The Congressional Budget Office is expected to release new federal budget estimates today showing that, after the latest round of tax increases and spending cuts, the 1983 deficit still will be about $155 billion, congressional sources said yesterday.
A set of "technical re-estimates," particularly for the cost of farm price-support programs, have raised the projected deficit by about $10 billion above the range of $141 billion to $151 billion mentioned by CBO Director Alice M. Rivlin late in July, the sources said.
The new CBO estimates indicate that the 1984 and 1985 deficits also will be in the $150 billion range unless there are additional spending cuts and tax increases.
Separately, Salomon Brothers, a major New York investment banking house, predicted yesterday that the deficit for the fiscal year beginning Oct. 1 will hit $163 billion. Counting deficits for so-called off-budget agencies, for which the government must also raise cash to cover, federal borrowing needs will reach $177 billion during the year, substantially more than 1982's record level, Salomon Brothers said.
The Reagan administration in its mid-session budget review in late July put the deficit at $115 billion for fiscal 1983, up slightly from its estimate of $109 billion for 1982.
Since then, however, several top administration officials have indicated that the mid-session review was based on an overly optimistic economic forecast in order not to differ too much from the assumptions in a budget resolution adopted earlier by Congress. That resolution calls for a deficit of $104 billion.
Although economic forecasters remain divided over how strong the recovery will be and how soon it will begin, the administration received some good news yesterday.
The Commerce Department reported that the index of leading indicators, which often foreshadows movements in economic activity, rose 1.3 percent in July. With upward revisions in the index also reported for May and June, the increase in July was the fourth monthly rise in a row. Details on Page D7.
Both the CBO and Salomon figures assume a less vigorous economic recovery than do those of the administration. A slower recovery would mean a considerably smaller increase in federal revenues, even with the recently passed tax increase, than that forecast by the administration, and a small increase in outlays above the administration figure as well.
Both organizations are skeptical about some of the "savings" projected by the administration. These include more than $13 billion of cuts expected to flow from "management initiatives" and another $14 billion or so from a combination of lower interest charges on federal debt and a reduction in borrowing from what it otherwise would have been had taxes not been raised and other spending reductions achieved.
Salomon Brothers said it expects about one-half of the $56 billion in spending cuts laid out by the congressional budget resolution to occur.
Raising that $177 billion during 1983, with $51 billion to be borrowed in the October-December quarter and $56 billion the following three months, will represent "an unprecedented challenge to Treasury debt managers," Salomon Brothers said.
Many analysts say such large borrowing may "crowd out" potential private borrowers by keeping interest rates higher than they otherwise would be if and when a recovery gets under way.
David A. Stockman, director of the Office of Management and Budget, has said that the deficit could exceed the $115 billion figure. But OMB officials have rejected the possibility that it could climb as high even as the range Rivlin gave in July.
The officials also point out that Congress already has passed most of the legislation necessary to achieve the projected deficit reduction in 1983, though they acknowledge that the savings from the management initiatives and lower interest charges still must occur.