Carter's 'budget book' due for quick Reagan revision

Jimmy Carter's fiscal 1982 budget proposal isn't likely to be a best seller anywhere but in the environs of Capitol Hill. Reading the mega-buck details of the weighty document is an eye-glazing experience, even for those whose business it is to find out how the budgetmakers arrived at the unwelcome deficit on the bottom line.

Besides, a revised and Reaganized edition will be off the presses before the new First Lady finishes changing the White House wallpaper.

The outline of that rewrite should be clear shortly after Ronald Reagan is sworn into office next Tuesday, promises Edwin Meese III, the new administration's top policy aide. Mr. Reagan will soon deliver an economic message to Congress laying out his budget-cut, tax-cut, and regulatory-reform package. Details will be spelled out in several later messages.

Actually, two budgets are in question -- the remaining months in the 1981 fiscal budget, and the new 1982 budget that starts in October. Reagan may even submit a whole new '82 budget, Mr. Meese says.

What is unfolding in the battle of the budget is the fundamental warfare of Washington politics, experts here point out.

As a political document, the Carter budget maps the battlefield for the coming months in a way that would minimize Democratic and liberal losses -- yielding ground sure to be lost anyway.

Within weeks, as details of specific budget cuts are made known, the battle will be joined.

"People are throwing aggregates around," says Brookings Institution budget expert Henry Aaron. "These won't mean much. But when they get down to identifying real programs, there will be a firestorm."

The Democratic and liberal response -- as indicated by the Carter budget itself -- will be also try to dramatize the impact in human terms of the proposed budget trims.

The Reaganites would like their new budget and economic package in Congress's hands by mid-February and acted on by summer. In that time frame and context, not only will the next budget be forged, but the shape and thrust of the Reagan-era domestic program will emerge as well.

The Carter budget concedes at least two major points to the Reaganites: that the federal budget's share of the gross national product should decline and that the proposition of the federal budget spent on defense should rise at the expense of human support programs.

In overall numbers, the Carter budget predicts a rise of $76.6 billion in next year's spending, to $739.3 billion. This compares with federal spending of

In 1972 the US set out 33 percent of the budget for defense. For 1982, the Carter budget pegs defense spending at 25 percent of the budget, rising to 26.7 percent in 1984 -- in line with Republican defense-share desires.

A decade ago, human service-related categories like education, health, and income security combined to make up 40 percent of the federal budget. The Carter Democrats peg such support outlays for fiscal '82 to 49.8 percent and barely 50 percent for fiscal '84, when the first Reagan term ends. Projected spending for the human service categories is thus flat, reflecting mostly medical cost rises.

"What happened between 1972 and 1982 has been a very small increase -- 2 or 3 percent -- in the gross national product captured by the federal budget," Mr. Aaron says. "Within that pie, the piece going to defense shrank, the piece going to human-related services increased."

Part of the growth the human-service slice of the budget pie was due to the shrinkage of defense spending itself. But medicare outlays also rose dramatically with the aging of the population and extension of benefits. There was a 20 percent boost in social security benefits in 1972, and a rise in disability claims in the mid-'70s. And medical costs raced ahead of the inflation index.

Carter's budget proposes modest shifts in human-services spending, trimming $ 683 million between this fiscal year and next in medicare and medicaid outlays, then holding health spending flat for the next three years.

Reagan conservatives, including top budget officer David Stockman, want much more ambitious cuts. They have detailed a 43-page catalog of potential cuts in almost all federal spending categories, totaling $50 billion. They might be content to compromise this at $35 billion in cuts, and may have to settle for far less when Congress gets down to the fine print.

Congressional leaders also will have a role in deciding how to link Reagan budget initiatives with the rest of its economic package, including tax cuts and regulatory reforms.Republican leaders want a package of multi- year spending cuts approved, starting with fiscal '81 outlays, while Democrats favor one- year trims or spending ceilings, delaying any long-term trimming to fiscal '83.

Many in Congress worry that the Reagan 10 percent-a-year tax cut plan would itself be inflationary, and might insist that any tax cuts be smalle r if spending cuts are frustrated.

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