The Upstairs Presidency

By GEORGE J. CHURCH

The First Patient is healing, but his programs are ailing

The details of convalescence sounded reassuringly familiar to anyone who has recovered from major surgery. In his first week back at the White House after the attempt on his life, Ronald Reagan puttered around the second-floor bedroom and sitting room. He strolled in the Rose Garden and frequently visited the third-floor solarium to bask in the sunshine and admire the tulips that had bloomed while he was in the hospital. He took penicillin orally to guard against infection of the lung pierced by the would-be assassin's bullet. But that was Reagan's only medication. The President's personal physician, Dr. Daniel Ruge, found no need to conduct any extensive examinations on his twice daily visits. He merely performed brief checkups and asked the First Patient how he felt. "It sure hurts to get shot," Reagan told aides with a wry smile. Nonetheless, he ate heartily enough to begin putting back some weight and even asked when he could resume his regular calisthenics. With Ruge's permission, he gingerly began doing some bending and stretching exercises.

But there was some grimmer news too. Benjamin Aaron, the surgeon who removed the bullet at George Washington University Hospital, disclosed last week that the President had been losing blood so rapidly right after the shooting outside the Washington Hilton that he might have died if he had been taken to the White House rather than to the hospital. Moreover, Aaron confirmed that the bullet had lodged only an inch from Reagan's heart. That report had specifically been denied at the time by Hospital Spokesman Dennis O'Leary, who placed the bullet "several inches" away from the heart. O'Leary now says that he apparently misunderstood Aaron in the turmoil after the surgery. The only significance to the fact that the bullet was so close to the heart, O'Leary insisted, is that "the longer the track of the bullet, the more tissue that must be healed and the longer the period of recovery."

Encouraging though the President's convalescence has been, his top aides were offering no guesses as to how soon he would be fully back on the job. Reagan did increasingly turn his attention to affairs of state and even found time to see two distinguished visitors: NATO Secretary General Joseph Luns and New York's Terence Cardinal Cooke. The President also caught up on some of the routine proclamations that had piled up while he was in the hospital, and held discussions on important questions with his top aides. But the meetings were brief because Reagan tired quickly. One participant in a session dealing with the President's economic program reported that Reagan began alertly and was full of questions, but showed obvious signs of fatigue after half an hour. Meanwhile, essential decisions are being made but little forward planning is getting done. Says one White House adviser: "We're losing momentum, and it will be difficult to recapture."

The most obvious loss of thrust has been suffered by the economic program. At a White House meeting last week, Chief of Staff James Baker observed that the program was proceeding satisfactorily because even Democrats in Congress are now committed to substantial cuts in spending and taxes, as the President wants. Reagan dryly responded, "If things are going so well, how come I'm not jumping up and down?" He had a point. While he was in the hospital, the program suffered two setbacks: first, three conservative Republicans on the Senate Budget Committee joined Democrats in rejecting a budget resolution favored by the Administration; then leaders of the Democrat-controlled House outlined an alternative program that accepts the magnitude of Reagan's spending cuts but alters some of their targets and features a restricted program of tax reductions for one year only. Those actions reflect a deep fear in both parties on Capitol Hill that Reagan's proposal to slash income-tax rates by 30% across the board for three years would result in more inflationary deficits in 1983 and 1984.

The White House staff was incensed by the bolt of the conservatives on the Senate Budget Committee. The conservatives are seeking some assurance that the President will recommend spending cuts, beyond those already demanded for fiscal 1982, large enough to keep the budget from toppling into intolerable deficits in later years if Reagan's tax cuts are enacted. Although the White House wants the conservatives back in line, it is not ready to tell them what future reductions are in store. In fact, Reagan's top aides have not decided what further cuts they might recommend. Some targets are obvious. For example, cost of living increases in Social Security pensions might be reduced. But the President could not announce that idea now without incurring the wrath of elderly citizens whom he cannot afford to alienate. The defecting conservative Republicans might temporarily be converted: there is speculation that they would not have jumped ship if the hospitalized President had been able to make a person al appeal for their support. But their rebellion points to an unease among Reagan's own supporters that could cause trouble in the many future votes on his economic plans.

Topic A around the White House was how to respond to the Democrats' spending and tax plans. Oklahoma Democrat James Jones, chairman of the House Budget Committee, said that he had been approached by representatives of the Treasury Department to talk compromise. The White House quickly denied any such wavering of intent. "Why should the President compromise?" asked Treasury Secretary Donald Regan. "He is doing fine standing still." Vice President George Bush declared that Reagan's program must be passed "unsalamied"--meaning that it should not be subjected to the "salami tactic" of paring it down slice by slice. Bush also implied that Reagan would veto a bill cutting taxes for one year only. The President, in a statement issued on income tax day, April 15, asserted that Americans would go on paying "too much" in taxes unless his full plan was enacted.

Even to hint at a willingness to compromise at this time would be equivalent to throwing in the towel in an early round of a championship bout. The White House still has high hopes that a vigorous selling campaign will bring Congress around to voting something close to the full Reagan package. That selling campaign is hindered by the President's inability for now to join it personally, but it is still going forward. Conservative groups are planning a blitz of direct mailings, speeches and TV ads to build pressure for the full Reagan program in the home districts of wavering Congressmen--especially conservative Democrats who hold the balance of power in the House. Bush is supposed to travel from Maine to California this week promoting the package. The hard decisions on taxes will come if the blitz fails and Congress continues to be skeptical about the President's plans. Despite the official no-compromise hard line, talk of alternatives floats around Washington. There is speculation about a two-year tax cut, and Senate Budget Committee Chairman Pete Domenici of New Mexico has suggested stretching the Reagan tax cuts over four years rather than three to minimize the effect on deficits; this idea has attracted some Administration interest.

Treasury Under Secretary Norman Ture in an interview with TIME described a complicated alternative that the Administration might weigh if--but only if--it cannot get threeyear, across-the-board cuts in income tax rates. It is a "two-stack" plan that would involve taxing "earned" (wage and salary) income and "unearned" income (dividends, interest, rents) separately, at the same rates, with a 50% top on both. At present, unearned income is taxed at a maximum 70%, vs. earned income's 50% limit. Ture figures that the two-stack plan would promote the Administration's goal of spurring savings and investment.

Some Administration hard-liners are prepared to take a defeat on taxes; have Reagan sign into law a one-year, limited reduction; and then have the Republican Party fight the 1982 congressional elections on the ground that the Democrats prevented the President from righting the economy. Says one close adviser to the President: "We go out and run against the Democrats in 1982 because they did not give Ronald Reagan the program that he promised the American people in 1980. We are not afraid to lose this round. We are patient people; we know what we want." Which strategy to adopt is a choice that can be made only by Reagan himself. Advisers figure that the President can put off the decision until June, when Congress Begins voting seriously on a tax bill.

Other decisions also appear to be slipping. Among them:

>Secretary of State Alexander Haig sent the Japanese a letter, which other Administration officials learned of only last week, urging them "voluntarily" to hold auto exports to the U.S. to fewer than 1.6 million cars per year, vs. 1.9 million sold here in 1980. Both the idea of asking for a limitation and Haig's authority to set a figure are furiously disputed within the Administration. Says one official: "The Japanese are so confused right now that they have no idea what the Administration policy on auto imports is or who is supposed to be telling them what it is."

P: The White House by now was supposed to begin spelling out its ideas for transferring many programs from Washington to the states. Reagan made a start by proposing that many specific education, health and social programs now financed by Washington be eliminated. The savings would be turned into "block grants" that states, within broad limits, would be free to spend as they please. He was supposed to begin defining the new relationship between Washington and the states in a series of speeches to state legislatures beginning April 1.

P: The Administration is well aware that the 1980 census showed older cities losing population, and thus tax revenues, while remaining saddled with problems of crime, decay and declining services. But Reagan is determined to reduce federal aid to cities as part of his budget-slashing program. Nonetheless, the Administration knows that it must come up with new and imaginative ideas that do not involve more money to help the cities solve their problems. What those ideas might be cannot begin to be thoroughly discussed until Reagan recovers his strength.

Also awaiting presidential action is the U.S. grain embargo imposed on the Soviet Union after it invaded Afghanistan. Reagan promised in his campaign to lift the measure, but has held off doing so while Soviet troops were threatening Poland. Aides say he will probably lift the embargo in the next few weeks if the Polish crisis continues to subside.

All these troubles point to a fundamental problem: even an Administration dedicated to reducing Washington's role in American life needs a full-time working President to determine just what it is trying to do. Both advocates and opponents of his philosophy can only hope that the President heals rapidly so he can begin making decisions about long-range policy. Until then, they will not know exactly what it is that they are supposed to be debating.

--By George J. Church Reported by Laurence I. Barrett and Douglas Brew/Washington

With reporting by Laurence I. Barrett, Douglas Brew/Washington

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