"A Change of Direction"

By Edwin Warner

In word and deed, Reagan starts to make his aims known

In his first full week as President, Ronald Reagan made a determined effort to set the agenda and the tone for his next four years. At the President's initial press conference and in other words and deeds, some symbolic and some concrete, he made it pla--in that he has strategies for foreign as well as domestic policy, that he has a team he thinks can carry them out and that he will not be deterred by criticism.

The slings and arrows of protest are bound to multiply as the Reagan Administration slashes at the budget at home and stiff-arms the Soviet Union abroad. During a meeting with his economic advisers, Reagan remarked: "I come from a warm climate. I enjoy a warm climate. I'll take a warm climate." Maybe, but by the end of his busy week, he was astonished at how confining his new job is. "This is outside, isn't it?" he plaintively asked as he gazed at the sky during a brief stroll outside the White House. He looked forward to sampling the fresh air on his first visit to Camp David over the weekend.

Meeting with the press in a relaxed and orderly session, the President displayed charm, aplomb and the indifference to some details in the briefing books that has distinguished his public performances from those of his fact-happy predecessor Jimmy Carter. While Reagan began many of his answers with his trademark "Well ..." and ducked a few queries altogether, he forcefully re-emphasized basic themes.

He was determined, he said, to bring down inflation; thus his budget cuts would be "bigger than anyone has ever attempted." He added: "There has to be a change of direction in this country, and it's going to begin with reducing Government spending."

Reagan announced some of the actions he had pledged to take early in his Administration: a 60-day freeze on pending Government regulations, and steps toward abolishing the Council on Wage and Price Stability, a toothless device set up to combat inflation. Earlier in the week, Reagan eliminated all price controls on domestic oil, eight months before they were to expire, in an effort to encourage more domestic production (see ECONOMY & BUSINESS). The move will increase the cost of gasoline and heating oil, but will add billions to oil company profits--as well as billions in federal tax revenues.

The President hammered away at the need for budget cuts because he knows he must win some significant victories in reductions if he expects Congress to approve his often promised 10%-a-year reduction in personal income taxes over the next three years. Reagan advisers have been slow in putting together their economic package because they want to make sure all their figures are straight, to prevent any embarrassment when the struggle with Congress begins. "We only cut 3 1/2 billion today," quipped Office of Management and Budget Director David Stockman, emerging from one economic policy session. He spoke only half in jest: the Administration is shooting for a reduction of $15 billion in fiscal 1981 and as much as $35 billion the following year. As part of his economic blitz, Reagan will deliver a public address on his views this week. He also plans to discuss his program on the Hill and have lunch with congressional leaders.

Reagan's first swipe at the budget--his freeze on federal hiring, retroactive to last Nov. 5--has already provoked cries of dismay. OMB officials have been confronted with court challenges and agency appeals for exemptions. The Justice Department, for example, is worried about losing 114 young attorneys recruited for its honors program, a possibility that may discourage talented law school graduates from seeking jobs with the department The IRS complains that it does not have enough employees to audit tax returns or pursue evaders in the courts, though it is hard to believe that the IRS's plight will spark a public outcry.

Education Secretary Terrel Bell said that he anticipated sharp reductions in the nearly $5 billion budgeted for college student loans and grants, many of which go to middle-income and even upper-income families. But he pledged to continue programs with a "good payoff," like Head Start, which prepares poor children for school. Bell also supports tuition tax credits for parents of children in private and parochial schools and colleges, a Reagan campaign pledge. Says an aide to a Republican Senator: "There are a lot of people on our side who think it's political suicide to cut those middle-class subsidies Republicans love so much."

Other bureaucratic battles are looming. A report was released last week on the Equal Employment Opportunity Commission by a Reagan transition team headed by Jay Parker, a black and the president of the Lincoln Institute for Research and Education, a conservative group that studies issues affecting middle-class blacks. The report recommends that no lawsuits be brought against businesses or educational institutions unless there is evidence that they intended to discriminate. Numbers alone should not be considered proof of a pattern of discrimination, said the report.

Reagan has not commented on the proposal, though he has often expressed his doubts about affirmative-action programs.

Civil rights groups argue that such a change would undermine the progress made to date. Adopting the report's recommendations, says EEOC Vice Chairman Daniel Leach, a Democrat, "would probably set the civil rights movement back 25 to 30 years."

Another sensitive social nerve was jabbed by Richard Schweiker, Secretary of Health and Human Services. Meeting with reporters, he said he opposed using Medicaid funds to provide unmarried teen-agers with contraceptives. HHS has a $162 million budget this year to promote family planning. Schweiker said his department should not give sex education to children: "I don't think it's the Fed's role to do it, and I don't think it's the state's role unless the local school agency does it with the express approval of the parents." Schweiker's predecessor, Patricia Roberts Harris, was a staunch supporter of such programs and predicted their elimination would be "a disaster." But Schweiker was obviously responding to pressure from the Moral Majority and other groups that believe youthful sex education encourages too widely varied sexual practices, to the detriment of family life.

Reagan won a skirmish with Congress last week when his most controversial appointee, Raymond Donovan, was approved as Secretary of Labor by the Senate Labor and Human Resources Committee; he faces the full Senate vote this week. Some half a dozen informants had told the FBI that Donovan's New Jersey construction firm had ties to organized crime. The chief accuser was Ralph Picardo, a self-admitted "unsavory character" who was convicted of murder in 1975. Two years later, his conviction was overturned on appeal. Meanwhile, Picardo began to talk and the FBI found him to be a credible witness: his testimony has led to three convictions. Picardo claimed that Donovan had made several payoffs to Anthony Provenzano, a Mafia chieftain and Teamsters Union boss. But after examining 90,000 canceled checks and a similar amount in invoices at Donovan's firm, the FBI could find no corroboration for Picardo's charge. Donovan called his accuser "a pathological liar and murdering slime." Committee Chairman Orrin Hatch noted that Donovan's nomination had been "one of the most rigorously scrutinized in our country's history," but he expressed some lingering unease. "If any of these allegations prove to be true," he told Donovan, "it'll be one miserable experience for all of us."

Now that the top Reagan team has been assembled, it is showing more signs of cohesiveness than most Administrations have at this stage. Yet some of its members will undoubtedly turn out to be more equal than others. A leading contender for the role of primus inter pares is Secretary of State Alexander Haig, who wasted no time asserting his authority and adding his resonant voice to foreign policy pronouncements. He drafted a 20-page memo for Reagan, urging changes that would put the State Department, rather than the National Security Council, firmly in control of foreign policy. So far Reagan has not reacted, but National Security Adviser Richard Allen has offered no dissent. That is a restructuring of power that would never have been tolerated by Allen's predecessors, Zbigniew Brzezinski and Henry Kissinger--at least not by Kissinger until he moved from the Security Adviser job to become Secretary of State. Haig also bridled at OMB Director Stockman's public disclosure that he is seeking a very large cut in the foreign aid program. That, Haig made plain, is the Secretary of State's turf.

Far in advance of other Cabinet officers, Haig has named all but two of his top 30 appointments. He did not entirely get his way with them. He was forced to defer to the White House on the department's No. 2 job. William Clark, a California Supreme Court justice, who served as a top aide to Reagan in Sacramento, was named Deputy Secretary of State.

Haig also faces opposition from Senate conservatives to other of his possible appointees, largely because they are closely associated with Kissinger. Among them:

Lawrence Eagleburger, Ambassador to Yugoslavia, and Brent Scowcroft, who succeeded Kissinger as National Security Adviser in the Ford Administration.

Despite his absorption in domestic matters, Reagan found time last week to extend a hearty welcome to his first foreign visitor, Jamaica's new Prime Minister Edward Seaga. The White House guest could not have come at a better time. Seaga won a landslide victory on an antiCommunist, pro-free market platform. In his toast, Reagan said that Jamaica's "recent struggles to remain free of foreign interference is an inspiration to the world."

The President undertook to continue and perhaps increase the $40 million in aid to Jamaica approved by the Carter Administration. Seaga responded that the previous regime in Jamaica had used the U.S. as a scapegoat for its own failures: "We hope that our being selected as your first visitor is a sign that we can resume the friendship that we used to know between the American and Jamaican people."

After leaving the White House, Seaga cautioned: "The Cubans are standing in the wings, waiting to see what happens. They are still capable of making a comeback." By encouraging U.S. businesses to invest in the island, the Reagan Administration hopes to prevent such a possibility. Said a senior White House official: "The Seaga visit sent an important message to that part of the world: Those of you who turn to the West will be rewarded."

Reagan was confronted with another dilemma, blending domestic and foreign policy concerns: what to do about the grain embargo against the Soviet Union. Pursuing a tougher policy toward the Soviets, the President would send a contradictory signal if he lifted the embargo without some concession from Moscow. But while the embargo remains, farmers will be angry with him, especially since he attacked this measure during the campaign. At his press conference, Reagan said the embargo gave him two choices: to lift it or to extend it across the board to all goods sold to the Soviet Union. Last week he acceded to a request by Agriculture Secretary John Block to take the matter out of the hands of the National Security Council and let the full Cabinet debate it.

So far, the rumblings from the disgruntled right have been muted. To try to keep them that way, White House Aide Lyn Nofziger met with a group of New Right leaders last week, including Direct-Mail Expert Richard Viguerie, Conservative Caucus President Howard Phillips and Terry Dolan, chairman of the National Conservative Political Action Committee. Nofziger assured them that their views would always have a hearing and the White House would stay in touch. Said Nofziger afterward: "When you appeal to a broad national constituency, you're going to dismay some groups some of the time." But the Reagan team wants to put that off as long as possible--at least until they have launched their new policy initiatives and won the backing of a majority of Americans. --By Edwin Warner Reported by Laurence I. Barrett/Washington

With reporting by Laurence I. Barrett/Washington

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