Democrats to Reagan: 'Your plans could risk even higher budget deficits'
Democrats in Congress are throwing some hardball economic questions down from Capitol Hill to the White House, but they sat that if President Reagan's economic team is swinging it hasn't made contact -- that is, provided any answers.Skip to next paragraph
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Some powerful Democrats in the House of Representatives are demanding more specifics from the White House before they commit themselves and the nation to the revolutionary tax and budget policies espoused by Mr. Reagan.
"The administration," says Rep. James R. Jones (D) of Oklahoma, chairman of the House Budget Committee, "has not justified its assessment" that interest rates, inflation and unemployment all will fall if the Reagan program is put into place.
"I happen to believe [with the Reagan administration] that a dramatic change in fiscal policy is long overdue," says Mr. Jones. "And I share their goals."
In other words, the Oklahoman, along with many of his Democratic colleagues, favors cutting both taxes and the growth rate of government spending.
"We [Congress] have an opportunity to improve the President's budget and hopefully to make it bipartisan," Jones declares.
He says he believes that Regan may get 75 percent of the budget cuts he seeks , "and it could be higher," though somewhat changed in detail.
First, however, House Budget Committee Democrats want to know more about how the Reagan economic team "got from point A to point B" in making its economic assumptions.
Lacking that information, says Jones, Democratic experts find apparent gaps in the Reagan program's logic.
For example, he says, the Reagan blueprint calls for interest rates to fall to 8.9 percent in calendar 1982, compared with 11 percent in Jimmy Carter's 1982 budget forecast -- which some economists pegged slightly above 11 percent.
Says Jones: "If interest rates [in 1982] turn out to average 11.1 percent instead of 8.9 percent, we will have an uncontrollable increase of $12 billion to finance the national debt."
"So, the projected Reagan deficit would go from $45 billion to $57 billion," adds Jones, even if everything else worked out according to White House expectations.
Staff economists of the House Budget Committee raise other questions about budget policies hammered out by David A. Stockman, director of the Office of Management and Budget.
The Reagan-Stockman budget calls for cuts in medicaid, the program which pays medical costs for poor Americans, but it leaves medicare intact.
"Evidence is developing." said congressional expert, "that a substantial part of the medicaid cuts would end up being borne by medicare, putting further pressure on social security trust funds and forcing the adoption of a higher payroll tax."
Medicare, designed to help all elderly Americans, regardless of means, defray their hospital and medical bills, is funded through the social security system.
Touching on another issue, Jones asks, "Would the Reagan budget cut too deeply into research and development, which directly boosts productivity?"
These and many other questions are directed at the White House by legislators who, as Jones put it, bear the responsibility of making statutory changes in law.
Democratic leaders, meanwhile, concede that they appear to be flailing about to find alternative programs to offer, particularly in the tax-cutting field.
Republicans, Jones believes, are committed to the so-called Kemp-Roth tax-cutting formula -- exposed by President Reagan -- which calls for a 30 percent across-the-board personal income tax cut over three years.
Many cogressional Democrats oppose automatic tax cuts extending beyond one year, but are expected to approve Reagan's plan to give faster rax write-offs to business for investment in new plants and equipment.