Office of Management and Budget Director James C. Miller III suggested yesterday that Congress could avoid raising taxes or cutting defense spending if it "corrects" some of the spending and economic estimates in its budget assumptions for fiscal 1987.
Miller aired his ideas at a meeting with congressional reporters after getting an apparent cold-shoulder for them in meetings with Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) and other GOP budget strategists.
In the meeting with reporters, Miller denied he favored "cooking the books" by lowering estimates for spending and counting on improved economic conditions. "I'm correcting the books . . . I'm saying their [Congress'] books are wrong," he said.
Miller said "very, very preliminary" estimates of economic growth indicate the fiscal 1987 deficit could be $10 billion lower than current estimates of $183 billion. That, coupled with what he described as more realistic assumptions about defense and farm program costs, could bring spending within "striking range" of the figure required to avoid automatic spending cuts under the Gramm-Rudman-Hollings budget-control law, he said.
As a "contingency," he added, Congress could make additional domestic spending cuts in August if it appears that the target cannot be reached otherwise. The new budget law mandates across-the-board spending cuts if Congress cannot come within $10 billion of the $144 billion deficit target for next year.
Miller said he is sticking by the budget President Reagan sent to Congress earlier this year, but is offering the contingency plan to rebut "those who say it can't be done."
Congressional budget experts have said the president's budget fails to meet the Gramm-Rudman-Hollings target, largely because it underestimates military and some domestic spending. Miller characterized the congressional objections as "a bunch of malarkey."
Miller denied that he is urging Congress to defer spending-cut decisions until later in the year in hopes that economic growth and presidential veto pressure to cut appropriation levels will reduce deficits on their own. But, asked whether he would prefer no budget rather than one that departs significantly from Reagan's priorities, he said, "That's a hard choice."
Asked about Miller's suggestions, Domenici said, "I'm not willing to come down to the [Senate] floor and say we don't have a problem -- [that] everything's going to be rosy." Of Miller's deficit assumptions, he said, "If you want to cook-up new ones estimates , you should be worried they'd be $7 billion higher" rather than lower.
The Senate, meanwhile, continued desultory consideration of a bipartisan budget, opposed by the White House because it would raise taxes and cut Reagan's defense-spending request while shelving many of his proposed domestic-spending cutbacks. Consideration of the budget is expected to take a week or more.