ALONG ABOUT July 15, President Carter's budget office will be forced to confess that all of the talk about a budget balance for fiscal 1981 has been a deception. A Realistic, honest mid-year budget review must concede that instead of the slight surplus Carter promised on March 14, the red ink will be at least $20 billion.
Yet Carter and his chief aides keep up the pretense that a balanced budget is their goal -- as if it were still achievable. An effort has been made to convince an unsuspecting public that a balanced budget somehow depends on whether Congress adds or trims a measly few billion from the present budget resolution.
The fact is that the steep recession -- which President Carter belatedly admits is gripping the nation -- has killed all chances for a balanced budget. The calculation is that for every one percent increase in the national unemployment rate, the budget suffers a $20 billion loss from declining federal revenues and higher costs for unemployment insurance.
At 7.8 percent in May (highest in Carter's 3 1/2 years), unemployment is already a half point over the 7 1/4 percent rate the White House projected for the end of 1980. Most economists see the unemployment rate hitting close to 9 percent.
The only question is by how much the budget will be in deficit -- and that depends on how deep the recession goes, and how soon Congress takes actions to cut taxes.
But stubbornly, almost blindly, the administration refuses to face reality. On Capitol Hill 10 days ago, Treasury Secretary G. William Miller still was pushing the unreachable goal for fiscal 1981.
HE DID IT AGAIN in New Orleans this past week at an international bankers meeting. But he added that if the recession proved "sharper than we expect," losing control of the budget would be a "natural, automatic effect."
This is a good example of the administration's disingenuousness (which is the kindest word I can find in the dictionary).
The "automatic effect" of revenue loss and larger outlays for unemployment is clear from the degree of recession already evident, according to the administration's own internal calculations.
As Eileen Shanahan pointed out in a Washington Star commentary the other day, confirmation in July of a prospective big budget deficit for fiscal 1981 could upset the public, as well as financial markets, whether or not budget deficits in recessionary periods in reality add to inflationary problems.
One of the shrewdest money-market men in New York tells me, "The boys in Wall Street will be stunned when they see the red ink in the budget." When I protested that they must be sophisticated enought to know the real score on the budget, he responded: "Either they're not as sophisticated as you think, or they just don't want to know."
Of course, the eventual budget deficit for fiscal 1981 is likely to be much more than $20 billion. Assuming, as most analysts do, that President Carter's firm promise of no tax cut can be ignored, the range of probabilities goes much higher.
U.S. Chamber of Commerce economists, for example, figure the fiscal 1981 deficit at about $55 billion. Lawrence Chimerine of Chase Econometrics estimates the red ink at $70 billion, assuming a $25 billion tax reduction effective Oct. 1, and the scuttling of Carter's $12 billion import oil fee.
Even if a tax cut does not take place until early in 1981, these are the rough levels of deficit almost universally calculated everywhere in Washington outside of 1600 Pennsylvania Avenue.
SUCH BOXCAR deficits by themselves should not cause undue alarm, but they probably will. A government budget deficit in these times is a psychological hazard to financial and foreign exchange markets, even though other major nations have their own -- and bigger -- deficit problems.
The main trouble we face is that at the very time President Carter reasserts that he will "always tells the truth," there is a cavernous gap between what is really going on in the economy and the double-talk being fed the public in this election year.