President Reagan sent Congress his $848.5 billion budget yesterday together with documents showing that the domestic spending "freeze" he is proposing for fiscal 1984 actually works out to an average 4 percent cut before inflation for much of the government.
Programs for the poor would be cut more than 14 percent before inflation under the president's spending plan, according to an analysis by an outside anti-poverty study group here.
Democrats seized on these and similar figures yesterday, saying the third Reagan budget was little different from the first two he sent to Capitol Hill, and far more selective in its proposed spending cuts than the phrase freeze implies.
"This is the same stay-the-course budget we have seen for the past two years," said Rep. James R. Jones (D-Okla.), chairman of the House Budget Committee, of Reagan's spending plan.
"With all due respect, the administration's concept of a freeze on spending is more a 'phrase' than a 'freeze.' The use of the phrase is new, the policy is old," an analysis prepared for the Democrats on Jones' Budget Committee added.
But Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) said that "for those who think it's unfair, I think the test is what kind of budget they will produce."
The Reagan budget provides for an overall spending increase of $43.3 billion or about 5 percent--the same as the expected rate of inflation--over the current year. But that overall figure is a net of large pluses and minuses. Defense spending would go up $30.5 billion, Social Security $9.9 billion, Medicare $6.8 billion and interest on the debt $14.3 billion.
Unemployment compensation would come down $8.1 billion as the economy starts to recover.
All other programs in the government--from farm price supports to sewage treatment grants and aid to education--would then come down $10.2 billion, or about 4 percent.
In a similar analysis, the Center on Budget and Policy Priorities added up the budget authority requested by Reagan last year and this for all programs for the poor, from Medicaid, food stamps and subsidized housing through Legal Services.
Last year's total was $83.95 billion, this year's $71.05 billion, down 14 percent, the center said. After inflation this would come to 19 percent, the center said.
There are increases in the budget for other than defense, Social Security, Medicare and interest. The president would lift the lending authority of the Export-Import Bank, and asked Congress to increase appropriations for science and other reseach, foreign military aid and for federal highway and bridge reconstruction, for example.
On the other hand, Reagan would make new cuts in college student aid and again seeks to eliminate the Legal Services Corp., which provides free lawyers for the poor. He is also trying again to eliminate the Appalachian Regional Commission and would make deep cuts in farm price supports.
These are in addition to the more basic cuts he proposed, including a six-month delay in cost-of-living adjustments in most federal benefits tied to inflation, including in Social Security. Reagan also seeks to freeze federal pay and retirement benefits for a year.
All these proposals are likely to be controversial in Congress, as is the question of what kind of jobs program to pass. At the White House yesterday, Reagan was urged by House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) to yield in his opposition to public works jobs proposals.
O'Neill has said House Democrats will push for a $5 billion to $7 billion jobs bill. "I think we are wide apart" on the jobs issue, O'Neill told reporters after the meeting with the president. House Majority Leader James C. Wright Jr. (D-Tex.) said O'Neill and Reagan had a "vigorous exchange" over the issue.
The president's midterm budget is presented in defensive language that attempts to explain why the administration's promises of two years ago, and those Reagan made in the 1980 campaign, have faltered. But the president concedes only a limited responsibility for what he describes as "the most serious challenge to fiscal policy in recent times."
While Reagan once promised to balance the budget by fiscal 1984, the document he sent to Congress yesterday talks instead about a "longstanding structural imbalance in the budget"--a yawning deficit gap that Reagan never acknowledged would result when he ran for president.
The president also emphasizes that his problems--such as a "structural deficit"--are rooted in the "misdirected trend" of fiscal policy before he took office. He repeatedly blames the budget he "inherited" from the Carter administration in 1981 rather than his own defense buildup and tax cutting of the last two years.
Reagan does not acknowledge directly that his Pentagon expansion has contributed to the deficit; rather he faults Carter for allowing the national defense to fall to an "intolerable state," the repair of which resulted in an "excruciating bind" for the budget.
Gone from the budget document entirely are the president's promises that he could slow down inflation without any major dislocation or pain in the economy. "The process of economic adjustment to non-inflationary growth has been far more prolonged, costly and disruptive to financial markets and business activity than originally projected," he acknowledges.
"During the past two years, our nation has labored to purge itself of the inflationary disease . . . , " reports the president, who also describes the "dislocation and hardship" of the last two years as a "corrective interlude on the path of sustained recovery."
In terms of specific line items, one winner in the budget is the White House. Outlays for the White House and related activities would rise to $112 million, an increase of $8 million over current spending.
If defense does the best in the budget, farmers may do the worst. There is a proposed freeze on target price supports for wheat, other grains, cotton and rice.
For welfare, the administration proposes that recipients of food stamps and Aid to Families with Dependent Children (AFDC) be required to take jobs in order to continue receiving benefits, and criteria for establishing benefit levels would be tightened. For food stamps, benefits would be reduced to reflect earned income and shelter costs.
Child nutrition programs, including school breakfast, child care and summer feeding efforts, would be folded into a block grant to the states, at 85 percent of current funding levels, with a six-month delay on cost-of-living increases for the food.
Low-income energy assistance, which Congress has resisted cutting in the past, would be slashed by about one-third, from $2 billion to $1.4 billion.
The two big health programs, Medicare for the elderly and Medicaid for the poor, would be squeezed for a third year, resulting in bigger charges for patients as well as curbs on physicians' fees and hospital reimbursements.
Education spending would be reduced from $14.4 billion to $13.5 billion, although some of the biggest programs like aid to disadvantaged elementary and secondary school children and education for the handicapped would be frozen or subjected to relatively minor cuts. The administration is proposing a reduction in the $3 billion aid-to-the-disadvantaged program for the remainder of the current fiscal year, however, meaning a likely cut there too.
Grants and loans for college students would be revamped in a major way. A means test has been proposed again for all recipients of guaranteed student loans regardless of family income, supplemental education opportunity grants would be phased out, and basic college-aid (Pell) grants would be supplanted by a "self-help" program in which students would have to pay more of their own educational costs.
The administration's proposal for tuition tax credits for private education, which died in the last Congress, was renewed in the budget, and a new program of tax-exempt educational savings accounts for college education was also proposed for low-to-moderate-income families.
While spending on subsidized housing would remain roughly the same as it is this year, the administration would rescind more funding for new units than it would authorize anew and continue pressure for a "voucher" system under which the poor would get subsidies to rent housing in the private market.
Under pressure from mayors and governors, the administration has backed off from cuts in grants to financially hard-pressed state and local governments but wants to combine the $4.6 billion general revenue-sharing program with the smaller but similarly popular program of community development block grants.
The president's big New Federalism proposal of last year has been scaled down, for the time being at least, to a more modest expansion of block grants to the states.
Despite the recession, overall spending for employment and training would decline from $5.7 billion to $5.3 billion, although the administration contends that more people would be helped because more of the money would go to actual training efforts. With Republicans as well as Democrats calling for more spending on jobs creation, Congress is expected to propose a more ambitious jobs program, along with some immediate relief from suffering by the jobless.
Among the president's jobs proposals was a vastly expanded program of assistance for "dislocated" workers, whose jobs are permanently lost because of economic strains. The expansion would provide $240 million to help 96,000 workers.
The current program of supplementary unemployment benefits, providing 16 weeks of extra benefits after workers have gone through their regular assistance, would be continued for six more months after its current expiration date of March 31. As an alternative, workers could give prospective employers a voucher equivalent to half the benefits to subsidize the worker's employment for up to 32 weeks.
Also, a sub-minimum wage of 75 percent of the current $3.35-an-hour wage floor would be allowed in the summer months for workers under age 22, a proposal strongly opposed by organized labor but defended by the administration as a way of providing more jobs for unskilled young people.
Various federal job training programs would be combined into block grants to the states, and states would be permitted to use up to 2 percent of their unemployment insurance trust funds, or $450 million, for training.
The administration also said in the budget it will ask for a $2.7 billion increase in lending authority for the Export-Import Bank "if necessary to meet subsidized foreign officially supported competition" against goods made in this country.
While water projects would continue to be funded at current levels, spending for parkland acquisition, soil conservation, recreation grants to states and management of offshore oil and gas leasing would be reduced. Park fees would be increased to help improve existing parks.
Spending by the Environmental Protection Agency would be cut, with the biggest reduction coming in water pollution control grants to the states, which would be cut by more than one-half. Officials acknowledge that the cut will make it difficult to enforce existing laws. Funding for hazardous waste cleanup would be increased, however.
The administration is again seeking an increase in funding for nuclear energy research, while cutting back spending for more conventional energy research, including solar and fossil fuel alternatives.
In what will surely be a controversial proposal, it would also cut back on the fill rate in the Strategic Petroleum Reserve.
As in the case of the Department of Education, the administration still wants to get rid of the Department of Energy, although Congress was cool to both departmental dismantling proposals last year.
Highway spending would increase by more than one-third under the nickel-a-gallon gasoline tax that Congress approved late last year, to take effect April 1. Spending on airports and air traffic control would also increase.
But mass transit would not fare anywhere near as well, with spending reduced to slightly below current levels, even though 20 percent of the new gasoline tax revenue was supposed to go for transit. Amtrak funding would also be reduced slightly, pushing costs off on passengers or states through which the trains run.
The Volunteers in Service to America (VISTA) program would be ended because the administration contends that it is more expensive and less effective than other volunteer efforts. So would subsidized direct small business loans, with some exceptions, including loans to minority businesses.
Reduced subsidies for the Postal Service were recommended, which could result in higher costs to preferred-rate mailers, except for the blind and handicapped.