The administration officially acknowledged yesterday that the 1982 and 1983 budget deficits will exceed $100 billion even if all of President Reagan's proposed spending cuts and tax increases are passed by Congress.
The new numbers are still $25 billion to $30 billion below those being used by many budget experts outside the administration. Estimates circulating privately within the administration also are much larger..
A document prepared last month by the Office of Management and Budget, and obtained by the Washington Post, indicated that the economic recovery predicted to begin in the second half of this year may well be weaker than the official forecast that calls for a 5.4 percent rate of real growth between mid-1982 and the end of 1983.
"With legislative stalemate over Reagan's budget proposals and recovery period borrowing requirements of $125-$190 billion hanging over the financial markets, there is a substantially lower probability that our assumed real GNP gross national product growth of 5.4 percent . . . will be achieved," the document said. "Dropping back the real GNP growth assumption to 4.2 percent--still an ambitious level--would add $17 billion to the FY fiscal year 1983 deficit and $100 billion over FY 1983-85."
The revised estimates released yesterday and required each April by the Budget Act left the administration's economic assumptions essentially unchanged despite growing skepticism among some Reagan administration economists that such growth rates are likely. After a sometimes pointed internal debate on whether to make any changes in the forecast, it was decided to leave them alone, administration sources said.
According to the new estimates, this year's deficit will be $100.5 billion instead of the $98.6 billion predicted in February because a $3.5 billion increase in outlays more than offset a $1.6 billion rise in estmated receipts.
The 1983 deficit was pegged at $101.9 billion, with spending up by $9.4 billion--primarily because of a large increase in expected farm price support payments--while estimated receipts are down by $1 billion. Originally the 1983 deficit was to be $91.5 billion.
The roughly $10 billion increase in the deficit persists from 1983 through 1987, when the deficit would still be $62.7 billion, according to the reestimates.
Many of the tax increases and spending cuts comprising the $56 billion package offered by Reagan in February have not been accepted by Congress, and the prospect of a string of huge deficits has led congressional leaders of both parties to insist the that president agree to major changes. After a long series of meetings among members of the House and Senate and a group of administraton officials led by presidential aide James A. Baker III, the outline of a possible compromise emerged this week.
However, some administration officials remain skeptical that the president will be willing to accept a key element of the compromise, a 4 percent personal income tax surcharge that would raise about $7 billion. Reagan has adamantly refused to consider any change in the 10 percent cut in personal taxes now scheduled for July 1983.
And House Speaker Thomas J. (Tip) O'Neill has said he is as adamant about refusing to consider any limit on cost-of-living increases in Social Security benefits as the president is about the third year of his tax cut. Another element of the compromise is a 4 percent cap on such increases from 1982 through 1986 and a three-month postponement of them each year from July 1 to October 1. The cap would reduce federal spending by about $20 billion in 1984, a figure which would rise to about $35 billion by 1986, administration sources said.
Other parts of the compromise include smaller increases in planned defense spending, a $5-a-barrel fee on oil imports that would raise between $12 billion and $15 billion, some other business tax increases, and additional spending cuts in domestic programs.
Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) joined other congressional leaders in asserting that the time has arrived for Reagan, O'Neill and Senate leaders to begin assembling a package from options that the negotiators have produced. In an apparent reference to both taxes and Social Security cuts, he said "no single item in the negotiations should be an ultimate stumbling block." Baker said the final work should begin "as soon as possible," presumably meaning next week.
White House spokesman Larry Speakes said from Barbados, where the president is on vacation, that the administration believes the new budget projections will be borne out if Congress approves its requested budget actions. The spokesman said the president had no specific comment on the new figures. "He has indicated in the past that it is hazardous to try to make assumptions out in the future," Speakes said
The largest increase in outlays in the new estimates was $4.1 billion in 1982 and $4.9 billion in 1983 for higher farm income support payments. Net interest payments are up because of higher expected interest rates.
At the same time, estimated outlays for unemployment benefits were lowered by $1.6 billion for 1982 because unemployment did not go up quite as fast as forecast.
The administration lowered its estimated receipts from sale of off-shore oil and gas leases by $2.3 billion in 1983.
Tax receipts are estimated to be $1.6 billion higher than expected in 1982 because of higher corporation tax payments. Some proposed changes in taxes and some technical reestimates lower receipts by about $1 billion in most later years.