The Reagan administration is predicting that the federal budget deficit for fiscal 1983 will reach or exceed a record $110 billion, Treasury Secretary Donald T. Regan said yesterday.
Interviewed on "Face the Nation" (CBS, WDVM), Regan disclosed that a revised midyear economic forecast due this week will estimate that the budget deficit for fiscal 1983, beginning Oct. 1, will be "somewhere in the neighborhood of about $110 billion to $114 billion."
The review assumes that Congress follows through on the budget reconciliation process--of cutting spending and raising revenue--already in motion, he said.
Regan said the updated review will forecast that the deficit "starts coming down" in later years, to over $90 billion in fiscal 1984, and around $70 billion in 1985.
Last February, the administration projected a fiscal 1983 budget deficit of $98.6 billion, at least $11.4 billion below the estimate that Regan said will be produced this week.
Although the administration is revising upward its estimate of the 1983 deficit, some in and many outside the administration view the official outlook as too optimistic.
There have been reports that the Congressional Budget Office, using other economic assumptions, now expects a deficit of $140 billion in fiscal 1983. Earlier this year, CBO projected a 1983 shortfall of $104 billion.
Regan denied that the new administration forecast understates the true size of the budget deficit. "The administration honestly believes that this is the type of recovery it will have," he said. He also noted that the forecast is a "consensus view" with some in the administration more optimistic and some more pessimistic.
There won't be need for another tax increase bill next year on top of the $98.5 billion in tax increases over three years passed by the Senate last week, Regan said. "I think that next year with the economy recovering, our revenues will be running along reasonably well," he said.
Although Regan then said that the administration expects the budget deficit to be "lower next year than it will be this year," a Treasury spokesman said Regan didn't mean to suggest that the fiscal 1982 budget deficit would be revised upward. The administration is sticking with its latest estimate that this fiscal year's deficit will be $106 billion, the spokesman said.
Although President Reagan came into office promising to balance the budget by 1984, the administration's current target date for that is "in the 1986-1987 area," Regan said.
Asked about the Senate halving of the corporate tax deduction on expense-account "three-martini lunches," Regan said he thinks the administration "will go along with it" but wants to see what the House is going to do.
The administration really wants to "get at the question of cash tips that are not being reported by those who work in restaurants and bars," he said. He suggested that "some type of reconciliation could be made between these two ideas" in a Senate-House conference on the tax bill.