It would be impossibly generous to say that President Reagan won the presidential election and the fights over his budget and tax bills because of his compelling vision of American society, but it's not fair, on the other hand, to credit everything to his being good on television. Reagan has been able to put together, in rough form, an argument that most Americans will do better in a society made somewhat more rigorously capitalist by him. Tax cuts will stimulate investment, which will bring down the unemployment rate; social-program spending cuts will bring more people into the private economy, to their ultimate benefit.
Some of the people around Reagan--Martin Anderson, David Stockman, and their spiritual adviser George Gilder, for example--have articulated these ideas in great detail. They argue in particular that social programs create strong disincentives to work, and so turn people into dependents of the state. If you believe this, then you are in the fortunate position of being able to say that budget cuts will actually help the people affected by them, by making them more independent. So while for decades the mainstream Republican budget-cutting argument derived from Robert Taft's Midwestern burgher's discomfort with debts and handouts, now the argument carries the force of what was always exclusively the liberals' emotion, namely, compassion.
The main question about the budget and tax cuts, to be answered fully only by mastering their every stupefying detail, is whether they are in fact consistent with this view. Do they really provide people with greater incentives to plunge into the bracing cold waters of free enterprise? Or are they merely stingy?
Let's take as a test case a program that is impossible for anyone without a vested interest in it to defend with any ardor or conviction: Trade Adjustment Assistance, which this year will pay $1.7 billion to 400,000 workers who have lost their jobs, supposedly because of foreign imports. Once an auto worker is laid off, he is of course eligible for six months of unemployment; if he lives in a state above a "trigger" level of unemployment (like Michigan), he gets another 13 weeks. For those 39 weeks, Trade Adjustment Assistance supplements unemployment up to a level of 70 percent of the worker's old weekly wage. Then, after unemployment runs out, Trade Adjustment Assistance continues at the 70 percent level for another 13 weeks; and then, if the worker signs up for a job-training course, it lasts yet another six months. That's a year and a half of generous, tax- free benefits in all.
An honest liberal ought to be troubled by Trade Adjustment Assistance because it so vastly favors one group of the needy (and a comparatively well- protected group at that) over all others. If a forklift operator loses his job, he has to make do with unemployment and then welfare, much less money for much less time. An honest conservative ought to be troubled by it because it's a classic case of an incentive not to work.
The two major studies of the program--by the General Accounting Office and Mathematica Policy Research--are quite explicit on this point, and you can go to Detroit and see it for yourself. Times there turned really bad in the fall of 1979, and non-union blue-collar workers, their unemployment money long gone, have begun to stream out of town "Grapes of Wrath"-style, bound mainly for the big cities of the Southwest. But the laid-off auto workers, whose trade adjustment is still coming, are staying, though most of them have little hope of getting their jobs back. They sign up to be "retrained" for jobs they'll never get in Michigan so they can keep their benefits for six more months. Trade Adjustment Assistance is encouraging them not to adjust to their economic dislocation.
Early on in the Reagan administration the news leaked out that Trade Adjustment Assistance would be cut substantially, by $850 million next fiscal year. Presumably that meant the auto workers would be cut off when the next fiscal year began, and that they would begin to move south, thereby making the tradeoff that is at the heart of Reaganism--giving up the security of a union and a social-democratic state government, getting in exchange a Sunbelt economy so much more vibrant that it would have jobs for them where Michigan did not. What happened to them-- whether being kicked out of a federal program would ultimately help them--would be a fair test, in miniature, of the president's basic idea.
But look at the cuts more closely, and it becomes clear that what happened to Trade Adjustment Assistance wasn't that at all. The administration reduced the amount of benefits, so that trade adjustment will be exactly as munificent as unemployment compensation--about 50 percent of the previous weekly wage instead of 70 percent.
The length of the benefits, however--that year and a half--remains exactly the same, and so there is no change in the incentives for laid-off auto workers. The program is still, even at its reduced level, vastly more generous than welfare, and more to the point it pays nearly as well as a non-union job in Houston. The monetary and psychological cost of moving being what it is, people on Trade Adjustment Assistance will stay in Michigan, and the cuts in the program will have the effect of old- fashioned Republican stinginess, not new-fashioned Republican capitalist generosity.
Trade Adjustment Assistance is just a tiny line among hundreds of others in the new budget, and every aspect of the budget is surely easier to master than any aspect of the tax bill. Who knows exactly which principles are contained therein? Maybe it is just this one item that is unfaithful to the rhetoric of more incentives, less dependence and movement to the pure private economy. Maybe there are four such items, or 57, or a thousand. Never mind, for the moment, whether Reaganism will work in the long run; somebody ought to do the work of finding out exactly what it is first.
Nicholas Lemann is executive editor of Texas Monthly.