The 98th Congress, hobbled from the start by soaring deficits, deep recession, political divisions and a White House struggling to regain its footing, opens for business Tuesday with optimism for a Social Security accord and pessimism about nearly everything else.
The agenda ranges from defense, trade and foreign aid to jobs, taxes, social-welfare spending, immigration and environmental controls--mostly issues that dominated the 97th Congress, with a few added starters such as campaign financing reform.
Nearly every issue is complicated by economic and budget considerations: either the recession or the deficit, or both. But the climate in which they are being considered this year is a far cry from what it was when President Reagan came to town two years ago. Gone is the heady optimism with which Republicans took control of the Senate and effective command of the House in 1981 and set about carrying out the Reagan revolution, with big tax and domestic spending cuts coupled with a huge military buildup, over sputtering objections from down-and-out Democrats.
In its place, after wrenching economic and political changes, including Democratic recapture of actual control in the House, is what Senate Finance Committee Chairman Robert J. Dole (R-Kan.) calls "a good deal of realism" about "very limited options" for steering the country toward a long-delayed recovery.
There is a Catch 22 to the congressional agenda: members feel strong pressure to spend to stimulate recovery and relieve the effects of recession, but spending adds to the deficit, and big deficits, especially long-term ones, are widely believed to impede recovery. Moreover, while many believe that the Reagan prescription for recovery through tax cuts has failed, they are just as queasy about raising taxes during a recession.
"1981 has passed," Dole said last week in summing up the new era of restrained expectations.
As members return from a three-week recess following the formal convening of the new Congress Jan. 3, the one bright spot is the agreement reached nine days ago by a special bipartisan commission on Social Security financing, which, along with the budget, is expected to dominate the first few months of the new session.
Leaders of both parties have expressed at least flickering hopes that the commission's agreement, blessed by Reagan and leaders of both houses of Congress, will set the tone for sufficient bipartisanship to avoid confrontation and paralysis on other issues, especially the budget. Even before the president's State of the Union address, to be delivered to a joint session Tuesday night, and his budget, due to be submitted the following Monday, Reagan and congressional leaders of both parties were sending out bids for such cooperation.
If the success of the Social Security commission's work is a carrot for cooperation, the specter of deficits of $200 billion or more through most of the 1980s is the stick forcing serious talk of coalition-style leadership on major issues. That was tried successfully with the gasoline tax increase late last month.
As deficits mount, "the strategies for dealing with them narrow," said House Majority Whip Thomas S. Foley (D-Wash.) who, like Dole, fears a kind of govermental gridlock without accommodation between the two chambers and between Congress and the White House. All are in a position to checkmate each other.
But some congressional sources were saying late last week that failure by Reagan to follow through with substantive concessions, especially restraint in defense spending and easing the squeeze on programs for the poor, could shatter the fragile spirit of cooperation.
Even with politically distasteful concessions from all sides, however, there is little hope of significant deficit reductions without economic recovery, despite warnings that big deficits will thwart recovery. "In the absence of recovery, there's not much you can do about the fiscal '84 deficit," Foley said.
On taxes, the administration is expected to continue resisting increases, except for a standby hike starting in fiscal 1986 that would be triggered if annual deficits continued to exceed $100 billion. But even key congressional Republicans do not like the standby tax, and Democrats are talking increasingly of adding to anticipated revenues by jettisoning the 1981 law that indexes taxes to inflation after 1984.
Possible but less likely in light of the recession is a move to roll back the 10 percent income tax cut scheduled for July.
The administration is expected to propose more cuts in domestic spending while embracing only modest restraint in defense spending. But, with the 26-seat Democratic election gain in the House and increasing restiveness by Senate Republicans, Congress is expected to push for more of a squeeze on defense and less on social-welfare spending.
Some restraint on health costs and cost-of-living increases for benefit entitlement programs, especially retirement, are considered likely, however.
Republicans and Democrats are discussing job-creating and recession-relief initiatives, seemingly more along that line than the administration has in mind.
In a significant sign of the times, Dole and Democratic House leaders are working on legislation to help protect laid-off workers who lose health-insurance benefits when they lose their jobs. Public works jobs, job retraining and possibly aid to recession-crippled local governments are among job-creating options under study. So is yet another extension of unemployment benefits.
Job losses have rekindled a protectionist fire on Capitol Hill, the "greatest I've seen in 18 years in Congress," Foley said. It may lead to new restraints on imports, such as reciprocal sanctions against so-called unfair trade action by other countries. Legislation requiring more "domestic content" in cars sold in this country will be pushed again.
The economy also could play an increasing role in continued debate on reauthorizing the Clean Air and Clean Water acts as recession-hit industries square off against strong environmentalist forces in Congress while maintaining pressure for relaxation of costly environmental controls. Concern about added competition for jobs in shrunken markets also will be a factor in renewed consideration of major immigration law revisions.
Similarly, with the recession eclipsing energy as a problem, more talk is heard of controlling soaring natural-gas prices than accelerating their decontrol, for which there was a big push just a couple of years ago.
Interest rates are a sleeper issue, with some Republicans and Democrats hinting at action to bring pressure on the Federal Reserve Board if interest rates start rising again.
The two environmental bills and immigration-law revisions are prime examples of the heavy load of major issues remaining from last year, squeezed out in part by preoccupation with budget and other economic matters. But they are not the only ones.
Pending, among other measures, are authorizations for housing (the administration wants to phase out subsidized housing in favor of voucher payments to the poor), the Legal Services Corp. (the administration wants to kill it), the Federal Trade Commission (doctors want to end federal regulation of their profession) and trade and tax aspects of the president's Caribbean Basin Initiative. The tenure of bankruptcy-court judges also has not been settled.
On the farm front, the debate on pesticide controls has carried over from last year, and more debate is expected on tobacco and dairy price supports, along with farm-state pressure for help for bankruptcy-threatened farmers.
Revenue sharing also must be reauthorized and may be the vehicle for renewed debate on some aspects of Reagan's "New Federalism" program that fizzled last year in a dispute over how to divide the pie of federal programs with the states. Revenue sharing is popular in Congress but adds to the deficit.
The cutting edge of the New Right's "social issues" agenda, including abortion, busing and school prayer, has been dulled, although these topics undoubtedly will come up again. Reagan has lent his support to a new legislative effort on abortion and said he will renew pressure on Congress on the prayer issue.
In these days of $200 billion Reagan deficits, little is heard of the Reagan-backed constitutional amendment to balance the budget, although it, too, probably will get another push from its backers. Reform of the congressional budget process also is under study, and some changes, possibly far-reaching ones, may be recommended in the House.
Congressional campaign financing, not a big issue in the last couple of years, is expected to reemerge as some Democrats seek major revisions, including the possibility of public financing and restraints on political action committees.
Certification of El Salvador for human rights compliance comes up again shortly, leading off what could be increasing problems for the administration's foreign assistance program, especially military aid.
And the president's new arms control agency appointments, along with holdover controversies about foreign policy figures, could open the way for a major debate on Reagan's posture in arms negotiations with the Soviet Union.
Although they are nearly two years away, the 1984 elections are expected to play a major role on these and other issues this year. The Senate is brimming with possible presidential candidates of both parties, who will be posturing with an eye toward 1984. Democrats will be pushing to regain control of the Senate that year when Republicans will be defending nearly twice as many seats as Democrats.
In addition, both chambers could lose their top leaders, triggering a fierce leadership scramble. Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) has said he will not run again in 1984, and some Democrats believe House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) also may step down.