Going Reagan Billions Better

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Arriving for his meeting with the G.O.P. congressional leaders, the President snapped to reporters that the CBO estimates were "phony." Later he retracted that stinging word and observed, accurately enough, that the CBO is projecting a continuation of existing economic trends that his program is designed to change. The opposite side of this argument is that Reagan is counting on a break in inflationary psychology that cannot be supported by figures. Nonetheless, congressional Republicans for the moment swallowed their doubts.

More important, they also swallowed Reagan's insistence that Social Security and veterans' benefits stay untouched. Privately, Administration officials conceded that cost-of-living adjustments eventually will have to be reduced if the President is to achieve his goal of balancing the budget by fiscal 1984. But for now the White House has decided it cannot afford to anger millions of the elderly and veterans. Says one top congressional Republican: "Eighty percent of these people vote, and it is a Republican constituency." Reagan himself told the G.O.P. leaders simply that he had made a campaign promise not to touch Social Security and veterans' benefits, and that was that.

So it was. When South Carolina Senator Ernest Rollings, ranking Democrat on the Budget Committee, moved the next day to chop $7 billion out of the $22 billion in cost-of-living increases likely next year, he lost by eight votes. The splintered Democrats could not prevent the Republicans from cutting Medicaid and unemployment compensation and other social programs $200 million more than Reagan had requested, and all but four went along with a move by Kansas Republican Nancy Kassebaum to lessen a cut in the lending authority of the Export-Import Bank, a step that benefits big corporations.

The resolution this week goes to the Senate floor, where it should pass easily. Cuts in specific programs then must be approved again by committees that actually control those programs, but they will be under instructions to limit spending to the amounts specified in the big budget bill. Concedes Metzenbaum: "When all is said and done, the President will pretty much get what he wanted."

In the House, the controlling Democrats are no more eager for a knockdown fight than their Senate colleagues. Majority Leader Jim Wright of Texas asserts that the Democrats will have to adopt a majority of the spending cuts and then concentrate on cutting taxes by less than Reagan proposes. Says he: "The combination of these two will have to result in a deficit projection no larger than Reagan's." While the Democrats will try to narrow social-spending cuts just enough to soften the wrath of their constituents among the disadvantaged, they will give the President enough to escape public censure for blocking his program. Then if the program fails to spur economic growth and slow inflation, they will put the blame squarely on Reagan. With opponents no more combative than that, White House worries about loss of momentum seem highly exaggerated. —By George J. Church.

Reported by Douglas Brew and Johanna McGeary/Washington