House Budget Committee Chairman James R. Jones (D-Okla.) charged yesterday that President Reagan has underestimated next year's deficit and predicted Republicans will join Democrats in working to reduce deficits and redistribute spending cuts over the next few years.
Declaring the budget is partly based on some "Alice in Wonderland" assumptions, he said a more accurate estimate of the deficit it entails is "at least $100 billion," rather than the $91.5 billion that Reagan projected Saturday in his budget message to Congress. Jones said that Congress' initial reaction to the budget was one of "disappointment and hostility."
While Jones does not speak for all House Democrats, his position as head of the Budget Committee gives him a lead role in developing his party's strategy, which he said probably hinges on the support of at least some Republicans, including GOP "traditionalists" who oppose high deficits.
The problem is that without deficit reductions and a lessening of pressure on interest rates, "the economic recovery will be thwarted," Jones said.
Asserting that both parties in Congress are in a "state of paralysis," Jones said that nothing approaching a consensus exists at the present time. But he added that a coalition will become more likely as the year progresses.
"There is a possibility later this spring that leaders of both parties can get together to rewrite this budget in such a way that it meets the economic problems head-on . . . . That's probably what it's going to take . . . It's going to take bipartisan consensus," said Jones.
Jones later told reporters he wants to start consulting with Republicans soon, although he doesn't anticipate any swift consensus. Last month, Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) said such a coalition was possible if Reagan's budget was unacceptable to Congress.
As for what might be contained in an alternative budget, Jones said, "I'm not putting anything off limits," including tax increases.
He said his own goals would include a reduced deficit, adequate funding for what he called "human capital needs" such as education and job training, and "more fairly distributed" budget reductions, including slowing down the huge defense buildup.
A "key question," he said, is whether Congress will favor a deferral of tax cuts planned for 1983 and beyond, including reversal of its decision last year to reduce income taxes to take account of inflation. He said he is also willing to consider acceleration of the tax cut planned for this July to spur recovery from the recession.
Jones characterized Reagan's proposed fiscal 1983 budget as "more realistic" than the one he submitted to Congress last year but said it contained some "softness" and "Alice in Wonderland views."
Its assumption that interest rates will fall more sharply than is expected by the Congressional Budget Office is enough, in itself, to account for a $10 billion to $15 billion difference in the anticipated deficit, Jones said. In addition, he said, there is "skepticism" about claimed savings from some of the so-called "management initiatives" that the administration is proposing, as well as doubt about whether all the proposed spending cuts will be approved.
Jones also attacked the budget on "fairness" grounds, charging that the burden of spending cuts would be borne disproportionately by lower-income people. About 60 percent of cuts proposed for benefit entitlement programs come from those for which needs tests are applied, with proportionately smaller cuts for programs like veterans' benefits that go to rich and poor alike, he said.
Jones expressed doubt that Congress would go along with one big "reconciliation" package of spending cuts as it did last year in granting Reagan virtually all the budget savings that he wanted. There is a feeling that the "reconciliation" process, under which authorizing committees are ordered to make actual spending cuts under targets proposed by the Budget committees, was abused last year and it will take time to regain confidence in it, Jones said.
Moreover, Jones asserted that the congressional budget control process itself is in "its greatest danger" since the budget act was passed eight years ago, largely because Congress fears approving a resolution embodying the kind of deficits that Reagan is projecting for the next few years. CAPTION: Picture, REP. JAMES R. JONES . . . foresees deficit of "at least $100 billion."