The Reagan administration is considering selling excess federal land and other property as a limited means of reducing the federal debt, presidential counselor Edwin Meese III said yesterday. Federal land sales are "a very alive" issue for the forthcoming fiscal 1983 budget, a budget official later confirmed.
President Reagan met yesterday with senior aides to discuss that budget, but postponed final decisions until next week or even later, a White House spokesman said. The president also ordered a halt to further public discussion of the budget by administration officials from now until the State of the Union message on Jan. 26 so that he has "an opportunity to have full deliberations" in private, White House communications director David Gergen said.
The most difficult issue facing the president is whether to raise taxes, as most of his advisers reportedly favor, in order to narrow the large federal budget deficits otherwise projected for fiscal years 1983 and 1984.
Although there is no single set of proposals for tax increases behind which officials are united, the president accused them of "ganging up on him" after one meeting when taxes were discussed, a senior official said this week.
Treasury Secretary Donald T. Regan, who had previously held out against tax increases, said Wednesday that he expected the president would propose some additional excise or consumption taxes for 1983 and 1984 on top of the $22 billion of "loophole closers" that Reagan originally suggested last September.
But yesterday Rep. Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee, warned he would look with disfavor on increases in excise and consumption taxes as being regressive. Details on A6. And yesterday, Gergen insisted that Reagan "has not changed his views" and continued to look with disfavor on tax increases.
High officials said after yesterday's meetings that Reagan had not yet made up his mind.
The president, in addition to the tax and deficit question, is considering new steps in the 1983 budget toward the revised form of federalism which he has long favored, sources said. He is reportedly considering ideas under which the federal government might take over more of the states' share of some major programs, such as Medicaid, if the states would in turn take on more of the burden of other programs such as aid to families with dependent children (AFDC). However, White House sources said the president has made no such decision as yet.
A revenue turn-back to the states is also under consideration. This would most likely involve raising excise taxes at the federal level and returning some of the revenue to the states, sources said.
Other budget decisions already made include a 15 percent increase in defense spending for fiscal 1983. This would take defense spending to about $220 billion, and be equivalent to a real increase after inflation of about 7 percent from 1982. Reagan has apparently ruled out saving money by paring his planned defense build up.
Reagan has also agreed to just over $30 billion in further cuts in domestic spending programs, of which $10 billion to $15 billion will be in so-called entitlement or basic benefit programs. And he may propose still more spending cuts before he is through, aides have said. Meese, speaking at a Washington Post luncheon for business leaders, emphasized the administration's desire to change "the basic laws" governing entitlement programs. He said that the White House was looking at a number of ways to reduce outstanding federal debt, for example using "unnecessary federal or public property."
Although Meese suggested that any money raised this way should be put into a separate "capital" account, and not used directly to reduce the budget deficit, it would have the "practical effect" in financial markets of cutting the deficit and so easing the pressures of high interest rates, a budget official said later.
A new trust fund could be set up which would get revenues from land sales and use them to purchase government debt, the offical suggested. Such sales could raise $2 billion or $3 billion a year. This would reduce the budget deficit.
Meese conceded that the fiscal 1982 budget had been "as much of a quick fix as possible."