I spent a miserable weekend, worrying. And since I cannot shake the worries, I am going to share them. That is the kind of generosity that comes naturally to those of us who are stuck in Washington in August.
I have been driven to the brink,of despair by one of my favorite papers, The Wall Street Journal. I believe in The Wall Street Journal because I see all those successful corporate executives on the Journal's TV ads who owe it all to reading The Journal. They are my role models.
Last Monday, I picked up my Wall Street Journal and turned, as usual, to the front-page column called "The Outlook." I read a sentence that knotted my stomach: "After laboring and lobbying for the tax bill, some businessmen are wondering if they got more than they wanted."
More than they wanted? I read on, shaking: "Businessmen wanted a corporate tax cut that would encourage capital spending. They got most of the faster write-off of buildings, machinery and vehicles that they were seeking. But along with it came a personal tax cut of 25 percent over 33 months that many executives worry will give birth to a huge federal deficit over the next few years. That unwanted offspring could bring on either continued inflation or high interest rates, or both, businessmen say. As if that weren't enough to worry about, some fear that the effort to control inflation by restricting growth of the money supply is already causing a sluggish economy that may persist for several more years."
On my gosh, I thought, they're talking about Kemp-Roth. A shudder went through my frame. For The Wall Street Journal to express doubts about Kemp-Roth is, as Mort Sahl said of another famous switcheroo, "like Steve Canyon repudiating Milt Caniff."
For longer than I can remember, The Wall Street Journal has told me and millions of others that Kemp-Roth is the cure for what ails us. Now, just as President Reagan was about to sign it into law, they were telling me--in the front-page words of Ralph Winter-- "Few executives accepted the Kemp-Roth concept that the government would get more revenues from lower tax rates."
I was still recovering from this shock when The Journal hit me again on Wednesday morning. The lead story in the paper was headlined: "Budget Blight. Economic Slow-down Could Widen Deficit, Some Reaganites Fear. Tax Revenues May Plunge; High Interest Rates Lift Cost of Financing Debt."
The story was as bad as the headline suggested. Lawrence Kudlow, chief economist at the Office of Management and Budget and a leading supply-side theoretician, was quoted as saying, "There's a growing risk that weak economic activity will generate revenue levels that fall below our forecasts."
I was panicky enough by this time to consider sending the president a telegram asking him to veto the whole thing, but decided that was futile. Sure enough, the next day he signed the budget-and-tax- package, citing some figures that had not been heavily publicized before.
"This represents $130 billion in savings over the next three years," he said, "and $750 billion in tax cuts over the next five years." There seems, I said shrewdly, to be a slight $620 billion gap we're going to have to make up in two years. And then I threw up.
I was still queasy on Friday morning when I picked up The Journal and saw that the first item in the invaluable "Washington Wire" was this: "Economic worries descend on Reagan even after budget and tax cuts. . . . Concern grows that interest rates won't fall much any time soon. . . . Reaganites find budget pressures mounting. . . ."
I tried to call my broker to sell both stocks, but he was, of course, on vacation. So I went home to bed.
While in bed, I read the transcript of the president's press conference after the bill-signing, and I noticed he had said that Congress had put "additional reductions" into the tax package that might add to the deficits.
Suspecting a partisan plot, I called a friend at the Democratic National Committee and screamed at him: "How could you guys destroy my dream by loading down the tax bill with cuts even The Wall Street Journal thinks excessive?"
"It wasn't us," he said. "You remember that line Reagan used to use about the Panama Canal?"
"Of course," I said. "I taught it to my children like any good American would do."
"Well," he said, "we've got a little variant we use about the Republicans and Kemp-Roth. We say, 'They bought it. They paid for it. And we're not going to let them give it back.'"
Sobbing, I hung up