The Reagan administration budget calls for eliminating Maritime Administration loan guarantees for ships, slashing the Housing and Urban Development Department's housing subsidies and cutting expenditures by the U.S. Customs Service to stop drug smuggling.
But the White House plan to cut the federal deficit calls for spending more money to pay the interest on the government's debts and increasing funds for the Secret Service and the Internal Revenue Service, a review of agency budgets shows.
The U.S. Customs Service, a key player in the antidrug war led by Vice President Bush, faces a reduction in personnel and in budget authority for the air interdiction program which is supposed to combat the illegal entry of drugs. The appropriation for operations and maintenance for the air program would be reduced from $89.9 million for fiscal 1986 to $54.7 million for fiscal 1987. Equipment expenditures would be cut from $23 million to $5.6 million.
The Internal Revenue Service, on the other hand, is due to get a boost in budget authority from $1.065 billion to $1.262 billion for processing tax returns.
The IRS examination and appeals budget also is higher -- up from $1.4 billion in fiscal 1986 to $1.6 billion in 1987. The funds pay for examination of tax returns and settlement of taxpayer appeals of examinations. Investigation, collection and other taxpayer-service spending is requested to increase from $1.064 billion in fiscal 1986 to $1.136 billion in 1987.
The U.S. Secret Service also will get a budget boost from $294 million in fiscal 1986 to $307 million in 1987.
One giant expense, as usual, is the interest on the public debt, which grew from $179.1 billion in 1985 to an estimated $206.854 billion in 1987.
The Commerce Department has put extra money in its budget to increase its export-control activities and to meet the increased volume and complexity of unfair-trade complaints that it must investigate. An added 13 positions and budget increases of $2.2 million will go for export controls, while 55 more positions and $2.4 million will be allocated for trade-complaint investigations.
At the same time, the administration once again called for eliminating trade-adjustment assistance paid to workers and companies hurt by surging imports.
The Export-Import Bank of the United States lost $1.1 billion in direct credits, a program that President Reagan previously has said he wants to eliminate. To replace it, however, the bank is offering a new interest-rate-subsidy plan that allows the bank -- which supports sales of American products overseas by guaranteeing loans -- to provide loans at less than commercial bank rates. Maritime Administration
The Reagan administration proposed abolishing a controversial ship-financing program that has been hit by $865 million in defaults during the past 3 1/2 years.
The call for killing the 47-year-old federal ship-loan guarantee program comes only one week after one of its biggest borrowers, Global Marine Inc., filed for bankruptcy, saying it could not pay its $220 million in debts on 12 oil-drilling vessels.
"With the oil price crunch, we might experience heavier defaults," said Ray Karam, deputy assistant secretary of Transportation. "It's impossible to say when a company is going to go belly up."
The Maritime Administration, which already has had to borrow from the Treasury to cover defaults, projects that total defaults will reach $600 million over the next two fiscal years.
Designed to promote work for U.S. shipyards, the ship-loan guarantee program has been devastated by a spate of risky investments, the worldwide shipping slump and the recent plunge in oil prices. Nearly one-third of the $6.5 billion in outstanding loan guarantees are for oil-drilling rigs and related vessels that are threatened by the recent drop in oil prices. Housing and Urban Development
The Department of Housing and Urban Development slashed its fiscal 1987 budget request to $5.5 billion, about one-third the amount Congress appropriated for the agency this year.
The HUD budget would eliminate all funds for public housing modernization except emergency repair work, limit eligibility for loans insured by the Federal Housing Administration while sharply raising their cost and hold off spending billions of dollars already appropriated for housing aid.
HUD would like to defer until next year spending $2.3 billion in fiscal 1986 subsidized-housing funds and $500 million in Community Development Block Grant money in this year's budget. HUD also wants to rescind $5.1 billion appropriated for fiscal 1986, nearly all of it for subsidized-housing programs.
The fiscal 1987 budget proposes limiting Federal Housing Administration mortgage insurance to home buyers with incomes below $40,000 and eliminating insurance for investors and buyers of vacation homes. The fee paid by purchasers of single-family homes for FHA insurance would be increased from 3.8 to 5 percent of the amount of the loan.
New housing assistance for poor Americans would be limited to 50,000 families who would receive vouchers for a portion of their rent. The vouchers -- good for only five years, unlike most other programs -- are less expensive than public housing, Section 8 certificates and constructing new housing.
HUD's Urban Development Action Grant program would be eliminated, with about $206.4 million in unspent funds returned to the Treasury. A rental housing development grant program would die in fiscal 1987, and HUD proposed to rescind the $75 million appropriated for it in 1986. The agency is requesting $2.1 billion in Community Development Block Grant funds to be added to $500 million in fiscal 1986 appropriations it would like to defer until next year.
Public housing operating subsidies would be "virtually fully funded," HUD said.
The agency proposes reducing its full-time, permanent positions from 11,183 to 10,795. HUD Secretary Samuel R. Pierce Jr. said he hopes to achieve the reduction through attrition but would not rule out a RIF (reduction in force). SEC
The Securities and Exchange Commission's budget request for fiscal 1987 would reduce the agency's spending by more than $1 million, or about 1 percent, below the amount appropriated by Congress for the current fiscal year.
However, the fiscal 1987 request represents an increase in agency spending over this year's level, once the budget cuts required by the Gramm-Rudman-Hollings legislation are imposed.
The administration's fiscal 1987 budget provides $110 million for the SEC. Congress had appropriated $111.1 million for the SEC this year, but under Gramm-Rudman-Hollings, that total will shrink to $106.3 million compared with $105.6 million for fiscal 1985.
The cutback this year will fall evenly across the agency, an SEC official said. Spending will continue to be divided among these priorities: fraud prevention, with 32 percent of the fiscal 1987 budget; securities disclosure, 24 percent; administration, 13 percent; regulation and supervision of securities markets, 12 percent; investment management regulation, 11 percent; legal services, 6 percent; and economic research, 2 percent. CFTC
The administration's budget would slash about $4 million requested by the Commodity Futures Trading Commission to police futures markets, which are rapidly growing because of booming trading in new financial futures contracts.
The fiscal 1987 budget request for the CFTC of $30.42 million includes 508 staff positions in contrast to the current budget of $27.98 million and 493 positions. The CFTC had requested $34.2 million for the upcoming fiscal year for a projected across-the-board expansion. A spokeswoman said no particular programs would suffer under the administration's plan. FCC
The Federal Communications Commission proposed a fiscal 1987 budget of $96.36 million and 1,855 full-time permanent positions, an increase of $1.96 million and 20 positions over this fiscal year.
The agency had a budget of $95.44 million in fiscal 1985. For fiscal 1986, the FCC has appropriated $94.4 million, but will take a cut of 4.3 percent, or slightly more than $4 million, because of the Gramm-Rudman-Hollings deficit reduction act.