The federal spending target the Carter administration has tentatively set for next fiscal year would require cuts in a wide range of government programs traditionally dear to Democratic hearts, budget analysts say.
Almost all the cuts would come in domestic programs as opposed to defense, where Carter has promised to increase spending. High on the endangered list would be various federal grants to state and local governments.
The Carter budget for fiscal 1981 will come out in January or early February, just as next year's presidential primary season is beginning.
Federal spending this fiscal year, which began Oct. 1, is now thought likely to be about $550 billion. The target for next fiscal year set out by budget director James T. McIntrye -- though not yet finally embraced by Carter -- is just under $600 billion.
That is an increae of about $50 billion -- about enough to keep up with the expected 1980-1981 rate of inflation.
But virtually all of that $50 billion would be gobbled up by a relatively few giant programs or program areas: Social Security, Medicare and Medicaid, unemployment compensation, welfare and other such programs that rise automatically with inflation and, in some cases, recession; interest on the debt, which rises with interest rates generally; and defense, where Carter has promised to increase spending in real terms, beyond inflation, in part as the price for votes on his SALT treaty.
The result is that most of the hundreds of remaining, smaller programs would have to stand still in dollar terms, while inflation cuts what those dollars will buy and reduces the real level of services.
"You've got to squeeze," said Joseph Pechman, a budget expert who is director of economic studies at the Brookings Institution.
The programs likely to be squeezed the most are grant programs, which give money mainly to state and local governments, as opposed to the income transfer programs that mostly send benefits directly and more or less automatically to persons who qualify. State and local governments now derive about a fourth of their revenue from the federal treasury.
The Senate Budget Committee has worked up estimates suggesting the effect the Carter target would have.
Foreign aid would almost surely grow less than inflation, according to the committee. The same would probably be true for education and college aid, Head Start, revenue sharing, public sector jobs to combat unemployment, and outlays in such areas as natural resources, transportation, general science and space and technology.
Pressure on these programs will increase if the recession turns out to be more serious than the administration expects. Costs would rise for such programs as unemployment insurance and probably also for Social Secrutiy and welfare as workers are laid off, and in some cases retire earlier than planned. w
The $600 million ceiling has been set by the administration in hopes it can come close to balancing the budget.
If he sticks to this goal, Carter will be presenting a budget of restraint at precisely the time he will be head-to-head with Sen. Edward M. Kennedy (D-Mass.) in a race for the Democratic nomination.
Many of the primaries and delegate contests in which Carter and Kennedy will battle are in urban Democratic states where Carter's budget cuts may be resented. On the other hand, a policy of restraint in a time of inflation could win him votes.
Carter could also end up abandoning the balanced-budget goal and relaxing the $600 billion ceiling. But it seems more likely if there is a shift in policy, economic advisers will recommend a tax cut to fight the recession rather than a expansion of federal outlays.
The half-dozen or so programs that will eat up virtually all of the projected $50 billion increase in federal outlays make up well over two-thirds of the federal budget. They are:
Defense -- about one-quarter of the everall budget, will rise at least $15 billion in 1981 in order to meet Carter's goal of keeping defense outlays at least 3 percent ahead of inflation in 1981.
Social Security, welfare and retirement programs -- over one-third of the federal budget, will rise about $23 billion in 1981, largely because of increases in beneficiaries and automatic cost-of-living boosts to keep pace with inflation. Some programs in this category are theoretically controllable because they don't have automatic cost-of-living kickers, but as a practical matter it is virtually impossible to pare them back.
Medicare and Medicaid -- just under 10 percent of federal outlays, will rise about $7 billion in 1981 to meet rising hospital, drug and doctor costs.
Interest on the national debt -- now already over 10 percent of the budget, will rise perhaps as much as $3 billion to $4 billion because of the huge interest rates the government must pay for new money it is borrowing.