Interrupting the late afternoon solitude of his mountaintop ranch near here Friday, President Reagan delivered the last word on an issue that had flared over the long holiday weekend into a major political embarrassment for his administration.
As sullen White House officials expressed chagrin at disclosure of a staff proposal to tax unemployment benefits, Reagan talked by telephone Friday with White House counselor Edwin Meese III. The president said that he had seen newscasts about the furor it had caused and that he wanted to bury the notion that he would further burden the jobless when unemployment had risen to a 42-year high.
"This is not the type of thing I want to do," Meese later quoted the president as saying. "He was surprised at all the fuss since he hadn't even considered it yet," Meese added.
But the president's veto of the idea came too late to undo damage done by a proposal that had in fact been revealed and commented on by senior members of his own staff. Their missed signals and the rest of the episode shed light on how detached Reagan is from the policy detail of his administration and how awkwardly that policy is sometimes developed and made public in his White House.
White House spokesman Larry M. Speakes said today that Reagan first learned of the controversy while at Rancho del Cielo from newscasts and a telephone conversation with Meese. But the option paper that set the brush fire was delivered to the president's desk earlier in the week in preparation for a meeting.
"Whether he looked at the paper, I don't know," Speakes said. "Sometimes he does, sometimes he doesn't" read such option papers in advance of meetings, Speakes said.
The 16-page outline of eight possible remedies for unemployment was supposed to be considered at a Tuesday morning session of the Cabinet Council on Economic Affairs, Meese said. According to Speakes, the options were developed by an administration task force representing the Treasury, Labor and Commerce departments, the president's Council of Economic Advisers and the White House staff.
But on Monday, consideration of the option paper was scratched from the agenda because the 5-cent-a-gallon gasoline tax increase was to be taken up instead. That last-minute decision, however, was not reflected in the White House paper flow.
Cabinet council documents are routinely distributed to Speakes who took this one with him when he departed with the president for California Tuesday afternoon.
Speakes and White House staff members assumed they were coming to Santa Barbara for a leisurely vacation while Reagan rested at his 688-acre ranch before his trip next week to Latin America. This impression was reinforced when Speakes told reporters he would conduct only one official briefing during the six-day ranch visit.
But those expectations were soon dashed. Aboard Air Force One to California, Speakes hinted to pool reporters on the president's plane that Reagan was considering "other" options to fight unemployment besides the gasoline tax increase and accelerating the third stage of the personal income tax cut.
The next day, at what he thought was to be the lone briefing, Speakes told reporters that the president was considering these other options in the context of proposals he would make to Congress in January.
On Thanksgiving Day, Speakes informally answered reporters' questions and confirmed a report that Reagan was considering a tax on unemployment benefits.
Speakes offered more details, saying the proposal had been developed by a task force from various federal departments and that it would make joblessness "less attractive" while encouraging the unemployed to seek training for new skills.
Although Speakes normally would query one of the president's top advisers for "guidance" about such a potentially explosive proposal, Speakes said he did not do so this time. Meese was celebrating the holiday in Santa Barbara with his family, and White House chief of staff James A. Baker III was spending Thanksgiving at his Texas ranch.
Speakes said he felt that he had to talk about the unemployment option to "put it in context."
The result was that the proposal, in the words of another official, quickly gained a "life of its own." Democrats and labor figures gleefully lined up on television to portray Reagan as a Scrooge who would place additional burdens on the nation's 11.6 million unemployed.
Even as they did so, however, the president was not in a position to read the document that had caused the fuss. Meese said that, when the Cabinet council meeting agenda was changed, the options paper was set aside in the Oval Office, and that the president most likely did not bring it to California with him.
On Friday, when it appeared that the idea of taxing unemployment had become a new embarrassment for the administration, Meese told several reporters that it really was not under serious consideration. But in an interview with CBS News he seemed to keep the idea alive.
"We do know that generally when unemployment benefits end, most people find jobs very quickly after that point," Meese said. "So whether this tax proposal would be an incentive . . . there are many families, for example, who -- because of more than one wage earner in the family -- are earning almost as much on unemployment as they would in their regular jobs."
But Meese also told other reporters that the tax on jobless benefits was not a serious option and that it had been developed only by a low-level "working group."
No one at the Western White House was willing to claim authorship of the ill-fated proposal today or pinpoint its genesis.
While it was discussed only privately by White House officials, events of the last few days underscored the sometimes awkward process by which policy is being shaped in the White House.
This process is the result of the early decision to give Meese control over the policy apparatus while Baker runs legislative, political and press operations. Occasionally, the two and their staffs appear to be working entirely separately.
Thus, while some White House policy writers under Meese apparently found merit in a tax on jobless benefits, it went to the president apart from the vital question about its political wisdom.
The vacuum was not total, however. The option paper included a warning to the president that taxing unemployment benefits was likely to prompt a strong negative outcry, a White House official said.