|Since the time of Franklin Roosevelt,
Americans have traditionally looked to the First 100 Days of a new Administration
to gauge its tone, its direction, its spirit. The number of days is arbitrary;
in FDR's time, a severe emergency dictated fast action. It would have been
surprising to have had no surprises in that particularly grim period of
It may be more realistic, however, to look at
an Administration's First 500 Days. That time frame, in fact, may be a
much better measure of the progress and direction of a new President, because
much of the second 500 days is spent consolidating the gains of the first
500 days (and much of the final 461 days is spent gearing up for the next
The Reagan Administration has completed its First
500 Days in office, and it's a good time to take a look at where the "New
Beginning" promised by this President has led us, and at where we go from
In his first year, the President secured congressional
approval of some significant budget and tax initiatives and some dramatic
shifts in domestic and foreign policy. The President had some impressive
victories. Let's take a look at the score.
First, the rate of inflation has dropped sharply
in recent months. Consumer prices rose a modest 6.6 percent between April,
1981, and April, 1982. Prices fell in March, but were on the upswing again
Second, we have increased military pay and benefits,
recruiting is up and so is the supply of essential military materiel.
Third, there has been a significant drop in the
use of imported oil by the United States. We now import about 5.5 million
barrels of oil a day -- an impressive decline from the 7 million barrels
a day we were using in 1980.
Finally, the President has succeeded in cutting
taxes that in turn promises to cut federal tax collections by $750 billion,
over the next five years.
So far, not too bad. But as an oldtimer out in
Yuma used to tell me, "When you're tellin' me somethin' ain't half-bad,
which half are you tellin' me about?" There is another half to the story.
Many economists are skeptical about the prospects
for lowered inflation in the long run. It is a fact that prices tend to
rise more slowly during economic downturns, and some prices even fall.
But when a recession ends and recovery begins, prices almost always shoot
up again. And if we can't get future deficits well below the $100 billion
level, that scenario doubtless will be replayed. Bond market folks already
are betting that the deficit situation won't improve, and that's why interest
rates are stuck at near-record highs.
We've made improvements in our national defense
posture, and we need to keep upgrading our conventional forces and the
quality of our volunteer army. But we lack a coherent defense policy and
one that clearly spells out what we need, and why we need it. Gen. David
Jones, the retiring chairman of the Joint Chiefs of Staff, told a National
Press Club audience recently that Americans have a preoccupation with exotic
weapons systems that leads us to build the weapon before we decide how
it will fit our strategy or our tactics. Jones believes the approach should
be the other way around. I agree.
The short-term energy outlook is bright -- but
it remains only short-term. Oil supplies last year were plentiful, but
the picture continues to change. When energy prices fell worldwide last
year, OPEC simply cut back on production. When the economy picks up again,
the American demand for oil is likely to pick up. The oil glut could fade
-- gas prices, in fact, have already started to inch upward in some parts
of the country.
|A few years ago, the present director
of the Office of Management and Budget, David Stockman, then a member of
Congress, took a look at the world oil market and proclaimed that OPEC
was dead. At the time, oil was $12 a barrel. Within two years, the price
of oil, worldwide, tripled.
So let's not kid ourselves. We're not out of the
energy woods yet. And if that's true, we had better think again about the
proposal to dismantle the Department of Energy, and about those budget
cuts knocking out solar power and renewable energy research.
Finally, a word about tax relief. We all want
tax relief, but the question is, can we afford it? Put another way, when
the federal government is already running record deficits, who's going
to pay for the tax cuts?
We will. All of us. We'll pay for it in the form
of a bigger national debt, more government borrowing and high interest
rates that promise to choke off sustained economic growth. If that isn't
enough, state, county and local governments, reeling from the pinch of
the federal treasury, are scrambling to find new taxes to make up the difference.
I've been troubled by this notion of borrowing
money to give ourselves a tax break. Faced with mounting deficits, even
the President has expressed his willingness to raise an additional $125
billion in revenue over the next three years. The question no longer is
whether last year's tax cut went too far. It did. Both sides now agree
that if the budget is to be balanced anytime soon, Congress will have to
repeal some of the tax relief okayed last summer. The question now is how
much, and in what form?
If the good news about inflation, defense, energy
and taxes is tentative, the bad news about the economy is not.
Unemployment in the United States is at a 40-year
high. Some 11 million Americans are out of work -- 9.5 percent of the work
force. Arizona isn't far behind: the latest figures for our state show
our rate of unemployment standing at 8.4 percent. Principal industries
like automobiles, housing, lumber and copper have been strangled.
This time, unemployment is not an isolated problem.
It's not just South Succotash that's suffering. It's Seattle, Detroit,
Denver, Birmingham, Tucson, Youngstown and Phoenix.
This is not something overblown by the press --
on the contrary, it would be a mistake to blame the messengers for the
bad news. It's a real, human problem -- especially for people like the
56-year-old copper worker who wrote me recently telling me he can't find
another job. He has no marketable skills. And if he isn't hired back at
his old job, he has nowhere to turn.
A lot of Americans suddenly have nowhere to turn.
This country treasures the work ethic, and I believe there's a lot to be
said for solid, honest labor. I also think it's pretty cruel to tell 11
million Americans every morning that we're sorry, but you can't
work, because there are no jobs. People who are out of work will tell you
there's something a lot worse than taxes -- having no income on which to
There are other problems.
One is the federal deficit. During the 1980 campaign,
candidate Ronald Reagan said we could cut taxes, increase defense spending
and still balance the budget by 1983. That's changed. Everyone now agrees
that the tax and spending program adopted last year, if allowed to stand,
will crank out a $182 billion deficit by 1983. That's nearly three times
that of the biggest deficit ever, $66 billion, under the Ford Administration.
In fact, unless changes are made in last year's
budget policies, this Administration will rack up four years of deficits
totalling $749 billion -- more public debt than accumu-