Set for More of the Same

By William R. Doerner

Reagan sees his 49-state electoral blitz as a mandate for continuity

"You ain't seen nothin' yet," he crowed at every campaign stop. Ronald Reagan's signature line implied that he had big plans for his second term. But what were they? Not even his advisers seemed to know. They suggested that Reagan had not given any serious thought to the next four years, for fear of jinxing his re-election drive. Last week the President and his aides set about the task of writing a script for the second act of the Reagan revolution. The dramatis personae (George Shultz, Caspar Weinberger, Donald Regan, David Stockman), as well as the story line (Central America, arms control, deficits), had a familiar ring.

Reagan convened two full sessions of his Cabinet and set forth the broad goals for his second term. Said he: "In the election the people said they want more of what we accomplished in the first term. Our main purpose was to reduce the rate of increase in Government, and we're going to keep on down that line." The Cabinet sessions were interspersed with a series of intense budget meetings involving Secretaries Regan of Treasury and Malcolm Baldrige of Commerce, Budget Director Stockman and the President's closest White House aides. Reagan held a closed-door, 80-minute session with his two top foreign policy advisers, Secretary of State Shultz and National Security Adviser Robert McFarlane, receiving from Shultz a broad outline of proposals for U.S. initiatives abroad. The President also formally asked Shultz and Defense Secretary Weinberger to remain at their posts; both accepted without hesitation.

Reagan and his advisers realize that the first half of 1985 will be their best opportunity to win support for new legislative programs. By the end of next year, they figure, many lawmakers will be less susceptible to White House pressures, since by then Reagan will be regarded by some as a lame duck. "There'll be no extended honeymoon this time," says David Gergen, former White House communications director. "It's essential that he reach out to the Democrats quickly."

One matter of immediate concern was an ominous decline in Washington's al ready troubled relations with Nicaragua. Though the Administration retreated from a leak made the previous week that a Soviet freighter was delivering MiG fighter jets to the pro-Marxist Sandinista regime, it continued to decry, in unusually harsh terms, the "incessant" buildup of other arms supplies in Nicaragua. Weinberger pointedly compared Moscow's current stockpiling of the country to its step-by-step militarization of Cuba nearly 25 years ago. The U.S. increased surveillance of the Soviet freighter Bakuriani, docked at the Nicaraguan port of Corinto, and of four other Warsaw Pact ships believed headed for Nicaraguan waters. The Administration repeated warnings that any attempt to introduce advanced fighter aircraft into the Nicaraguan arsenal would be "unacceptable" (see WORLD).

Cabinet discussions on the budget took on some new urgency with Stockman's announcement that the deficit for fiscal 1985 is running even higher than the staggering rate he calculated in August: more than $200 billion annually rather than $172 billion. The increase is due in part to a slowdown in the economy that has slightly reduced federal revenues, and partly to what a senior White House aide called "a one-time hickey": a change in the way the U.S. accounts for federal housing notes that will add $14 billion to the 1985 deficit. But there is nothing onetime about the continued flow of red ink at current spending and revenue levels. Martin Feldstein, former chairman of the President's Council of Economic Advisers, estimates it will swell to $250 billion annually by the end of Reagan's second term if no remedial action is taken. That is $88 billion higher than the Reagan Administration's projection.

By all accounts, Reagan remains convinced that a combination of spending cuts and economic growth leading to higher Government revenues will provide the necessary correction. He prodded his Cabinet secretaries to stem the growth in Government programs. "We came here to dam the river," he said. "Let's start throwing in the rocks."

At the same time, however, Reagan has already declared major parts of the rock pile off limits to budget cutters. He will ask for a 14% increase in military spending in fiscal 1986, and he pledged during the campaign not to slice into the huge Social Security and Medicare programs. The Democrats say the cuts that Reagan is willing to make cannot possibly yield savings of the magnitude needed to close the budget gap. As for relying on economic growth to erase the deficit, many economists are doubtful. Feldstein, for example, forecasts $150 billion worth of red ink annually even if the G.N.P. increases by 5% a year for the rest of the decade--a rate of expansion not sustained for that long since World War II.

Reagan remains adamantly opposed to a tax hike. But many economists and even some members of the Administration think it is unrealistic to believe that deficits can be brought under control without one. Vermont's Republican Governor Richard Snelling, the head of a bipartisan antideficit group called Proposition One, argues that every $2 in program cuts must be matched by $1 in new taxes for a budget-balancing plan to succeed. But Reagan did not even raise the possibility of a tax increase at last week's Cabinet sessions. "There are some in this Administration who feel that we'll ultimately be driven to one," says a top White House aide, "but that's not going to happen."

The roots of the Administration's hang-tough approach on budget matters could be seen in the Cabinet ruminations of Presidential Counsellor Edwin Meese. As the system works now, Meese complained, the size of the federal budget all too often dictates the content of the programs it funds. This Administration, he said, should reverse that process: decide first whether it likes a specific program, irrespective of its support in Congress, and include it in the budget only if the answer is yes. In the sub-Cabinet budget meetings, there was also strong sentiment to press for spending cuts even in the face of certain congressional opposition. The mood within the Administration, said one ranking presidential aide, is for "an all-out assault on federal spending."

The same White House official conceded, however, that it would be pointless for the Administration to send a budget so stripped of popular spending programs that it would be "dead on arrival" on Capitol Hill. He insisted that the final product would be "credible." The big questions were whether the credibility would extend to cutting the defense budget and the big middle-class entitlement programs of Social Security and Medicare.

Reagan's meeting with Shultz and McFarlane was both a policy review and the opening gambit in a turf dispute that severely hobbled the Administration during his first term. Last summer Shultz quietly ordered aides to draft a summary of foreign policy options. He wanted not only to set priorities for a second term but also to establish himself as the man to carry them out. Above all, he hoped to force Reagan to decide which of two competing factions would have the upper hand in arms-control policy: Shultz's State Department, which is anxious to explore new negotiating opportunities, or the civilian leadership at Weinberger's Pentagon, which believes that almost any agreement with the Soviets would freeze the U.S. into a position of inferiority. By taking the initiative with Reagan, says a State Department official, Shultz fired "a shot across Weinberger's bow. If he can get the guidelines fixed now, Weinberger won't be able to stymie him so much."

One idea for settling the dispute, advanced by McFarlane, was to turn arms-control negotiations over to a newly appointed "czar" to coordinate policy. Not surprisingly, that notion, especially if the czar reported directly to the President, appealed neither to Shultz nor to Weinberger. Their combined opposition has made the issue a sore point.

Shultz argued that Reagan, if he is to make good his pledge to break the yearlong impasse with the Soviets, must take personal charge of arms-control policy. That would be something of a departure for Reagan, who generally lets his staff reach a consensus before he acts. Shultz's argument was sound but also self-serving, since Reagan's commitment to easing the nuclear threat would automatically put him on the side of those in the State Department who advocate a flexible approach. Says one senior State Department official: "If the President wants what he says he wants, those who oppose him have to be brought into line or shunted aside."

Any such harsh or public disciplining would be out of character for Reagan. But one way he could signal a fresh interest in arms-control negotiations would be to provide a full definition of a seemingly new approach he alluded to briefly in his address to the United Nations General Assembly in September. The U.S. and the Soviet Union, he said then, should consider entering into "umbrella" negotiations. Administration officials later explained that these would involve lumping into a single set of talks six areas of military negotiations, some old and some new, between the superpowers. They include intercontinental ballistic missiles (the subject of the now suspended START negotiations), intermediate-range nuclear weapons in Europe (currently covered by the INF talks, also suspended), space weapons, chemical arms, conventional forces and so-called confidence-building measures, like the prenotification of large troop movements. That sort of comprehensive approach would let the Soviets return to the negotiating table with a minimum loss of face. They had boxed themselves in by making the removal of the U.S. Pershing II and cruise missiles that had just been installed in Western Europe a precondition of returning to the INF talks and an incentive for resuming START. Since the U.S. could never agree to such a demand, the two sets of negotiations seemed in danger of remaining in limbo. Other than noting the face-saving benefits of the umbrella format, the Administration has said little about how such wide-ranging talks would be organized and carried out.

If Reagan decides to elaborate on the umbrella proposal, he can be certain that Anatoli Dobrynin, Soviet Ambassador to the U.S., will be listening intently. During a reception last week marking the U.S. publication of a book by Soviet President Konstantin Chernenko, Soviet-American Relations, the wily Dobrynin engaged U.S. reporters in some cheerful but newsworthy badinage. "You have introduced something new in the history of Soviet-American relations, the umbrella," he said. "What is it?" Then, referring to the British term for raincoat, he joked, "A mackintosh we can understand, but this must be studied."

Chernenko sounded a conciliatory note from Moscow, calling for a return to the days of detente and speculating that progress on arms control could lead to "broad possibilities for cooperation" in other fields. In a series of answers to written questions submitted by NBC News, the Kremlin leader conspicuously refrained from any criticism of the Reagan Administration, a staple of most of his previous East-West statements. Noting the milder tone of recent U.S. rhetoric, Chernenko declared, "If the statements that are being made lately hi Washington with regard to the desire to seek solutions to problems of arms limitation do not remain just words, we could, at last, start moving toward more normal relations between our two countries." Responded Shultz: "We agree with the goals he states."

Yet it will take more than an exchange of good intentions to restore U.S.-Soviet relations to something approaching an even keel. "The problem for us has been translating policy intentions into practical steps," admits a State Department official. "We have not resolved the internal impediments there yet." For their part, the Soviets are apparently hamstrung by the uncertain leadership of the aging and ailing Politburo. They seem capable of responding only tentatively to overtures from the U.S. Shultz, for example, has made no secret of his desire to visit Moscow for talks with Soviet leaders early next year. At Indira Gandhi's funeral, when Soviet Premier Nikolai Tikhonov expressed standard diplomatic hopes that he would one day see Shultz in the Soviet capital, the Secretary of State pointedly replied, "Is that an invitation?" Tikhonov was noncommittal, but Shultz still expects to make the trip.

To the extent that any politician running for a second term is judged by his record, Reagan's appraisal of his mandate is probably right: voters seem to want more of the same. Yet voters failed to provide him, as they had four years ago, with effective control of the House, though the Senate stayed in Republican hands.

Some political observers professed to see little or no mandate for Reagan, despite the historic proportions of his victory. In 1980, they point out, Reagan ran on a specific ideological platform that included tax cuts and defense buildups, and in victory he could credibly claim that the electorate wanted both. By contrast, they contend, his avoidance of specific issues this year has forced him to forfeit the claim to sweeping political authority, except possibly in the personality department. For some others, Mondale's disastrous weakness as a television-era candidate skewed the voting results. Joked Kansas Senator Robert Dole: "Reagan didn't win a mandate, he won a Mondate."

Yet it is difficult not to read in the election results a sizable voter allegiance to Reagan and his brand of flexible conservatism. Though it did not perhaps bring about the party realignment the G.O.P. had hoped for, the election nevertheless showed movement in the tectonic plates of American politics. According to a New York Times/CBS News exit poll, a larger percentage of voters between the ages of 18 and 24 cast ballots for the President than did any other age group, and for the first time since the New Deal, more of them identify themselves as Republicans than Democrats. Says California Congressman Leon Panetta, a Democrat: "You have to attribute the size of the President's victory to something beyond the fact that he's a nice guy. Certainly it implies there's more of a conservative edge on what we're dealing with."

Yet Reagan could easily squander his clout if he insists on making every legislative proposal a rigid test of ideological wills, as some within the Administration seemed inclined to do. "Going over the head of Congress is not going to work this time unless he can show that the Democrats have become recalcitrants," says a member of the House Republican leadership. "He's got to try to work with Congress first." That hardly seemed to be too much to ask of any President, even one who carried 49 out of 50 States.

--By William R. Doerner. Reported by Johanna McGeary and Barrett Seaman/ Washington

With reporting by Johanna McGeary, Barrett Seaman