Office of Management and Budget Director David A. Stockman said yesterday that the administration's spending program for the 1983 fiscal year will include "a major, sweeping program" to hold the deficit below current projections.
At the same time, Stockman said the burden was on Congress to decide how big the deficits are going to be.
Though administration officials in briefings last week said the 1983 deficit would be more than $90 billion, second highest in history after the current year, Stockman said yesterday that "when the budget comes out next week, it will be clear that the large deficits that have been rumored will not be there."
The budget will propose reductions in payments for social welfare and pension programs, he said, and some "management initiatives to hold down spending." The proposals will confront Congress with "tough choices," he said, and it will be up to Congress to "take the steps necessary to trim the size of government" or "allow huge deficits to occur that will interrupt the economic recovery. It's as simple as that."
He said the breathtaking deficit projections that have circulated since President Reagan decided against tax increases next year--projections by the Congressional Budget Office, for instance, range up to $200 billion a year--assume that "you do nothing, you sit on your hands and allow the momentum of spending to go forward."
Stockman, appearing on "This Week With David Brinkley" (ABC, WJLA), said the administration, whose primary objective was once listed as a balanced budget, had "a plan which will steadily whittle away" at the budget gap, which he said was larger than the administration had predicted because of favorable developments in the economy.
The administration is projecting persistent deficits for "1984 and the out years," he said, "due to the success of the program, not due to its failures." The decline in the rate of inflation, he said, has reduced anticipated federal tax revenues, resulting in projected deficits larger than originally expected.
He did not specify what in the budget message would aim at reducing government administrative costs. Last week a White House "fact sheet" projected "tens of billions" in savings over three years through "improved debt collection, surplus property sales, accelerated sales of offshore oil and gas leases, and strengthened fraud, waste and abuse prevention efforts."
Stockman and Treasury Secretary Donald T. Regan both insisted yesterday that the overall objectives of the administration's economic program remained unchanged, despite the persistence of the deficit and well-publicized differences in the White House on the need to raise some taxes.
Regan, on "Face the Nation" (CBS, WDVM), said the administration had been "very realistic in our economic forecasts for the 1983 fiscal year." The projections, he said, are "well below expectations of what the economy can do in a recovery period following a recession."
He said the spending and deficit projections assume that Congress will accept the administration's proposals, such as withholding of income tax from dividend and interest payments. Many financial experts regard this as highly unlikely in an election year.
Regan did not dispute an interviewer's prediction that even under the most favorable circumstances there still will be a budget deficit of $50 billion by 1987, but he said elimination of the deficit was now down to fourth among the administration's economic goals.
The most important, he said, was controlling inflation, followed by economic recovery and deregulation of business by government. Besides, he said, deficit projections are "literally meaningless" when carried out to future years.
Regan said the administration's recent criticisms of the Federal Reserve Board for the erratic growth in the money supply did not mean that the Fed was being made a "scapegoat" for economic problems.
Giving an endorsement that Reagan has withheld, Regan said Paul Volcker should be retained as Fed chairman because "he's trying, he's a good professional." But he said again that an "erratic" money supply program "confuses business leaders, it confuses people who work in the money markets."
He said the Fed was being asked only to "be as consistent as you can in the growth of money," within an overall tight-money policy that the administration favors.