Inside Report (1)

What lies behind William E. Simon's amazing offer to organize a Republican citizens committee to help re-elect New York's Democratic Mayor Edward I. Koch? Simon, a former Secretary of the Treasury, is now policy chairman of Ronald Reagan's presidential campaign. He is mentioned as a potential vice-presidential choice. Koch's support of President Carter has waned considerably in recent months. The White House has pulled the rug out from under revenue sharing and other vital aid progrms. But most important is the general feeling that Reagan will defeat Carter in November.

The Mayor would never switch his support to Reagan. But Koch has carved himself out a niche as a fiscal conservative close to Reagan's philosophy.

It is as important for Koch to be on friendly terms with the Reagan camp as vice-versa. If Reagan wins, the Mayor will be in a better position to use this leverage for New York's benefit.m