983," but then he and Stockman added quickly that economic recovery will occur only with more time and probably more anguish on Capitol Hill, where feelings in the nominally Democratic House were crushed by the Reagan steamroller.
Nonetheless, Stockman told reporters, "There is clearly a favorable momentmum in the economy in terms of inflation and the interest rate.Momentum toward 8 percent or less unemployment is clearly moving through the economy. These [legislative] steps will help accelerate those movements."
"The effect of yesterday [Friday's House vote] keeps us on course," Stockman said. "This meshes with the tax side -- we are heading toward a $770 billion revenue level in 1984."
Stockman and Meese repeated administration assurances that the budget restrictions, which still must be reconciled and fine-tuned by House-Senate conferees after the Fourth of July recess, will bring about a balanced budget in fiscal 1984.
By Stockman's arithmetic, additional savings approved by the House Friday, on top of those previously crafted by authorizing committees, will amount to about $19.1 billion in the next three fiscal years. Some of those savings, however, as much as $10 billion by some estimates, may be lost because of commitments made by the White House to achieve its victory.
The bulk of those savings will show up in food stamps, welfare payments, student loan limitations, lower subsidized housing starts, limited cost-of-living increases for civilian federal retirees, an end to the minimum Social Security payment and a phasing out of Social Security benefits to students.
The fate of some other programs remained unclear yesterday, just as had been the case in the House Friday, where members were forced to vote on a Republican substitute measure that had been hurriedly pieced together and that most had not had time to read or study.
The situation was so confused that Stockman was unable to provide reporters with precise budget papers because he said the entire reconciliation document has yet to be reviewed by his OMB staff. The House-adopted package was even more austere than the version drawn up by Democrat-controlled committees, knocking $37.7 billion from the budget.
Lost in the last-minute confusion and pressure late Friday, Stockman indicated, was an administration-sought cap on federal Medicaid payments to states, which would save an estimated $500 million. The cap proposal was not offered, but is expected to be included in the final measure hammered out by congressional conferees.
The administration officials yesterday claimed that Reagan, by attracting more than two dozen Democrats into his camp while holding onto GOP support, had established a significant philosophical coalition that will benefit the administration on future showdown issues in Congress.
Part of that accomplishment was achieved by Reagan's persistent use of the telephone to bolster wavering Democrats, mostly southern conservatives he called during floor debate and, in a number of instances, to offer political trades.
One major concession granted by Reagan to the southerners was a commitment to make a "serious reappraisal," as Stockman put it, of the administration's opposition to sugar price-support legislation moving through Congress. The Department of Agriculture has called the sugar legislation dangerously inflationary and unjustified for a generally affluent industry.
Stockman insisted, however, that the administration had granted other concessions all along the line, well before the budget debate reached its crucial stage in the House late last week.
He cited earlier concessions on energy assistance to low-income families, impact aid money for local school districts and changes in the administration's approach to reducing food stamps as examples of the president's willingness to compromise.
Democrats throughout the House debate had contended that those concessions were insignificant and, in combination with budget cuts the administration insisted on, would seriously affect the neediest Americans, notwithstanding the GOP pledge to maintain a "safety net" under social programs.
As Meese and Stockman were proclaiming the beginning of a major economic turnaround, several dozen picketers from social-action organizations here and in New York were marching outside the White House to protest the administration's budget assault -- a virtual everyday occurrence along Pennsylvania Avenue in recent weeks.
Among the marchers with signs were Gray Panthers from Montgomery County. They were passing out leaflets with critiques of the Reagan cuts in Social Security and other programs that serve children and the elderly.
"I'm disappointed the House voted for that package," said Shirley S. Markowitz of Silver Spring. "We're going to keep this up."
From inside the White House briefing room, no one was watching.