The Carter administration will not propose any further cuts in major domestic spending programs in fiscal 1981, despite all its talk about fiscal austerity, according to top policy makers.
Officials say the new spending plan Carter will send Congress Jan. 2, will call for maintaining government services at their current levels even in the face of last year's inflation.
The election-year spending plan marks a sharp contrast to the budget Carter sent Congress a year ago, which called for slashing domestic spending by $6.9 billion -- drawing howls of protest from key Democratic constituent groups.
This year's budget plan, designed to avert similar complaints during the 1980 election campaign, is expected to provide full funding for such Democratic favorites as job programs, housing subsidies and antirecession aid to cities.
In fact, when Carter's promised increases in spending for defense are taken into account, the overall budget will show a very slight real growth.
Carter is expected to propose spending of between $615 billion and $620 billion, up from $550 billion to $560 billion this year, with a deficit of $15 billion, about half that now estimated for fiscal 1980.
The spending figure is up sharply from the $600-billion-to-$604-billion range that budget makers were considering only a few weeks ago. Administration officials say the rise reflects a worsened economic outlook, but outside experts are suspicious.
White House officials declined yesterday to say precisely what inflation rate the administration was using in adjusting current programs for the impact of price increases. If that figure proves unrealistically low, it could mean domestic programs actually would suffer an effective cutback.
Officially, the absence of further big cuts in domestic programs is being portrayed as a practical decision, reflecting both the outlook for a recession and the political realities of trying to push further cuts through Congress.
James T. McIntyre, director of the Office of Management and Budget, said in an interview the administration had decided not to propose further cuts in domestic programs because that would be "criticized as unrealistic."
McIntyre said the administration believes it "arrived at the appropriate degree of fiscal restraint" with last year's budget cutting. "Our idea," he said, "was to continue the fiscal restraint this year, but not to increase it." s
Nevertheless, other officials confirmed that the strategy was intended at least in part to avoid angering constituent groups that now benefit from the major domestic programs and to take the edge off the political problems Carter will face this year because of the economy.
With most economists now forecasting a visible downturn this year, the White House ordinarily would be expected to propose a tax cut. However, Carter has rejected any tax cut plans, at least for the moment, for fear of fueling inflation.
Officials said that if it were not for the forecast of a recession, the budget would be in balance this year. Carter earlier had pledged to balance the budget by fiscal 1981, but has postponed this for at least a year.
An early hint of Carter's budget strategy for fiscal 1981 came in a White House annoncement last week that the president would continue grants to states under the federal revenue-sharing program, despite earlier objections that they were unnecessary.
Carter earlier had expressed reservations that the $2.3 billion in aid to states was unneeded in view of their relatively sound fiscal positions. However, state and local officials, lobbying intensively, were able to reverse that position.
Officials say the bulk of increases in Carter's fiscal 1981 budget will be concentrated in two areas, defense spending and energy programs. Carter decided to boost military spending sharply in the face of the Iranian turmoil and pressure from Senate hawks.
Of the total rise, officials say that about two-thirds involves increases in so-called "uncontrollable" outlays, such as those for government entitlement programs, in which spending is boosted automatically to fit current caseloads.
Budget makers say $16 billion of the extra spending added to the budget in the past few weeks stems from more pessimistic assumptions about how the economy will perform this year and next. The administration earlier had had a somewhat more rosy forecast.
Carter is expected to predict that the economy will slump into a recession in the first half of this year with output growing by about 1.25 percent between now and year end, the jobless rate rising to 7.5 percent and inflation hovering around 10 percent.
However, budget experts outside the administration say the White House numbers do not seem to add up, at least at first blush. Some say they suspect the administration may be boosting spending for domestic programs more than their current pronouncements imply.
The new figures show that, overall, even with the absence of further cuts, total domestic outlays still will fall half a percentage point short of keeping up with inflation -- in contrast with military spending, which will post a rise of 3.5 percent.
The budget as a whole will be about half a percentage point larger than this year's spending total after adjustment for inflation. Carter will be aided by about $10 billion in extra revenues as a result of the oil profits tax now pending in Congress.