Congress passed President Reagan's Economic Recovery Tax Act on August 4, 1981. Coupled with cuts in federal spending of $35.2 billion, with an additional $13 billion in cuts now under consideration, the Reagan program represents the most radical revision in federal economic policy since the Internal Revenue Code was amended in 1954. The theory behind these changes has gained the popular title of "supply-side economics." Proponents of this theory maintain that the most advantageous and effective way of promoting growth in the economy and prosperity at all levels of society is to direct income back to the investors who originally generated it. According to this view, the federal government should not seek to redistribute income, taking from those who have more and giving to those who have less through such devices as a progressive income tax and transfer payments (food stamps, welfare, and the like), but should instead allow investors to reap a larger share of their earnings so that they will have more capital to invest. The effect of such a policy, so the supply-siders argue, would be to encourage investment, thus increasing the size of the economic pie and of the pieces that compose it. To this end, Congress, under the direction of President Reagan, enacted a series of measures that will decrease tax revenue by approximately $2 billion in fiscal 1981, with the decreases expanding to $150 billion by 1984. It is hoped that allowing these revenues to remain in the private sector will free up more money for investment and, consequently, fuel economic growth. Although the President obtained a remarkable bipartisan endorsement of this approach in Congress this summer, his economic policies have hardly received universal support. Liberal critics contend that they are unfair, pointing out that wealthier individuals benefit far more from an across-the-board cut in personal-income taxes than do less wealthy taxpayers. Some economic analysts are skeptical that the projected growth in economic activity and capital formation will actually occur. They argue that with continuing high interest rates, an oncoming recession, and the likely prospect of only slight rollbacks in the federal deficit in coming years, the positive investment climate crucial to the success of Reagan's policies will fail to materialize. Supporters of the President respond that it is improper to judge his economic policies a failure when they only began to take effect on October 1. Budget director David Stockman complained, "It takes a little nerve, a little gall, to pronounce the program a failure, since they [ the critics] spent 22 years creating the economic mess in this country." Whether the program will succeed or fail is, of course, still a matter of conjecture. In spite of this uncertainty, however, business people across the country are faced with the challenge of making plans and setting policies that will most benefit them and their organizations in the coming months and years. The hospitality industry offers no exception to this rule. In an effort to discover how the industry is reacting to the economic changes instituted by the Reagan administration, The Quarterly contacted a number of industry leaders and asked them about their reactions to the Reagan policies, their views of what could be expected in the coming months, and the strategies they would be following to meet the changing times. Some of their remarks follow.