Budget director Bert Lance said yesterday there will be little read growth in government spending in the first full Carter administration budget, which the President will start working on Wednesday.
Warning that now is "the critical point in the process" of getting to a balanced budget by 1981, Lance said Carter is prepared to veto congressional appropriations and cut Cabinet spending requests in order to meet that goal.
The director of the Office of Management and Budget said Carter would "have to seriously consider" vetoing the Labor-Health, Education and Welfare appropriations bill if it reaches his desk will the extra money a House Appropriations subcommittee had added to it.
Lance said the extra $1.7 billion in funds added to the bill for fiscal 1978 would grow - "just in the normal course of events" - to $7 billion by fiscal 1981.
That kind of future growth in spending is "what's playing havoc with out ability" to control federal deficits, Lance said, adding that is why he and the President are determined to nip spending plans in the bud right now.
In an interview with reporters and editors of The Washington Post, Lance said Carter would receive an "overview" briefing Wednesday on the outlook for the fiscal 1979 budget, which he will send Congress next January. That will be the first budget over which Carter has complete control.
In the first three weeks of June, Lance said, Carter has set aside 22 hours to go over spending ceilings with individual Cabinet and agency heads.
Lance conceded that some Cabinet members are privately skeptical of Carter's claim that he will balance the budget the end of his first term, "Some of them say knowingly, 'Yeah, we're going to balance the budget', and then wink," Lance said.
But, he added, by the time they finish their sessions with the President they "will have a very, very direct, realistic view" of Carter's seriousness.
Lance said no specific target figure for fiscal 1979 spending would be set for some time, but said the departments would be told they could start no new programs" next year.
He said the growth of federal spending could be slightly higher than the rate of inflation, "but nor much," meaning that real spending will be held essentially flat in Carter's first budget by the end of his first term. "Some of them say knowingly, Yeah, we're going to balance the budget, and then wink," Lance said.
Lance said that approach will disappoint "those who want to see new programs and those who want to see increased governmental spending."
But, he said, "We've got to make some of those hard choices now. If we're not willing to make those choices in [fiscal] 1979, we won't be able to" balance the budget in fiscal 1981. "This is the critical point in the process . . . We either do it nor or not . . ."
The budget director said economic projections whow the budget can be balanced by the end of Carter's first term even if economic growth falls below the 6-per-cent-a-year level the administration has set as its target.
But he said that funds for increased welfare spending or national health insurance would be available only if "we get the highest economic projections".
Lance said "political risk" is inevitable "when you cut out something or take it away."
"But", he said, "my own personal feeling is that . . . being able to balance the budget and do something about the problem of inflation . . . is the most positive thing that anybody running for President of the United States could have . . . From a sheer political standpoint, being able to do this would be a tremendous plus."
In a related development, Carter met yesterday with agency officials to launch the process of zero-base budgeting in the government. That system, which Carter introduced to Georgia during his term as governor, is designed to force agencies to set stricker spending priorities on projects.
Lance said the zero-base reviews, expected to be available by next fall, will help set the finaal spending ceilings for the agencies' 1979 budgets.