Facing the Jobs Issue

By GEORGE J. CHURCH

Reagan makes his case, but G. O.P. candidates may have trouble making theirs

Now it gets serious. With less than two weeks to go before the mid-term election, the preliminary sparring is over, and the candidates are trading their heavy punches. The prize is a big one: preservation or destruction of the conservative coalition that has enabled President Ronald Reagan to put most of his programs through Congress.

As always in an election that is really an aggregation of state and local votes, the candidates are debating a thousand points of personality and parochial concerns. But on every husting, one national issue is dominating all others: the state of the recession-ridden economy, and especially the 10.1% unemployment rate. Democrats everywhere are seeking to pin the blame for double-digit unemployment squarely on Reagan. On national TV, the President last week took the issue headon, an action he had been avoiding. In a sober address from the Oval Office that was considerably more effective than his stump speeches on behalf of Republican candidates, Reagan attempted to assure the voters of his concern, argued that his policies are slowly bringing the nation out of an economic mess created mostly by his predecessors, and stressed his Administration's accomplishments in reducing inflation (now 5.1%, down from 12.4% in 1980).

Which side are the voters inclined to believe? The answer, so far as it can be deduced from a Yankelovich, Skelly & White poll for TIME, is that troubled voters are skeptical about accepting either view as gospel, but on balance the results are worrisome for Republicans. While most voters still absolve Reagan of responsibility for the nation's economic distress, they are not so indulgent toward his party.

The electorate is clearly worried. Almost 60% of the registered voters interviewed across the country judged the nation to be "in deep and serious trouble," vs. only 38% who thought the difficulties are no worse now than at other times. By 47% to 39%, they considered rising unemployment more troublesome than continued inflation. That is an almost exact reversal of a poll in June, when 46% worried more about inflation and only 38% about unemployment. *

But when asked where to place the blame for climbing jobless rates, 46% of those polled answered: "The situation Reagan inherited." Even 34% of the registered Democrats interviewed chose that response. Only 33% of the total put the responsibility on "Reagan and his policies." Some 61% said they personally were economically worse off than they had been when Reagan took office. Even so, 57% thought the President had generally put the nation on "the right track."

Moreover, Reagan seems to have weathered without serious damage the decisive psychological blow of the Government's announcement on Oct. 8 that the September jobless rate had really crossed the symbolic 10% mark. Although the Yankelovich interviews were conducted by telephone Oct. 5-7, the firm repolled last week and found that the opinions on Reagan and the economy had not significantly changed.

That result tallied with surveys taken for the White House by Richard Wirthlin, Reagan's pollster. He found that the President's popularity ratings dipped five or six points over the weekend following the announcement, but rebounded by last Tuesday after interest rates continued to fall (the prime rate was down to 12% from 16.5% in midsummer) and the stock market shot up (from 777 on the Dow Jones industrial average in mid-August to 993 at the end of last week).

But if Democrats have been unable to convince voters that Reagan's policies caused the recession, the President has been even less successful in convincing them that he is bringing it to an end. A startling 77% of those polled by Yankelovich expect the slump to persist all through 1983, vs. 14% who believe that it will drag on only a few more months.

In any case, the President is not running this year, and the patience that the public is showing in judging his stewardship of the economy does not necessarily translate into votes for the candidates of his party. Asked which party would probably do the better job of reducing unemployment, 48% of those polled by Yankelovich chose the Democrats, 33% saw no difference, and a mere 14% opted for the Republicans. That result was not altogether surprising; Democrats are traditional advocates of heavy social spending aimed partly at creating jobs. But even registered G.O.P. voters split, 28% to 28%, on whether their party or the Democrats would be more successful in reducing the jobless rolls.

Indeed, 48% of the people questioned said they intended to vote for their Democratic congressional candidates, while only 34% expected to pull the Republican lever. Other polls have shown the Democrats maintaining a roughly similar lead. But the figures are far from conclusive: they follow the approximate breakdown of party registration, and voters do not always let their instinctive party loyalty dictate their choice among candidates in their districts. Despite a general inclination to vote Democratic, 52% of the people in the Yankelovich poll said they expected to vote for their current Congressman, and only 30% intended to vote for the challenger, even though many could not recall the name or party affiliation of the representatives from their districts.

On several specific policy issues, voters divide in ways that cannot please either party very much. Asked what the nation should do to spur economic recovery, 66% chose as their first priority large cuts in Government spending. A plus for Reagan and the Republicans? Not entirely: 62% of those who gave this answer would reduce planned military outlays, vs. only 21% who would slash further into social-program expenditures.

Reagan has been seeking to make a major issue out of his call for a constitutional amendment that would compel a balanced budget, a dubious piece of legislation at best. In his TV speech last week, the President assailed "the hard-core opposition of a minority of Representatives who prefer continued big spending" and who prevented the amendment from winning the required two-thirds vote when it came before the House earlier this month.

Some 57% of those polled by Yankelovich agreed that a balanced budget is at least important; an additional 16% judged it to be "more important than anything else." But those polled said (47% to 45%) that Reagan was being "hypocritical" in plugging the amendment while simultaneously running up huge deficits. This is no gain for the Democrats, though: only 23% of the sample thought Democrats would work for a balanced budget if they came back into power; 63% thought the Democrats would simply reinstate expensive social-spending programs that Reagan has reduced.

The general conclusions: voters are deeply troubled about the economy, inclined to give Reagan the benefit of the doubt, but very skeptical that either he or his Democratic opponents have any convincing answers to the problem of how to put people back to work without rekindling inflation. Thus while Democrats almost certainly will increase their representation in Congress, as the out-party nearly always does in a mid-term election, the extent of the gains is difficult to predict.

Reagan's major attempt to resolve the doubts in favor of his party came last week. Initially, the White House sought to purchase time for a major TV address, but the networks balked. Reagan's aides then requested a free half-hour for what they billed as a "nonpartisan" economic report to the nation. Over the howls of Democrats, CBS and NBC agreed.

Reagan did tone down his rhetoric. He did not even use the words Republican and Democrat, and he asserted that "there's plenty of blame to go around" for economic distress. He sought to project an image of sober concern, stating that " the dark cloud of unemployment hangs over the lives of 11 million of our friends, neighbors and family."

The primary point that Reagan tried to make in his TV speech was that his Administration had to bring down inflation in order to construct the base for any lasting reduction of unemployment. Skillfully using electronic charts that displayed moving lines, the President asserted that through the 1970s every economic recovery had been aborted by a surge of inflation that triggered a "deadly, delayed reaction of rising unemployment." In contrast, he recited current figures on declining interest rates and the drop in inflation. Not only is a recovery coming, said Reagan, but "this one is built to last."

The President's point was put more bluntly, and in less partisan fashion, by Republican Economist Herbert Stein. Writing in the New York Times, Stein argued that "disinflation" inevitably involves painfully high unemployment, which will yield to future healthy growth "if we can avoid dogmatism on either side." Democrats of course argue that the transition could have been accomplished with much less pain.

It is a difficult point for the public to appreciate, mostly because many people have been unable to believe that inflation is really slowing. Prices are still rising, and the consumer who pays more for a pound of bacon or a pair of shoes than he paid on his last visit to a store rarely compares the increases with those that occurred a year or two ago. Even so, Reagan seems to be convincing some people. An even 50% of those polled by Yankelovich now believe that the President is doing an acceptable job of containing price rises.

Democrats sought, and received from CBS and NBC, free time to reply to Reagan's speech. The choice fell on Michigan Senator Donald Riegle, who is little known nationally. In a hastily prepared 7-min. talk following Reagan's 23-min. address, Riegle derided the President's plea that the nation "stay on course." Asked Riegle: "If you live from paycheck to paycheck, do you feel more secure about your job? If you own a small business, are you feeling more secure? What kind of course is this?" However, like other Democratic spokesmen in recent months, Riegle was hampered by his party's inability to produce any coherent and convincing alternative to Reagan's austere policies.

The argument will keep heating up until the voters actually stream into the polling booths. Making full use of a President's prerogatives, Reagan last week offered the Soviet Union a deal under which the U.S. would ship to the U.S.S.R. up to 23 million metric tons of grain in the year starting Oct. 1 vs. 6 million to 8 million tons that the Soviets are now committed to buy. The move was calculated to please farmers who have been badly hurt by the recession. He also signed a $3.8 billion job-training bill. Whether such efforts can offset the Democratic wailing about widespread unemployment remains to be seen. Indeed, the election shapes up as one in which citizens face a tormenting question: whether to "stay the course" with policies that ask them to suffer high unemployment today for the sake of a so far unfulfilled promise of future healthy growth, or to vote for an alternative that no Democrat has yet made very clear. --By George J. Church. Reported by Douglas Brew and John F. Stacks/ Washington

*The potential sampling error in the poll is plus or minus 3%. When compared with the results of previous polls, the potential sampling error is plus or minus 4.5%.

With reporting by Douglas Brew, John F. Stacks

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