O'Neill sees a new mood in Washington, country

When President Reagan went on television recently to rally support for his budget, Thomas P. (Tip) O'Neill Jr. sat in his office at the US Capitol waiting. A year ago a similar speech touched off an avalanche of response, 59,000 communications in all. All but 400 backed President Reagan.

This year, the telephone lines were quiet the night of April 29.

As the Speaker of the House of Representatives watched his switchboard, it lit up once in 15 minutes. ''Stay with it, Tip,'' was the message, recalls O'Neill. After a week, only 800 responses had arrived, about half pro-Reagan.

For the Massachusetts Democrat, it was one sign that his party is climbing back from the depths of last year's defeats. In a wide-ranging interview last week, the speaker said that straying congressmen are returning to the Democratic fold and that middle America has lost its taste for Republican budget-cutting.

O'Neill, a self-proclaimed big-spending politician, conceded that the federal government outgrew itself during the last decade. But he said that President Reagan's ''big mistake'' was trying to turn it around too fast.

O'Neill also promised that the House would produce a Democratic budget that will cut Reagan defense plans $10 billion to $15 billion next year, include more ''equitable'' taxes such as $20 billion more from business, and leave social security payments untouched in 1983.

Sitting in his spacious private office, where he is flanked by a wooden model of the frigate USS Constitution, his collection of donkey figurines, and a painting of his ancestoral Irish countryside, O'Neill recalled the shellacking he got on the President's 1982 budget and tax bill. Many of his own party were ''running away from me,'' he recalled. ''Last year I was old hat.''

This year, said the speaker, some of the same members who voted with the President are now saying ''no further cuts'' in the federal budget.

The key has been the middle class, according to O'Neill: ''You know, when this (budget cutting) was all geared to the poor, middle America supported the President. They had no idea that they themselves were going to be hurt.''

''All of the time I knew exactly where we were going,'' said the speaker. ''I knew what the reaction was going to be. No question about it.'' Cuts in aid to college students, school lunches, and meals for senior citizens have hit too close to middle-income Americans, he said.

''When my father was 85 years old, he used to have a visiting nurse come in three times a week to look after him,'' said the congressman. ''That money has been eliminated in that program. You know, that's a sad thing to do to a man that's 85 years old, trying to keep his own freedom and independence.''

Even as he pinned the ''progressive liberal'' label on himself and voiced no regrets for ''putting more money in that budget than anyone coming down the pike'' for health and other social programs, O'Neill conceded that times have changed.

Congress went too far in the 1970s, he said. ''We over-legislated. There's no question about that.

''In '74 after Watergate we got 78 new congressmen, most of them opposed to the war (in Vietnam),'' O'Neill explained, describing that class of freshmen Democrats as ''able, talented, and brilliant,'' but largely without experience in public life.

''They wanted to spread the power'' in the House, he recalled, by tossing out entrenched committee chairmen and setting up subcommittees. ''There's 165 subcommittees out there now. You're not here a year or two years till you're a subcommittee chairman. Each subcommittee chairman has his own staff. He hires some bright intellect who wants to make his boss look good, and he works on legislation.''

To make matters worse, he said, behind ''every bit of legislation'' there lurked a pressure group.

''From '74 to '80 we had too many balls in the air, and there was no way I could stop it,'' said O'Neill, who became speaker in 1976. ''Are we partly responsible? Sure we're partly responsible. There was too much government spending out there, too much regulation.''

Now the pendulum swings the other way, he said. ''Regardless of whether Reagan won or not, the change was going to come in the '80s . . . because of the American people. The House follows the will of the American people.

''And so the '80s was going to be the era of conservation, of smaller homes, smaller cars, less government, less legislation, reviewing your regulations. All that was going to happen whether Reagan came in or not.

''The interesting thing is that he came in and wanted to do it with a fell swoop. You just can't do it that way.''

O'Neill maintained that this is President Reagan's mistake.

''He predicted that when his program got through there would be a balanced budget in three years,'' said O'Neill. ''Well, it was obvious that you just can't go the route'' of defense building and budget cuts and massive tax cuts while balancing the budget, he said.

Taking a folder from his desk top, he ticked off figures: $1.5 trillion out of the Treasury for defense through 1985, and $900 billion in cuts in taxes. ''Those things just don't mesh,'' said O'Neill. ''There isn't enough money.''

With the nation in deep recession and high interest rates immobilizing businesses and farms, Republicans could have a sinking economic ship on their hands. Would Democrats prefer to step aside, and allow Republicans to take the blame?

''That's my problem with some of my Democrats,'' said O'Neill of congressmen who see political gains in the failing economy. ''The reason we have to bail out that ship is because it would mean unemployment down the road and the failure of the American dream that a person can have a home.

''For that reason we've got to come up with a budget, and we've got to go into compromise, and we have to work it out.''

Does the House speaker worry that Americans will blame him for failing to reach agreement with President Reagan after their meeting last month? Said O'Neill, ''If the people had believed that he went half the way then I would have got, instead of 800 calls, the 59,000 I got a year ago.''