DOES THE country really want to return to the social standards of 1963, or even 1970? Those are two dates that President Reagan's budget uses repeatedly in explaining the rising level of spending and the roaring deficit that has come with it. Take Social Security, Medicare and Medicaid; the budget terms them collectively "the social contract." In 1983, they provide income or medical care protection to nearly one-fourth of the American population compared with one-tenth in 1963, when, of course, neither of the medical programs existed. Why is a rise in federal spending deplorable, if it means that Americans are joining together through their national government to buy social insurance that none of them can get individually?
This budget is more than usually interesting, setting out with a degree of rigor the administration's view of its central preoccupation at the midpoint of its tenure. More sharply than the State of the Union message, it makes clear that the president's intentions remain unchanged. There is a rare concession that the tax cuts of 1981--the Great Potlatch--got badly out of hand. There is acknowledgment that the major social benefits are still rising. That disparity does not suggest to Mr. Reagan that there might be a fundamental flaw in his strategy. On the contrary, he announces that he will keep going after "non-defense" spending.
The Reagan administration keeps pointing out that military spending is significantly lower today, in relation to the size of the national economy, than it was 20 years ago. Over two years, the president has succeeded in pushing tax revenues down nearly to the 1963 level. It's the rest of the budget and above all the social benefits on which he blames the deficit.
There's a striking similarity between Mr. Reagan's budget troubles and those of other governments as various as the Thatcher right in Britain, the Mitterrand left in France and the transitional middle in Germany. All of the industrial democracies began to think, in the middle 1960s, that they had at last learned the secret of keeping the cornucopia flowing and maintaining extremely high rates of economic growth. What would they do with that wealth? Most of them decided to use it to buy security, and they built elaborate systems of social protection. But when the growth rates fell in the 1970s, gaping deficits opened. Ever since, these governments have been caught indecisively between the accustomed tax rates and the accustomed benefits. Mr. Reagan is not alone.
He argues that it would be impossible to balance the budget with military spending closer to the 1963 share of GNP, if social spending remains at the level of 1983. Raising taxes to pay for both would allegedly wreck the economy. But would it? If people want the social insurance, why not let them pay for it? Other economies have grown faster than this country's, with higher tax rates. And this year's deficit, the budget announces, will be more than twice as large as the one against which Mr. Reagan campaigned vehemently in 1980.