President Carter yesterday sent Congress $17.2 billion worth of proposed spending cuts for fiscal 1981, promised last month as part of his latest anti-inflation drive.
The cuts, along with a new tax on gasoline and revised estimates of revenues and other spending, would produce a $16.5 billion surplus instead of the $15.8 billion deficit Carter proposed in January.
The big swing in the budget is mostly on the revenue side, with receipts up $28 billion from the January level. Before the new cuts were made, higher inflation and faster rates of spending, such as for military hardware already ordered, had pushed up outlay estimates by $13 billion.
Carter's new spending total is $611.5 billion, down only $4.3 billion from the original figure.
Estimates of defense costs, for instance, ballooned by $5.7 billion between January and March. Then $1.4 billion in cuts were made from the higher figure, leaving the new total at $150.5 billion.
As a result of all this up and down, defense spending will now account for 24.6 percent of the total 1981 budget instead of the 23.7 percent Carter first proposed. Meanwhile, defense outlays for 1980 were also revised upward by $3.6 billion to reach $134 billion.
The largest cuts proposed by Carter involve a reduction in public service jobs, postponing buying oil for the strategic petroleum reserve, annual instead of semiannual cost-of-living increases in federal pensions and food stamp benefits, ending general revenue sharing for states, killing proposed anti-recession assistance for localities and putting off welfare revision for a year.
Because of the projected surplus, the public debt would be reduced, cutting interest payments by $2.2 billion. But as with defense spending, the actual new total is $1.6 billion higher than before because interest rates are up more than the size of the debt is down.
Lane Kirkland, president of the AFL-CIO, blasted Carter in a speech yesterday to a building trades convention here, labeling the budget-balancing drive as "sheer madness" that will add half a million people to the unemployment rolls.
"If the Democratic Party is now Hooverist Republican . . . we in the labor movement will find it very hard indeed to maintain our political enthusiasm. When there is so little difference [between parties], there is so little to choose and so much to lose," Kirkland declared.
He urged union members to "rally and resist" Carter's proposed cuts.
The U.S. Conference of Mayors complained that the 1981 budget revisions add up to "a minus sign for the nation's cities." The mayors and many other groups affected by the cuts have been lobbying for weeks trying to head off the cuts as Congress deals with the budget this year.
The House Budget Committee has already approved a budget resolution with a spending total of $611.8 billion, almost exactly what Carter proposed yesterday but with some differences in details.
On the Senate side, Budget Committee Chairman Edmund S. Muskie (D-Maine) has said his committee will also approve a balanced budget for 1981.
At a Pentagon briefing, defense officials said the budget-balancing effort will take .2 percentage point off the 5.4 percent "real" growth increase they had hoped to achieve for the military between fiscal 1980 and 1981.
More significantly, these defense officials refused to commit themselves to maintain at least a 5.2 percent real growth in the Pentagon's total budget if inflation galloped ahead of the assumed rate of 9.9 percent for fiscal 1981.
They promised to make "further adjustments" if necessary, but declined to embrace 5.2 percent as the minimum growth, after allowing for inflation.
Pentagon officials said that unanticipated operations in the Indian Ocean and buying ships and equipment for the Rapid Deployment Force, plus soaring fuel costs and inflation, required an extra $3.23 billion in fiscal 1980 and $4.52 billion more in fiscal 1981 to make their original budgets whole.
However, to contribute to budget balancing, the Pentagon is asking Congress for $2.3 billion in supplemental funds for fiscal 1980 and $2.9 billion additional for fiscal 1981, meaning cuts to make up the difference.
Some of the shortfall, $928 million in fiscal 1980 and $1.6 billion in fiscal 1981, will be absorbed by cutting programs championed by influential members of Congress, intensifying the ongoing battle of the Pentagon budget.
Included on the fiscal 1980 list of procurement cuts are 12 A7K two-seat attack bombers for the National Guard that Sen. John G. Tower (R-Tex.), ranking Republican on the Senate Armed Services Committee, insists on buying.Canceling that purchase would save $113 million, according to the Pentagon.
Either Muskie or Chairman Warren G. Magnuson (D-Wash.) of the Senate Appropriations Committee will be unhappy about a $190 million FFG guided missile frigate being on the list. The ships are built in both their states.The Pentagon did not specify which yard would lose the order.
Ford Aerospace and General Dynamics will try to mobilize their congressional delegations against the Pentagon's decision to delay the Army's DIVAD antiaircraft gun by a year. The Pentagon said the stretchout will save $100 million in fiscal 1981.