The White House has launched a broad "mid-term review" designed to provide an agenda for the second half of President Reagan's term and highlight changes needed in administration policies, officials said yesterday.
Edwin L. Harper, assistant to the president for policy development, said the review probably will not call for major changes in the administration's current economic program but will produce a new list of proposals for Reagan to pursue after the November elections.
"It's not a rethinking of the philosophy of the administration , but a refocusing of what we're doing and our program priorities," Harper told a breakfast meeting of reporters.
He said the review would identify any "necessary adjustments," but he said Reagan's economic policy "is probably a pretty stable element, and I wouldn't anticipate major changes there."
"In any administration, you have an intellectual backlog of research from the campaign you're using in the first year. You're running on that store of intellectual capital. But events change in the middle of the term," Harper said.
White House counselor Edwin Meese III said yesterday that the mid-term review would "develop an agenda for the next two years" and is being launched with the idea of adding to proposals Reagan has made. Meese said the effort is focusing on defense, economics, a yet-to-be-unveiled anti-crime program and earlier proposals for "New Federalism" and private-sector initiatives.
Meese said the assessment will involve the entire White House staff and is being carried out under Harper's office of policy development and by Richard Beal, the White House director of planning and evaluation.
Under examination, Harper said, is the flat-rate income tax, which would streamline the tax code by eliminating deductions, exclusions and credits, imposing a single, low tax rate for all taxpayers.
Reagan said earlier this week that the flat-tax idea is "very tempting" and "worth looking into," and the Treasury Department is studying its feasibility.
Conservative economist Milton Friedman first wrote about it in 1943, Harper noted. "I don't know if it's an idea whose time has come . . . but it has the virtue of simplicity and it deemphasizes people making decisions for tax reasons. . . . It might be the ultimate supply-side tax cut."
Budget director David A. Stockman raised the possibility a few weeks ago that Reagan might propose moving toward the flat-rate tax in next year's budget proposals, but Harper threw cold water on that timetable. "I would not forecast a major change like that . . . ," he said.
Harper said Reagan will support the $21 billion in tax increases over three years that the Senate Finance Committee has approved, even though "emotionally he would prefer not to see any tax increases." Reagan will also back the controversial proposal for withholding of taxes on interest and dividends, Harper said.