Policies to Leave Wide Impact : Next President Must Cope With the Reagan Legacy

DAVIS, Calif. —  Whether it is George Bush or Michael S. Dukakis who wins the presidency, his agenda will almost certainly be dominated by a dilemma inherited from his predecessor: While succeeding brilliantly in reducing the government’s ability to raise revenues, Ronald Reagan also failed dismally to curb the public’s appetite for government spending.

That is the salient conclusion about the Reagan legacy shared by political scientists and political practitioners as the Reagan era approaches a significant milestone, the 10th anniversary of California’s adoption of Proposition 13, the property tax-slashing initiative of 1978. That vote dramatized the anti-government themes which became the mainspring of the Reagan credo and is widely credited with launching the Reagan era.

Reagan coupled a pledge to put the conservative principles embodied in the state initiative into practice on the home front with a promise to raise defense spending enough to get the United States to “stand taller” in its dealings with other countries, particularly with its chief adversary, the Soviet Union.

Whatever they may think of the results of his efforts, analysts all across the political spectrum agree that with Reagan having more than six months to go in the Oval Office, his stewardship already has had far-reaching consequences.

“No President since Franklin D. Roosevelt has had a greater impact on the political system than Ronald Reagan,” says Larry Berman, political science professor at UC Davis, who last week directed a conference on the legacy of the Reagan presidency that is expected to be the forerunner of many such scholarly conclaves in the years ahead.

Because Reagan, far more than most U.S. presidents, has been linked to a clear set of ideological beliefs, objective assessments of his tenure are hard to come by even in the supposedly nonpartisan groves of academe.

“Where you stand on the Reagan presidency depends on where you sit ideologically,” said Tom Mann, director of the governmental studies program at the Brookings Institution in Washington.

Area of Social Issues

Liberals tend to bemoan Reagan’s objectives but complain that he succeeded all too well in achieving them. On the other hand, conservatives, while supporting Reagan’s goals, grumble that he did not reach enough of them, particularly in the area of so-called social issues, where Reagan has so far been unable to undo the Supreme Court’s sanctioning of abortion and its ban on school prayer.

Strikingly, though all of Reagan’s political experience before the presidency was in domestic affairs, his most positive achievement as President may turn out to be in foreign affairs--concluding the treaty with the Soviet Union eliminating intermediate-range missiles, and if the current summit talks in Moscow succeed, fostering a new climate of understanding with the Kremlin.

Some analysts argue that none of this would have occurred if Mikhail S. Gorbachev had not taken over as Soviet leader, determined to solve some of his country’s massive internal problems by easing tensions with the West. But many scholars believe that Reagan still deserves plenty of credit for sticking to his hard line on arms control and other issues, in the face of more than six years of criticism from liberals.

New Terms of Cooperation

“He challenged the Soviet Union and established new terms of cooperation,” Condoleezza Rice, Stanford University specialist in Soviet affairs, told the Reagan legacy conference here. “In doing so, he has broadened the bipartisan consensus for arms control as a strategy in meeting some of the security requirements of the United States.”

As many see it, Reagan has also done a big favor for his successor, whoever it turns out to be. “The next President should come in with important opportunities for dealing with the Soviet Union,” said Brookings senior fellow Stephen Hess, a former White House aide to Presidents Dwight D. Eisenhower and Richard M. Nixon. “In this area, the new President should be able to hit the ground running.”

But whatever advantage Reagan may have given his successor in international affairs, many believe it has been more than offset by the problems he leaves behind domestically because of the twin towers of deficit--the balance of trade and the federal budget--both of which reached record highs in this Administration.

‘Biggest Failure’

In an even-handed assessment of the Reagan legacy for the conference here, Mann of Brookings called these deficits, particularly the trade deficit, “the biggest failure” of the Reagan presidency. Because the trade imbalance makes the United States dependent on the decisions of foreign investors to help finance its own spending, Mann said: “We are today more vulnerable economically than at any time in recent history.”

Of the budget deficit, former President Gerald R. Ford warns: “I happen to think we have a time bomb, a Frankenstein monster. And something has to be done about it.”

Reagan’s critics charge that he not only created the problem, with the connivance of Congress, mainly by reducing taxes, but he also failed to inspire the realism that might have reduced public expectations for a continuing stream of government benefits.

“The President has permitted his relentless optimism to blind him to a unique opportunity,” wrote John Palmer, editor of the Urban Institute’s “Perspectives on the Reagan Years.”

‘Unpleasant Truths’

“The American people apparently found Reagan’s personality so appealing they would have swallowed some unpleasant truths from him.”

Instead, critics say, Reagan concentrated on his short-term goal of cutting the government’s taxing power. “He has pulled the revenue plug, and as a result has completely changed the public policy landscape,” says Isabel Sawhill, a senior fellow at the Urban Institute, a nonpartisan Washington think tank that issues periodic assessments of the Reagan record.

Analysts point out that the combined effect of the 1981 Reagan tax cut and the massive 1986 tax reform law, which eliminated a host of so-called loopholes, has been to greatly limit the ability of the federal government to support new programs or even to help existing programs keep pace with inflation.

“The greatest accomplishment of the Reagan presidency has to be to squeeze the discretionary (domestic) spending power out of government,” said Norman J. Ornstein, American Enterprise Institute scholar.

Defense, National Debt

As things stand now, Ornstein points out, all but about 15% of federal revenues are designated either for defense or such things as paying interest on the national debt and financing such entitlement programs as Social Security and Medicare.

Meanwhile, Reagan’s critics say, public expectations from government have not diminished. “You have an increasingly immovable object, the federal budget, coming up against an increasingly irresistible force, public demand,” said Ornstein, who, as co-director of the Times Mirror/Gallup Poll, points out that recent findings of that survey indicate that such demand has not been diminished by the Reagan presidency.

At the beginning of the Reagan Administration, an analysis released by Times Mirror points out, voters hoped for reduction in the size of the federal defict, but “at the same time they were reluctant to identify specific social programs that should be eliminated or have their budgets cut. Nearing the end of the Reagan service, these same tensions persist.”

Indeed, last January, after seven years of Reagan’s presidency, 62% of those interviewed agreed with the statement that “the government should guarantee every citizen enough to eat and a place to sleep,” while only 33% disagreed.

Even more worrisome from the viewpoint of the next President are other surveys and election results that show no lessening in middle-class insistence on maintaining its benefits, including Social Security and other costly entitlement programs, an attitude that some critics complain Reagan did not do enough to try to change.

“He and his handlers did not use the tools that he had to maximum effectiveness,” contended David Keene, chairman of the American Conservative Union, who worked for the 1976 Reagan presidential campaign and served as an adviser to the 1988 presidential campaign of Kansas Sen. Bob Dole.

Recalling Reagan’s repudiation of the congressional effort to freeze cost-of-living increases for Social Security beneficiaries in 1985, Keene said: “Reagan didn’t have the guts to do it. Congress did, but he chickened out.”

The conundrum Reagan leaves for the 41st President is nothing new, as many analysts pointed out. “The fundamental paradox of the American system is that we’re probably one of the most anti-government people on earth,” said Berman of UC Davis. “Yet everybody still wants whatever they can get from government.”

But if Reagan did not create this dilemma, some critics fault him for exacerbating it by failing to take advantage of his considerable store of popularity and his vaunted skills as a communicator to dampen public demand for government aid.

The Urban Institute’s Sawhill likens Reagan’s failure to “successfully tackle middle-class entitlements, including Social Security” to Lyndon B. Johnson’s refusal to ask for a tax increase needed to pay for his decision to continue to wage his war on poverty and the war in Vietnam simultaneously.

Johnson’s decision triggered the inflation that burdened his successors, just as Reagan’s decision contributed to the deficits that will plague whoever follows him in the Oval Office, Sawhill contends.