Executives of the nation's leading corporations yesterday expressed to President Reagan their fear that federal budget deficits would cause interest rates to remain high, delaying economic recovery, but they were unable to persuade him to revise his economic program.
Members of the delegation from the Business Roundtable, big business' premier research organization, told Reagan they believe deficits may be even larger than the administration has forecast.
Reagan projects a deficit of $91.5 billion next year, but the Congressional Budget Office calculates the deficit at $121 billion under Reagan's plan, which also envisions $56 billion in spending cuts and revenue increases. The business leaders suggested yesterday that "as a last resort" Reagan consider raising excise taxes and delaying the 1983 tax cut in order to bring the deficit down.
Concerned about the budget logjam between the White House and Congress, Exxon Chairman Clifton Garvin, who heads the Business Roundtable, urged Reagan to work "collectively" with Capitol Hill on "getting the size of the deficit down by cutting government spending."
"What we are interested in is trying to get the rate of recovery to move faster than some of us perceive it," Garvin told reporters after he and other Roundtable representatives met with Reagan and several top aides. Reagan made no commitments, Garvin said.
However, administration aides were quick to reiterate the president's belief that his program will bring about economic recovery. Deputy White House press secretary Larry Speakes blamed Capitol Hill for failing to come up with a "comprehensive" alternate budget.
"The gentlemen this morning indcated there is a perception we are not going to do anything about it. When I say 'we,' I think the emphasis should be on the Congress," Speakes said.
"There's a public perception that there is no willingness on the part of the Congress to bear down and reduce federal spending, and thereby the federal debt, and that's what keeps the interest rates up."
Meanwhile yesterday, the chief economist for another major business group, Jerry Jasinowski of the National Association of Manufacturers, expressed concern over the deficit and urged cuts in defense spending and Social Security and other retiree programs to reduce federal spending and bring down interest rates.
Jasinowski said he would favor an oil import fee or an increase in excise taxes but he warned that any attempt to reduce deficits by raising business taxes would deepen the recession.
He said the tax stimulus and other features of the Reagan program could bring about an upturn in the economy but the "crucial danger" is that large budget deficits will drive up federal borrowing and "raise interest rates to levels that will push the economy back into recession in 1983."
The Business Roundtable's members are the chief executives of 196 major corporations. The group has strongly backed Reagan's economic program in the past; following his State of the Union message in January, Roundtable leaders urged that the president's program be given a chance. But last week, concerned that future deficits in the president's budget were understated and would keep interest rates too high to bring about recovery soon, they broke with Reagan.
Accompanying Garvin to the White House yesterday were Ruben Mettler of TRW, Robert Baldwin of Morgan Stanley, Robert Kilpatrick of Connecticut General Life Insurance and Ted Brophy of GTE.