A second small package of rescissions and deferrals for federal spending in the current fiscal year has been sent to congressmen, although the details are not yet available to the press.
Edwin L. Harper, deputy director of the Office of Management and Budget, told a breakfast meeting of reporters that the administration proposed to save $361 million in fiscal 1981 from two packages of rescissions and deferrals. The first went up on Monday and would save just $15 million, and the next is to be announced on June 14 and is estimated to save $346 million.
The search for new spending cuts started when the administation realized that spending was overshooting its 1981 targets and financial markets were worried about the budget deficit. Although the rescissions and deferrals are tiny in comparison with the total budget, the administation is now "quite confident" that spending can be kept within $6 billion of its original target for 1981, a budget spokesman said yesterday.
Charges in the president's tax proposals, in particular a delay in the personal-tax-rate cuts from July to October of this year, will save the administration an additional $6.4 billion in revenues for 1981. There could be a further $2.5 billion trimmed from the budget deficit if the tax bill eventually is passed so late that business does not claim its 1981 reductions until after the beginning of fiscal 1982 in October.
Administration officials now believe that the 1981 budget deficit will stay on or below the $54.5 billion target announced in February.
Harper also told reporters that fraud, waste and abuse, which Reagan pledged himself to address, were a "major federal problem," adding that the Cabinet recently spent 45 minutes discussing how to deal with it. For fiscal 1982 the administration's budget assumes $1 billion of saving from the inspector-audited elimination of waste, fraud and abuse, he said.
Harper said that an estimated $4 billion was saved in fiscal 1980 by rooting out fraud, waste and abuse. More than half of this was in the Defense Department, which does not have statutory inspectors general, he said.
A budget spokesman later explained that the adminstration believes up to $5 billion will be saved overall in fiscal 1982 from improved spending control and management.
Harper later sent a letter to reporters at yesterday's breakfast outlining slightly different figures. These showed that $1.35 billion of spending was questioned by IGs and saved in fiscal 1980, while in the first six months of this year preliminary reports suggest that $1.169 billion has been questioned by the IGs. He said this represented a considerable achievement. q
The second rescissions package will include cuts in spending on low-priority roads and trails in national parks and by ending the present forgiveness of student loans given out under the national defense student loan program when the students become teachers. Yesterday's package included cuts in the National Endowment for the Arts and the National Endowment for Humanities.