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Revving up defense industry won't be easy; '82 deficit: $100 billion . . . and counting

By Julia MaloneStaff correspondent of The Christian Science Monitor / March 1, 1982



Washington

First congressional Democrats, then Republicans, and now perhaps even David A. Stockman, director of the Office of Management and Budget (OMB), are predicting that the federal budget deficit will break the $100 billion mark this year.

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Budget Director Stockman has reportedly said in private that the 1982 deficit will run $110 billion. Only three weeks ago his office released a forecast that the current year's deficit would reach $98.6 billion.

House Republican leader Robert H. Michel of Illinois gave the $110 billion figure while talking last week with reporters. He said Mr. Stockman had made the prediction. Stockman's office did not deny the report.

Meanwhile, a Senate Republican leadership aide cast doubts on the estimates for 1983, when the deficit is forecast by the White House to drop to $91.5 billion. The aide attempted to launch an ill-fated trial balloon for an income surcharge to bring in $37 billion more in taxes. When a reporter noted that the new tax would cut the expected deficit by one-third, the aide replied, ''more like one-fourth.''

Democrats have long accused the White House of using ''phony'' figures that underestimate budget deficits.

Edwin L. Dale Jr., a spokesman for the OMB, conceded last week that if the economic upturn is later or weaker than expected, the deficit for 1982 could reach $110 billion. He said that so far, however, spending levels are running lower than predicted.

The OMB is also having to defend its figures in the face of a Congressional Budget Office (CBO) study released Feb. 25 that says the Reagan proposal will create a $121 billion budget deficit in 1983, growing to $140 billion in 1985.

Responding to the congressional study, Mr. Dale pointed to four major areas:

* Farm price supports. ''We acknowledge that our estimate was too low for '82 and '83,'' the OMB spokesman said. ''Farm prices dipped further than expected.''

* Defense. Congressional budget estimates are higher than OMB figures. ''We do not think they're right,'' the OMB's Dale held. ''The last two years we've been more right than they on defense.''

* Offshore oil leasing bonuses. The administration expects a bonanza from auctioning off new sites for underwater drilling in 1983 as well as from resolving a major lawsuit, bringing income for offshore operations to $18 billion. The congressional budget staff puts the figure at $12.8 billion.

* Interest payment on the federal debt. The administration is more optimistic about falling interest rates, so it sees debt repayment bills for the government lower than does the congressional budget staff.

Congressional budget staff members also see much lower tax receipts. ''We can't account for their technical difference on the receipt side,'' said OMB's Dale. ''It's a mystery.''

Treasury Secretary Donald T. Regan says he stands by the administration's numbers. A Treasury Department spokesman says the Reagan budget projections are based on growth similar to that which occurred after other recent recessions.

One year ago both the White House and the CBO were making deficit predictions for 1982 that have proved to be far from accurate. But the congressional office was slightly more on target. The White House said the deficit would be $45 billion, the CBO said $67 billion. Both have blamed the economic downturn for the higher deficit.

''We weren't looking for a recession, either,'' said a congressional budget analyst.

The Monitor's Washington bureau chief, Godfrey Sperling Jr., adds:

The Republican leader of the House, Robert H. Michel, says he is convinced that the President, in time, will compromise on his budget proposal despite Mr. Reagan's stated reluctance to do so.

''The President can't be in a compromising position at this time,'' Mr. Michel said at a recent breakfast with reporters. ''Too many things need to be talked out. Any move on his part now would only muddy things.''

But Michel thinks Reagan will at some point move toward accommodation, probably accepting cuts in his defense budget and modifying his position against changing the tax cuts he has been able to put into place.

Michel also thinks the President might be persuaded to advance the 10 percent income-tax reduction increment from July 1, perhaps to April 1. He said the Reagan-initiated tax reduction now in place hasn't yet brought about the expected reaction within the business community - and that advancing the next tax cut ''might do it.''