The Congressional Black Caucus yesterday proposed a fiscal 1983 federal budget that would cut defense, shift tax breaks from business and the wealthy to the poor and middle class and significantly expand spending for jobs, education and other social programs.
In effect turning the policies of the Reagan administration upside down, the caucus proposal would keep total federal spending at the level the Congressional Budget Office has said is necessary to maintain current services, but would vary the mix and at the same time significantly reduce the deficit to $91 billion largely by raising taxes.
Del. Walter E. Fauntroy (D-D.C.) contended that President Reagan set "four records" in 1981: "record cuts in so-called 'safety net' programs; record give-aways of tax resources; record increases in defense spending, and a projected record deficit."
The most innovative element of the caucus budget is a significant alteration of the tax system. Major elements include:
* In an effort to raise revenues, the caucus would eliminate special tax breaks going to multinational companies using domestic international sales corporations and special provisions of the tax code applicable to U.S. possessions; step up taxes on oil companies; eliminate corporate tax sales through the so-called leasing provisions in the law; eliminate new depreciation benefits to go into effect in 1985 and 1986, and revise the investment tax credit to eliminate what the caucus said are some investment distortions.
* On the other side of the coin, the caucus would effectively keep all the individual tax cuts scheduled to go to persons making $50,000 or less, and would target the benefits more to the poor and lower middle class by increasing the zero bracket amount from $2,300 to $2,700, and boosting the earned income tax credit.
Altogether, the changes would produce $66 billion in additional revenues in 1983, and $105 billion by 1985, the caucus said.
On the spending side, the caucus proposal would cut defense, veterans benefits, and certain natural resource programs by nearly the same amount the group would increase spending for education, student loans, housing, jobs, welfare and health.