Interpreting the New Moderation

By Ed Magnuson

Congress and Reagan adjust their course by the voters' compass

From the cloistered political scientist spinning academic theories about ideological trends to the clubhouse party pro grubbing for fresh clues on how to elect future candidates, various experts will be mulling for months over the minutiae of the 1982 election returns. What matters in practical national terms, however, is how the politicians in power interpret the sentiments expressed by voters on Nov. 2, and how those millions of often clashing voices translate into calls for specific courses of governmental action. Last week there was an emerging consensus among leading politicians, based as much on intuition as solid evidence, about what a majority of voters want.

In broadest terms, White House strategists and leaders of both parties in Congress view the voter message as being aimed primarily at the nation's economic mess. The voters are seen as less interested in blaming anyone than in having something done about the situation. They want unemployment alleviated, the recession ended, the huge deficits curtailed--and they want this done without refueling inflation. That is a tall order, of course, but far from a controversial one. All politicians applaud those goals; the problem is how to reach them.

By the politicians' estimate, the voters are relatively unconcerned about ideology, wary of dogmatism and extremes, and interested solely in results. "They don't care about supply-side or Keynesian economics," explains one presidential aide. "They will be dissatisfied with either one until they see Government working for them, until they see a meaningful improvement in their lives." The lesson for Ronald Reagan, says one of his political strategists, is that the election pressures should nudge him toward a greater pragmatism but no abandonment of his basic course. What the voters gave the President, in this adviser's view, was "a good, strong tweak in the nose."

But what does that signify for specific economic policies? The politicians were drawing some tentative conclusions:

Unemployment. The rising national unemployment rate hurt Republican candidates more than any other single issue. One result of this political chastening has been a surprising bipartisan consensus on some type of federal jobs program. In the lame-duck congressional session starting Nov. 29, the Democrats plan to introduce a bill to create some 600,000 jobs by rebuilding the nation's decaying highways, bridges, sewers and mass-transit systems. Sponsored by Wisconsin Democratic Congressman Henry Reuss, chairman of the Joint Economic Committee, it would be financed by scaling back Reagan's planned increases in defense spending and curtailing portions of his 1983 tax cuts. At his press conference last week, the President seemed receptive to a similar program that had been proposed a year ago by Transportation Secretary Drew Lewis. It would support about 300,000 jobs and be funded by some $5 billion from a 5-c--per-gal. increase in the federal gas tax, which is now 4-c-. Reagan called this prospective rise a "user fee," and said he did not consider the Lewis plan a "job-creating proposal" as such. Indeed, with 11.6 million workers unemployed, these programs would be mainly symbolic gestures toward easing the problem.

Social Programs. There was no notable demand for a restoration of the Reagan budget cuts in social services. "This election was a call for moderation and modification, not for a return to old-style liberalism," conceded California Democratic Senator Alan Cranston, an old-style liberal. Agreed an aide to House Speaker Tip O'Neill: "The Democrats are wary of getting caught again in tax, tax, spend, spend." At the same tune, however, there was nothing in the election results to suggest that voters wanted deeper cuts in social outlays.

Defense Spending. Judging by their concern over stratospheric federal deficits and their lack of enthusiasm for slashing social programs much further, the voters seemed to be indicating a willingness to pare the military budget. At least that is the interpretation of congressional leaders in both parties, who would like to scale back Reagan's projected increase from 10% a year to 5%. Because inflation has cooled, they argue, the increase in real terms would be as large as originally planned. Reagan has been holding out for his specified dollar amounts, regardless of lowered inflation, but at his press conference he sounded as though he might be willing to yield. The Administration, he said, is looking to see "if there are savings that can be made" without setting back efforts to close the "window of vulnerability" that supposedly exists because of Soviet superiority in some strategic nuclear weapons.

Tax Cuts. Legislators see no clear signal in the election results of how voters feel about Reagan's impending third-year tax cut in 1983. Agreed one presidential adviser: "I don't think the American public said raise or don't raise taxes." To help close the deficit, Democrats hope either to cancel the cut or to limit its benefits to $700 per taxpayer, thus preventing it from helping high-income earners even more. Reagan seems determined to hold out against any further dilution of his tax program, after having gone along with a large tax increase earlier this year. Indeed, in discussing the possible increase in the gas tax, he stressed that "it isn't anything that would in any way reduce the incentive features of our tax cuts."

Political experts see the election returns as ambiguous enough to give legislators and the President considerable freedom in the tactics to be pursued in getting the nation out of its economic doldrums. But they read one demand as commendably clear: it is time for the politicians and the President to stop their partisan bickering and work together for the general welfare. Whether Democrat Tip O'Neill or Republican Ronald Reagan has fully heard that election message will become clear in the months ahead.

--By Ed Magnuson.

Reported by Douglas Brew and Evan Thomas/Washington

With reporting by Douglas Brew, Evan Thomas

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