President Ford's federal budget for fiscal year 1978 proposes a $3.2 billion increase in outlays for commerce and transportation programs and forecasts that growing postal deficits will force the U.S. postal Service to seek higher rates.
In Mr. Ford's final budget proposal, delivered to Congress yesterday, $19.3 billion of outlays are outlined compared with $16.1 billion in the current year, which ends Sept. 30.
The largest single item in the budget is spending for highway improvement and construction - a record $7.2 billion, compared with $6.1 billion in the current year. Mr. Ford said while the outlays for highways would, be at the highest level to date, they should decline to $6.9 billion in fiscal 1979.
America's interstate highway system, begun in the 1950s, has cost about $60 billion to date. About 85 per cent of the 39,000-mile system has been completed and the remaining highway links are due to be finished by 1990.
The outgoing Republican administration's proposed budget for fiscal 1978 includes a $6.5 billion ceiling on federal-aid highway spending. Without such a ceiling, Mr. Ford said, more than $5 billion of previously authorized highway funds also would be available for spending.
"Such funds probably could not be utilized by states," based on yearly highway spending trends, Mr. Ford stated. If the additional money was obligated, he contended, it would accentuate a financial "peaks and valleys" situation that has plagued the highway construction industry in recent years.
Democratic sources on Capitol Hill said, however, that President-elect Jimmy Carter may propose utilizing some of the already authorized highway spending as a method of reducing unemployment and they forecast that Congress would support a ceiling higher than $6.5 billion.
The outgoing administration also proposed an increase in mass transit aid yesterday, with an emphasis on operating subsidy grants and transfer of interstate highway money to public transportation by local governments. For fiscal 1978, Mr. Ford proposed $2.3 billion for mass transit, up 7 per cent from the current year and up 54 per cent from fiscal 1976.
In his budget message, the President proposed that, in the future, operating subsidies be limited to 80 per cent of all new transit aid, to "foster capital investment and replacement, and encourage greater productivity and other restraint in operating costs."
Among other proposals made yesterday:
For the 10 major, independent regulatory agencies, there would be an increase in personnel of only 168 positions. This 1.2 per cent increase is lower than the averge for all federal programs and reflects the outgoing administration's attempts to cut the costs of economic regulation.
Based on estimated receipts of $15.1 billion at the U.S. Postal Service in fiscal 1978, including $1.7 billion of federal appropriations, there will be a deficit of $1.74 billion"and the service will need to request an increase in rates."