GOP smells budget victory but Democrat's undaunted

Seeing the President weaken in the polls and the Republican Party newly vulnerable to the old charge of being the party of the rich, the Democrats are digging in for a stiff fight in Congress.

The President may already have won on the key issues: Republican and Democratic proposals both include sharp cuts in federal spending and individual and corporate taxes, as Mr. Reagan has demanded.

But the parliamentary battles that set the stage for future political wars could now start to turn the tide in the Democrats' favor.

In a dramatic House vote June 25, the Democrats attempted to force a piecemeal review of President Reagan's budget revisions, instead of voting on the budget package as a whole. They fell seven votes short. But this was a better showing than their 63 vote losing margin on May 7 in the first major House budget test.

The Democratic strategy in pushing for a piecemeal review was less to avoid bottomline budget cutting than to dramatize, line by line, how the cuts will affect the public. The Democrats claim overall public support of Reagan's budget package will erode when specific cuts in programs like medicare and college loans are reviewed.

At the same time, House Ways and Means chairman Dan Rostenkowski (D) of Illinois announced more of the Democrats' tax counterpackage -- personal tax cuts aimed more at the under $20,000-to-$50,000 income group, they said, in contrast to the President's "across the board" cuts that favor the over-$50,000 income class. And the Democrats insisted on a two-year tax cut, not the three- year cut the President wants, "because we don't know what the economy will be like then," they said.

For the first time since last November's electoral debacle, the Democrats sense a tactical opening. Few of the party's leaders would go so far as to say their prospects for 1982 and 1984 have much improved. But for the first time this week, having been down in the dumps for months, the Democrats appear heartened.

"The Democratic Party is on the move again," said Mr. Rostenkowski, visibly proud of the individual tax cut program he introduced.

Targeting the low- and middle-income earners, the Democratic bill would give a family of four earning $10,000 a $362 tax cut in 1982, compared with $52 under the Reagan program. A two-earner $25,000-income family would get a $527 tax cut next year, under the Democratic version, $396 under Reagan's. A $35,000-income two-earner family would get a $1,013 cut from the Democratic bill, $700 under the Republican.

Overall, families earning under $50,000 would receive $31.5 billion in 1982 tax cuts in the Democratic version, $23.3 billion in the Republican. The over-$ 50,000 earners would receive $8.3 billion in tax reduction under the Democratic schedule, $12.4 billion under the Republican.

The super-earners, with incomes of $200,000 and above, would receive $12,000 more in tax breaks from the President's program. The Democrats also would make concessions to upper-income taxpayers -- lowering the maximum rate on ordinary income from 70 percent to 50 percent over two years, and lowering the capital gains rate to 20 percent.

In addition to their enthusiasm over these figures comparing their tax measure and the President's, the Democrats have been heartened by recent drops in Mr. Reagan's popularity rating. A Louis Harris poll has confirmed a drop in the President's popularity reported earlier in the week by the Gallup Organization (a 7 point decline in the Harris survey, 9 points in the Gallup), and a sharp rise in the President's disapproval rating.

The Harris survey backs some of the Democrats' own polls, which show Reagan's high personal performance rating offset by less enthusiastic review of specific actions. According to Harris, Reagan's marks for handling the economy have slipped from a 58-to- 36 percent positive rating to a near-even 51-to- 47 percent positive rating. The public already is growing impatient for gains against inflation, giving Reagan a 56-to-41 percent negative rating on "getting inflation under control."

"Support for Reagan's economic program is based largely on lack of public awareness of its contents, particularly its large tax cuts for the wealthy," argues Democratic pollster Vic Fingerhut. "As the public becomes more familiar with the specific cuts, support for Reagan's program is likely to drop, possibly precipitously."

Initially, 53 percent of the public approve of Reagan's budget and tax proposals and 37 percent oppose them, Fingerhut's surveys show. But when told "persons earning over $200,000 per year will receive several thousand dollars in tax benefits, while persons earning between $10,000 and $40,000 receive barely anything in tax cuts," support drops to only 21 percent, and opposition to 69 percent.

Hence the Democratic strategy will now be to dramatize a "class benefit" disparity between Republican and Democratic proposals, to portray the Republicans as partisans of the privileged.

On the budget, a 57 percent to 29 percent majority of the public "agree with President Reagan's plans for cutting the budget," but reject key specific cuts, Fingerhut says.

By 71 percent to 3 percent, they disapprove of cuts in medical programs for the elderly. By 52 percent to 10 percent, they disapprove of cuts in nutrition programs for children and needy mothers. They disapprove of proposed mass transit cuts by 54 percent to 11 percent. They reject cuts in student loans for middle- income families by 51 percent to 16 percent.

Even those who support Reagan's proposals expect Congress to carefully review and revise them, Fingerhut maintains.

"Eighty-three percent of Americans say 'Congress should seriously review and analyze the President's proposed budget' rather than 'just give the Reagan administration all the budget cuts it wants immediately,'" Fingerhut says. Posing the question in a pro- Reagan way, the public still rejects, by 52 percent to 34 percent, the argument "Congress ought to stop changing around President Reagan's budget-cutting proposals and just pass what he ha s proposed as soon as possible."