Reagan Says All Aboard

But his ark faces rough sailing on the tax hike

In a whirlwind of high-pressure politics, Ronald Reagan was waging the most perilous and difficult fight of his presidency. The stakes were high. If he failed to persuade Congress to pass a deficit-checking $99 billion three-year tax hike, the already swollen tide of red ink in the federal budget would rise even higher, swamping hopes for economic recovery and threatening deeper recession. Politically, a President who seemed to have a magic wand for passing major legislation would have shown that he could no longer control even his own party on Capitol Hill. The myth of the Great Communicator's persuasive powers would be punctured and his leadership gravely impaired.

No one was more aware of the risks than Reagan. He drafted a prime-time TV speech to be delivered this week if the House and Senate are ready for a showdown vote on a tax and spending-cuts package that no one really likes. He postponed a vacation trip to California so he could have chummy chats with more than 150 legislators in the Oval Office and at Camp David. He sent letters to some 5,000 business leaders across the nation, seeking their support. He had the Republican National Committee dispatch some 30,000 pleas in his name for local party leaders to rally behind him. He taped TV spots to be aired in 30 regions in a $400,000 ad campaign by the committee. Overzealous aides even hinted that Republican campaign funds might be withheld from G.O.P. legislators who bucked the President. Reagan disavowed the threats, but the warning hung in the air.

The tax increase, Reagan argued, is a bitter pill the nation must swallow to keep economic ills from worsening. He conceded at a Republican rally in Billings, Mont., that budget deficits are at the core of the problem. (Even if Congress approves the tax bill and adds $21 billion in fiscal 1983 revenue, the deficit is expected to be as high as $150 billion.) "For a conservative President like me to have to put his arms around a multibillion-dollar deficit is like holding your nose and embracing a pig," the President admitted. But the way to get a grip on the "slippery" deficit, he declared, was to raise revenues. It is "the price we have had to pay" to get more spending cuts through Congress. Reagan placed the blame on past Administrations, declaring, "If I could correct 40 years of fiscal irresponsibility in one year, I'd go back to show business as a magician. You know, that might be more fun, pulling rabbits out of a hat than jackasses out of the way in Washington."

Unlike last year, when he had to win the support of liberal and moderate Republican "Gypsy Moths" for his tax and spending cuts, Reagan this time was busy wooing rebellious conservatives. He quickly turned around Lyn Nofziger, his former political aide, who had instigated a meeting with New York Republican Congressman Jack Kemp and various New Right ideologues to plot against the tax increase. But Reagan could not budge Kemp, whose political future seems tied to the fate of the supply-side economics that he has long championed. "Jack," the President told him last week, "I wish you were with us on this." Said Kemp later: "We've just agreed to disagree."