House Budget Committee chairman Robert N. Glaimo (D-Conn.) yesterday said that some of President Carter's economic and budgetary goals are unrealistic, and the congressman offered his own 1978 budget proposal with a deficit $4.7 billion bigger than the President's.
Giaimo also said he anticipates higher unemployment and lower economic growth than does the President, and he warned that the administration's plan to increase farm price supports will add another $1.5 billion to $3.5 billion to federal spending in fiscal year 1978, which starts Oct. 1.
The Giaimo budget is the base from which the House Budget Committee will develop the tentative federal budget for fiscal 1978, which must clear the House and Senate by May 15. The House committee begins work this morning, Senate counterpart starts next week.
Giaimo told reporters yesterday he wants to spend $460.6 billion in fiscal year 1978 and expects the treasury take in $398.2 billion in revenues, resulting in a deficit of $62.4 billion. In his revisions of former President Ford's 1978 budget, Carter projected spending of $459.4 billion, revenues of $401.6 billion and a deficit of $57.7 billion.
The House proposal also reduces defense spending to $2.3 billion below the level advocated by Carter and cuts $500 million from international spending, including a cut in lending by the Export-Import Bank.
But it adds $1.1 billion to Carter's proposal for income security outlays and adds $635 billion to his proposal for education and training, and $1.2 billion to pay interest on the federal debt.
The $62.4 billion deficit anticipated by Giaimo is relatively close to the record $69.8 billion deficit the government plans to run in the current fiscal year.
But Giaimo is correct that the agricultural price supports proposed by the administration could cost an additional $3.5 billion, the deficit could climb as high as $66 billion.
Bert Lance, director of the Office of Management and Budget, said in telephone interview that the administration's price support proposals will "have some significant budget impact," but that his office has not yet analyzed the proposals sufficiently to estimate their total cost.
Furthermore, Giaimo said that the budget resolution he will propose will say that if the economic recovery "under way does not proceed satisfactorily during the summer months, it will be necessary for the Congress to provide additional economid stimulus" in the final budget it adopts in September.
While the budget targets Congress sets on May 15 are only goals - although ones the committee and Congress try to adhere to - the September budget resolution sets a binding spending ceiling and revenue floor that can be changed only by a special act of Congress.
President Carter and his officials maintain that the federal budget can be balanced by fiscal 1981, which starts Oct. 1, 1980, but observers, including the Congressional Budget Office, say a balanced budget will be nearly impossible to achieve.
Yesterday's moves by the administration to boost farm price supports and Giaimo's statement that Carter's economic projections are too optimistic point up the difficulty the administration will face in reaching its goal.
Much of the contrast between the Giaimo and Carter proposals are due to different expectations about how well the economy will perform between the end of 1977 and the end of 1978. Both Carter and Giaimo include the second year of the two-year stimulus package proposed by Carter to boost economic growth.
Carter assumes the economy will grow at a 5.5 per cent pace during 1978, while House staff economists project growth of 4.5 per cent. The lower growth rate reduces revenues by $2.5 billion because the more sluggist economy results in lower sales and higher unemployment. While President Carter anticipates a 6 per cent unemployment rate in late 1978, Giaimo expects a 6.3 per cent rate.
Nancy Teeters, chief economist of the House committee, said the President's economic projections are "at the upper end of the optimistic range."
Giaimo also vowed to fight for a number of reforms which would reduce outlays by $2.4 billion - many of which Carter also backs.
Both Giaimo and Carter want to end portions of the impact aid program which sends about $450 million a year to school districts with various types of federal installations. The Washington area is probably the biggest recipient of this impact aid.
Every president since Eisenhower has proposed to eliminate this type of aid, but Congress has resisted, in large part because nearly every congressional district receives some of this aid.
Giaimo also backs Carter's proposal to limit increases in hospital revenues to 10 per cent to "reduce federal payments to hospitals made under the Medicare and Medicaid programs."