President Reagan had to give more ground last week than in any of his previous budget battles with Congress. Nevertheless, the spending blueprint approved early Friday by a narrow Senate majority is viewed by many politicians as a further step in Reagan's restructuring of national policy.
It also is viewed as the most he could expect to get under the circumstances.
In accepting a defense figure for next year that he previously had labeled "irresponsible," a one-year freeze on Social Security benefits that seemingly violates a campaign pledge, and the continuation -- with reduced funds -- of several transportation, business and agriculture subsidies he had tried to cut off, Reagan showed that his 49-state reelection victory six months ago gave him much less clout on Capitol Hill than his initial win in 1980.
Political scientist Austin Ranney, an American Enterprise Institute Democrat, said he viewed the Senate vote as "the first, clear, unmistakable manifestation of the 22nd Amendment effect" -- a loss of leverage because the president cannot run again. "It's more and more evident," Ranney said, "that the revolutionary part of 'the Reagan revolution' ended in 1981," when Congress approved Reagan's first budget and three-year tax-reduction plan.
The most dramatic evidence for that was Reagan's reluctant acquiescence to the Senate's decision to give the Pentagon no increase above inflation -- a figure the president earlier called "irresponsible."
But even at that level, defense appropriations next year would rise $10 billion and actual outlays increase by $20 billion. And, as the accompanying chart indicates, if the Senate-approved budget becomes law, the large objectives Reagan set forth at the outset of his presidency will be intact: Measured against the gross national product, federal domestic spending will be down, defense spending up and the tax burden lower.
In addition, this budget would begin to shrink the deficits that represented one of the major policy failures of Reagan's first term and a threat to the continued prosperity essential for future Republican victories.
Some of the assessments offered yesterday clearly had a partisan tone. Edwin L. Dale Jr., spokesman for budget director David A. Stockman, said the termination of 13 domestic programs and cutbacks in dozens of others represent "a giant step forward . . . in some respects, beyond what we could do in 1981."
At the other end of the spectrum, Sen. Gary Hart (D-Colo.), a presidential hopeful last year, said, "If you believe, as I do, that Ronald Reagan's hidden agenda has been to dismantle the Great Society and as much of the New Deal as possible, then this is a regression -- if not a reversal -- for the administration. They've come up against a stone wall of resistance in their own party, when they have to call in the vice president to break the tie. They had a desperate juggling act to salvage anything."
But most legislators of both parties saw the outcome not as a repudiation of the president but as evidence that he -- as much as they -- must respond to a public opinion concerned about deficits but insistent that defense be included in any cutbacks.
In this view, the outcome was foreordained by the November election results, which saw the Republicans lose two seats in the Senate and fall eight or 10 seats short of gaining working control of the House (with help from conservative Democrats), despite Reagan's sweeping personal victory.
The narrowness of the Senate majority, and the fact that 22 of the 53 GOP seats are up next year, made it certain that Reagan would have to adjust his goals to meet the political priorities of those senators.
A dozen or so moderates, who were key to Sen. Robert J. Dole's (R-Kan.) squeaker election as majority leader last December, gained special leverage, and they made it clear that defense would have to share in the budget discipline for them to go along.
But middle-ground Republican opinion was not much different in the House, where Minority Leader Robert H. Michel (R-Ill.) said in December that Reagan "has gotten the message from people he's relied on in Congress that unless there's some give there in defense , it's kind of unrealistic to expect that you can do the other things."
Reagan's leverage with the Senate was reduced, according to several GOP senators, by the controversies surrounding his European trip and his Nicaraguan policy -- and by his slump in the polls.
According to one White House official, Dole was "pretty blunt" in telling Reagan aides last week that "the president better endorse the package we've put together, because he can't take another defeat right now and the economy can't stand seeing the effort to cut budget deficits fail."
In the eyes of many Democrats, however, even if Reagan signed on with a proverbial gun at his head, he still may be able to turn the budget battle to advantage for himself -- and his party.
"It's a setback for Cap Weinberger [Defense Secretary Caspar W. Weinberger]," said former House Budget Committee chairman James R. Jones (D-Okla.). "But I think the president is aligned almost perfectly with public opinion as it stands. Some form of freeze, including the military, is the only thing that's politically viable."
"Reagan's got the upper hand now," agreed Sen. Ernest F. Hollings (D-S.C.). "The Senate kept him from destroying some of the programs he wanted to destroy, but now he's got the Democrats under the gun."
In political acknowledgment of that, House Budget Committee Chairman William H. Gray III (D-Pa.) has promised to bring to the House floor within 10 days a package that at least matches the Senate's reductions and -- in conformity with Reagan's insistence -- does so without raising revenues.
It is clear that the Social Security freeze question is even more sensitive politically for House members -- all of whom face the voters next year -- than it was for the senators or the second-term president.
Gray has neither endorsed nor ruled out some limitation on benefits, and Republicans are divided. Lott has said he and most other House Republicans oppose the Senate freeze, but Rep. Dick Cheney (R-Wyo.) said he thought "combining the Social Security freeze with a freeze on defense probably would get a majority of House Republicans. That's the tradeoff in a lot of minds."
With all but one Senate Democrat having opposed the budget -- and many of them reveling at the prospect of making the Social Security freeze a partisan issue in 1986 -- many if not most House Democrats would have to support such a freeze to make it politically palatable for the Republicans.
But the Senate vote greatly improved chances for early congressional approval of a budget package promising substantial reductions in future deficits. And -- putting aside the specific tradeoffs -- that prospect is immensely cheering to Republicans.
The deficit issue has been the biggest cloud on the Republicans' horizon. Reagan tested the loyalty of Republican senators by asking them to cut programs important to their constituents while pressuring them to exempt defense.
Even after his last-minute concession on the Pentagon budget, four Republican senators -- all of them up for reelection next year -- voted against the measure.
But all the rest were given enough concessions by Dole and Budget Committee Chairman Pete V. Domenici (R-N.M.) that they could defend the package at home and still wind up on Reagan's side.
Senate approval of the budget triggered a boom on Wall Street, reflecting a belief that long-term interest rates may now decline and strong economic growth resume. Republicans need a healthy economy in 1986 to avoid the political losses that the party in power has suffered in the middle of most past presidents' second terms.
Breaking the logjam on the budget also speeds the day when the legislative decks will be cleared for consideration of the administration tax-simplification proposal, a measure many Republicans see as their best hope for cementing the loyalties of a majority of voters.
"The process is obviously not over yet," said A. James Reichley, a Republican political scientist at Brookings Institution, "but I think the Republican position has been strengthened, in a sense, even more than Reagan's. It gives Republicans reason to think they will continue in power."