The White House has ordered government agencies to make the substantial new budget cuts proposed by President Reagan even though Congress has not yet acted on them, a tactic that promises sharp political conflict this fall.
The cuts ordered by the president's Office of Management and Budget will be significant for some of the government's larger and more popular programs. Title I education aid to low-income children, for example, would be cut 23 percent below the level recently approved by the House of Representatives. There would be cuts of similar depth for programs and agencies as varied as child nutrition and the Economic Development Administration.
This aggressive use of executive power together with the president's recent threats to veto appropriation bills that exceed administration targets recalls the bitter struggles over government spending that dominated the second Nixon administration. Senior officials who revealed the new plans acknowledged that they would provoke controversy, and also predicted that the next 90 days will be critical for the Reagan administration's latest efforts to control budget deficits and bring order to the nation's financial markets.
The White House has decided it can profit from the battle to come whether it wins or loses. If Democrats reject the administration's new demands for spending cuts, the White House reckons, they can then be blamed for any bad economic news between now and the 1982 congressional elections.
And no matter how Congress finally votes on the president's latest budget-cutting proposals, some administration officials take comfort from the fact that money will now be saved while the debate goes on, perhaps $1.5 billion a month.
In a bulletin circulated last Wednesday, the Office of Management and Budget informed government agencies of the plan to make the president's latest proposed cuts unilaterally. The OMB memo explained that the executive branch would formally notify Congress that it planned to "defer" spending in the amounts specified.
Deferral is a legal procedure that can be overturned by a majority vote of either house of Congress. The administration can send a separate deferral notice for each program it plans to cut, which would be a total of hundreds or even thousands. The White House is confident that Congress could not work through such a mass of paper to prevent the deferrals. This would allow the White House to hold down spending and keep Congress on the defensive while the two branches argue over the regular appropriation bills for fiscal 1982, which began Oct. 1.
It was the expiration of the old fiscal year on Sept. 30 that allowed the use of this new policy gambit. Congress has passed a "continuing resolution" to finance government operations while debate continues on the 1982 appropriation bills. An OMB spokesman said the planned deferrals, scheduled to be sent to Congress within a fortnight, will be for the duration of the continuing resolution, which expires on Nov. 20. Some senior officials expect Congress will have to pass another continuing resolution when the current one expires, and they would renew the deferral notices then.
The continuing resolution has an added attraction to administration accountants who worry most about budget deficits: it allows the Pentagon to continue spending only at last fiscal year's levels, which are much lower than the administration envisages for this year; and it does not permit the Pentagon to move forward with any new weapons system or program. As a result, the government will save about $1 billion a month in defense costs as long as the continuing resolution remains in force, according to a spokesman for Sen. Mark Hatfield (R-Ore.), a principal author of the resolution.
This savings comes at the expense of the defense buildup that is a key aspect of administration policy.
Hatfield, an opponent of increased defense spending who holds the key position of chairman of the Senate Appropriations Committee, would like to use the difference between the 1981 and 1982 defense spending levels as a bargaining chip with the administration. According to sources close to Hatfield, the senator is willing to give the administration most of what it wants for defense if it will come to terms quickly on the other pending money bills. But the administration's new tactics suggest it may not be in the hurry Hatfield has presumed.
Individual agencies are already calculating the program changes they will have to make to satisfy the new administration policy.
At the Department of Interior, for example, the budget will have to be cut by $524 million on an annual basis. If allowed to stand, this would mean $117 million less for Indian programs, $60 million less for operating the national parks, and $33 million less for the Central Arizona Water Project. That is the one that Interior Secretary James G. Watt recently said he was having trouble concentrating on because of hostile questioning from a House committee chaired by Rep. Morris K. Udall (D-Ariz.), a principal backer of the project.
At the Environmental Protection Agency, the plan is to fire enough people to save $70 million on salaries; to cut $23 million from research and development projectss; to cut $24 million from the Superfund program to clean up abandoned chemical waste dumps, and to make other reductions.
Senior White House officials say they cannot predict precisely how the House and Senate will handle the budget issues in the coming weeks. But they believe that by seizing the offensive now, they can apply pressure that will force a reluctant Congress to take further deficit-reducing steps as Reagan has proposed.
The same officials acknowledge that a series of presidential vetoes of appropriation bills might simply paralyze Congress, requiring more continuing resolutions. But, they argue, this would permit the government to save more money by using deferrals, and thus help hold spending down.
There is a new tone in the latest administration thinking about Congress. Earlier this year the White House fought to win approval of its own specific ideas for both tax and spending reductions. Now the White House seems willing to accept substantial changes in its latest proposals, outlined by Reagan on Sept. 24, provided they lead to real budget savings. "They're baking their own cake up there," one administration official said of the goings-on on Capitol Hill. He was not upset at the prospect.
Indeed, some officials hope Congress will go further than Reagan asked in raising new revenues and reducing the rate of growth of defense spending. Leading Senate Republicans have already indicated that they would like at least to double the president's proposal to cut $2 billion out of defense growth in fiscal 1982, and also perhaps double the $3 billion in new revenues Reagan proposed.
But a harmonious resolution of the budget issues seems unlikely, particularly the largest of the president's proposals, which was to cut all but the government's basic benefits programs on the domestic side 12 percent below the levels Reagan first proposed last March. Not only Democrats but also a large group of moderate Republicans oppose many of these cuts, which are the ones the administration now proposes to make unilaterally by using deferrals.
The caucus of Northeastern and Midwestern Republicans in the House that calls itself the "Gypsy Moths" thought it had a deal with the administration last spring to protect programs like low income energy assistance and Amtrak that were targets of the first Reagan budget cuts. But under the new tactic of making unilateral cuts 12 percent below the reduced spending levels the president proposed then, such programs will be severely trimmed. For example, low income energy assistance would fall 32 percent below the level the "Gypsy Moths" thought they had negotiated. Amtrak would fall short by 24 percent.
An OMB spokesman said the administration would not try to use the new tactic of unilateral cuts to wipe out programs like the Legal Services Corp. that it is seeking to eliminate by legislation, nor to make substantial reductions in force of federal employes. Such moves would probably be illegal as part of a deferral.
Though the administration will generally talk about "12 percent cuts," in fact the reductions it envisages go much deeper into many big social programs, compared to spending levels in the fiscal year just ended.
According to figures compiled by the Children's Defense Fund, under the new plan Title I education aid for deprived children will be 37.5 percent below 1981 levels; maternal and child health programs will fall 41.4 percent; the child nutrition program will be cut 30.9 percent.