Without fanfare, President Reagan this week tacitly acknowledged that his economic program has not panned out as promised, and to some extent has shifted policy.
He did this when he and aides during their budget negotiations with leaders in Congress accepted a worksheet showing the federal budget situation has worsened to the point that without any spending cuts and tax increases, the 1983 deficit likely would hit $182 billion.
That is $36.4 billion further into the red than the White House estimated when Reagan sent the budget to Congress only two months ago.
And it is an admission of the failure so far of the president's economic recovery program. There is good economic news: inflation has come down more rapidly than even the administration expected. But the bad news is that this has happened only because of a severe recession that took Reagan and most of his advisers by surprise.
On the key issue of economic expansion, his economic policy has fallen far short of what was promised.
In his speech to the nation last night, Reagan sought to place the blame for the dire state of the economy and the budget dilemma on the Democrats.
In the Democratic reponse, Rep. Richard Bolling (Mo.) argued essentially that it is the fault of Reagan and his policies.
The president had been counting on the large business and individual income tax cuts he pushed through Congress last year to spark an economic boom. That boom, which was to have begun in the second half of last year, was supposed to generate new tax revenues, so that in a sense the tax cut would pay for itself.
And these new revenues, coupled with the deep cuts in domestic spending which Congress also voted at Reagan's behest, were supposed to allow simultaneously a string of huge annual increases in defense outlays and rapidly declining budget deficits.
In the budget negotiations and in his speech last night, however, Reagan acknowledged not only that next year's deficit would now be $182 billion without higher taxes or more spending cuts than they first called for, but that those for 1984 and 1985 would rise to $216 billion and $233 billion, respectively.
A year ago, when the forecast was for boom and not recession, the 1983 figure was supposed to be only $22.9 billion in the red. In 1984, Reagan predicted, the nation would have a tiny $500 million surplus, the first in 15 years.
The administration has glossed over all of this in its post mortems on the budget talks. But the Democrats have also glossed over an important fact: there were a lot of Democratic votes for last year's tax cuts and defense increases, too.
On some issues last year, Democrats did oppose Reagan, at least at first.
On the tax side, Democrats added some cuts the administration had not proposed, but in both the House and Senate most Democrats opposed the 10 percent cut in individual taxes demanded by Reagan for 1983, one of the main points on which the budget negotiations foundered this week.
On the spending side, Democrats generally went along with the president's proposed military buildup. At the same time, they helped rearrange some of his domestic cuts, but in total reduced spending by nearly as much as requested.
In any case, 1982 is turning out to be a far different year economically than Reagan promised when he proposed his economic recovery program last year.
Conceivably, a sustainable economic recovery will begin later this year, but it will not be led by any surge in business investment such as was supposed to be launched by the large "supply-side" tax cut Congress passed.
Instead, the administration is hoping consumer spending and housing will provide the initial impetus for recovery.
The average unemployment rate for 1982 probably will be about 2 percentage points higher, or 9.2 percent rather than 7.2 percent forecast. That means the number of unemployed workers will be about 2.2 million higher than forecast. The unemployment rate for April is widely expected to set a new post-war record of more than 9 percent when it is announced next week.
The gross national product, adjusted for inflation, is likely to be about 4.5 percent lower than forecast. Economic growth between the fourth quarter of 1981 and the fourth quarter of this year probably will be about 0.8 percent instead of the 5.2 percent initially expected.
The interest rate on three-month Treasury bills now is about 13 percent and has generally been that high or higher all year. The administration assumed interest rates would follow inflation downward with T-bills averaging 8.9 percent this year.
One reason there is no investment boom in prospect, despite large business tax cuts, is that the recession has pushed use of existing productive capacity down to unusually low levels. In addition, before-tax corporate profits may be as much as $90 billion lower this year than the $277 billion the administration forecast.