THE CARTER ADMINISTRATION wants you to know that its budget for 1981, published yesterday, is tight as a drum. It's rigorous, responsible and severely anti-inflationary, according to a chorus of official voices. Maybe so -- but you shouldn't let your attention be diverted from the current budget, which seems to have become strangely fatter since last fall.
The budget for 1981, which doesn't go into effect until next October, is at present a secondary matter. It will be largely formed by questions that have not yet been answered. One question is whether, and how much, President Carter will decide to increase defense spending. The present version is based on policy as it stood last summer, with the 3 percent annual rise to which the United States has been committed for the past two years. If there is to be a reaction to events in Afghanistan and the Persian Gulf, it will have to be added to the budget that appeared yesterday. The other question is, of course, whether the recession forecast continuously since last spring will actually appear, and when. These open questions make writing the budget more uncertain than usual -- and the labor of reading it less enlightening than ever.
Instead, it is useful to look at the three-year pattern that is emerging from last year to next. That pattern is not reassuring. The Carter administration is letting the current budget go slack; it is an election year. Restraint is postponed until next year.
The budget for fiscal 1979, which ended last September, turned out to be significantly more restrictive than the White House expected, mainly because inflation pushed up tax receipts. But, oddly, the consequences were the opposite of those you'd normally expect. Unemployment ran lower than forecast, and inflation notoriously went nearly twice as high. It was a warning that the administration was still underestimating the force of inflation and overestimating the danger of unemployment.
A year ago, when it brought out the 1980 budget, the administration emphasized that it had kept the deficit under $30 billion. Congress, with great travail, managed to do the same. Its second budget resolution, passed last November, held the deficit to $29.8 billion. But now the administration reports that it's going to be about $10 billion larger than that.There is the money for the embargoed grain, and for more mortgage assistance, and for transportation, and for a little of this and a little of that.
When the federal government steps up defense spending, the wave of inflation begins as soon as the contractors begin tooling up. That happened in 1965, and the seeds of the present inflation were planted then -- when Lyndon Johnson refused to seek the increase in taxes necessary to offset it.
Perhaps it is unrealistic to suggest t tax increase in an election year. Certainly Mr. Carter thinks so. The administration would prefer that you concentrate on all the rigor and restraint that, at least according to present plans, will come after the election in the next budget. But it's the current budget that counts -- and that one is moving toward a higher deficit and higher inflation.