A Stockman Charge

It was, confessed Budget Director David Stockman, the worst week of toil he had ever experienced. An admitted workaholic, Stockman had averaged about five hours of sleep a night during the five days prior to the President's speech--a time, he said, "when things began to get interesting." Among other things, he had chaired a meeting of the Cabinet in Reagan's absence, a symbol of the President's intense trust in his judgment on economic matters. One congressional Democrat describes him as being "like Svengali, like Rasputin to the Tsar." But others are awed by his incisive intelligence and command of numbers. Chain-smoking cigarettes and sipping weak coffee, Stockman last Friday discussed with TIME Correspondent David Beckwith his next challenge: helping persuade both Houses to accept the second round of budget cuts.

Q. What is your strategy going to be on the Hill?

A. We have to convince Congress that the budget momentum has been stunned but not stopped. We will be saying that a vote against spending cuts is a vote for high interest rates, and all the turmoil and trouble that high interest rates entail.

Q. Do you have any real chance of getting what you are seeking from Congress?

A. It'll be tougher than before in many ways. There's a certain amount of political capital that was consumed. The willingness to bite the bullet, to take risks, has dissipated on the part of members for understandable reasons. You can't afford to have everybody at you and still get reelected. But the budget reality is that there is no other choice.

Q. What would happen to the markets if Congress fails to approve your latest plan?

A. Not much. I think the markets have already discounted events. The markets already expect a $60 billion to $70 billion deficit in 1982 and $100 billion in the out years. That has little to do with the intrinsic value of our program. To the extent that we implement more than is expected, we'll see favorable movement in the markets.

Q. Critics say the latest cuts hurt the poor most heavily.

A. Well, they're all across the board. I don't know how they can say the Corps of Engineers money or the Water Conservation funds or fisheries hit the poor harder than anybody else. Of course, Head Start will go down 12% just like everything else, and it's been a fairly effective program. I don't think there's been any demonstration that any of those social service delivery programs have appreciably changed the lot of the poor. But there has been a clear demonstration that deterioration of the economy has closed the possibility for poor people to improve their lot. You can argue these things case by case, but that's to miss the forest for the trees.

Q. At one point you were considering specific program reductions. Why did you abandon that approach?

A. We really weren't considering specific program cuts. At this late date, you can't make a new budget, so if the budget is too high, the pro rata cuts are about the only device available. On entitlement programs, of course, we'll have to consider them one at a time, because they'll require a change in the law.

Q. Did you suggest that the tax cut be delayed, or again ask the President to reconsider additional military budget cuts?

A. No. In recommendations to the President, we listed a good many options.

I put defense options and revenue options on paper that I wouldn't even recommend myself. For example, an oil import fee: I voted against that in Congress. [Treasury Secretary Donald] Regan and I are obligated to show the President all the choices. As far as military cuts are concerned, I think that's a closed case.

Q. Will the President veto a further defense budget cut?

A. No. You don't have the practical option to veto a defense appropriation. If you do, it'll go back to a continuing resolution [at 1981 spending levels], which is even worse. I think you can justify every dollar going to defense.

Q. Are you looking forward to the battle with Congress?

A. Sure. We've got a lot of leverage. On some appropriations, we no longer need more than half of both Houses; we need only one-third of one House to stop the budget busting. As long as current financial conditions continue--and I have no doubt they will for a time--we'll be very effective.

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