The fiscal 1992 budget that President Bush sends to Congress next week is likely to seek only incremental increases in domestic programs and envisions saving more than $50 billion over five years by streamlining benefits such as Medicare, farm programs, student aid and child nutrition, according to congressional and administration officials.
As much as $20 billion of the saving is targeted to come from Medicare, about $3 billion of it in the year that begins Oct. 1.
The saving included in the budget proposal would be in addition to the $75 billion in benefit program reductions over five years enacted as part of the budget agreement last fall.
The saving in benefits programs included in Bush's proposal would come from making the programs more efficient, officials said. The saving would be used to reduce the deficit and to offset the cost of extending tax breaks that are scheduled to expire this year.
This budget is the first drafted under the restrictions of the new spending rules created by last fall's five-year budget agreement, which was designed to save $482 billion.
The new rules create hurdles to either expanding domestic programs or creating new ones. The accord holds increases in spending for discretionary programs -- those programs subject to annual congressional appropriations -- to a rate below that of inflation.
Separate spending limits are set for military, domestic and international aid spending programs. That means Congress cannot shift money from Pentagon accounts to such domestic programs as education or health care, as Democrats sought to do over the past decade. Instead, domestic programs must compete with one another for the limited resources.
As a result, the administration will seek to pursue in limited ways such lofty goals as improved health care and greater choice for parents in their children's education, officials said.
In his State of the Union address Tuesday night, for instance, Bush pledged "new prevention initiatives for infants, for children, for adults and for the elderly to promote a healthier America." While the budget is expected to contain a $171 million program aimed at combating infant mortality, only part of the money will be new spending. The rest will be diverted from other Public Health Service programs, according to congressional and administration officials.
The money will not go to expand health-care services or Medicaid benefits for pregnant women and babies, but to find ways of getting more of those people to existing services such as clinics where prenatal and infant care are available. The grants, which would be administered by the Department of Health and Human Services, would go to public agencies in 10 cities for special demonstration projects in neighborhoods with high rates of infant mortality, officials said.
Similarly, the president's preventive-health initiative for the elderly is expected to be some form of health education and coordination of services rather than an expansion of health care, officials said.
Bush will ask for $200 million in new spending to test a voucher system that would allow parents to choose between public and private schools. He is also expected to call for allowing school districts the option of using about $460 million from existing school improvement funds to support open enrollment in public schools to back up his State of the Union address call for "enabling parents to choose their children's schools," administration officials said.
The budget will also seek to make small down payments on long-range, big-ticket items, including as much as $200 million for the first year of a 20-year mission to Mars, administration officials said.
Yesterday, the Senate voted 97 to 2 to reject a measure that would have suspended the spending limits from now until Sept. 30, 1992. The legislation was automatically introduced in the Senate after both the Office of Management and Budget and the nonpartisan Congressional Budget Office predicted that the economy will contract for two consecutive quarters.
"Reversing our deficit-reduction policy merely three months into that policy will heighten the sense that the Congress cannot manage the nation's fiscal policy," Senate Budget Committee Chairman Jim Sasser (D-Tenn.) told his colleagues.
Only Democratic Sens. Tom Harkin (Iowa) and Paul Wellstone (Minn.) voted in favor of the measure. Sen. Alan Cranston (D-Calif.), who is undergoing cancer treatment in California, did not vote.
The administration's budget is also expected to propose testing a system of performance-based reviews of government spending on about a dozen federal programs, officials said. The idea is similar to a proposal offered last year by Sen. William V. Roth Jr. (Del.), the Senate Governmental Affairs Committee's ranking GOP member.
Staff writers Kenneth J. Cooper and Spencer Rich contributed to this report.