Belt on '87 budget tightens around nondefense programs

President Reagan's 1987 budget is a sure cure for sleeplessness that was served up with a smile. Reporters were waiting outside the Government Printing Office early Wednesday morning to pick up copies of the budget when suddenly an ambulance roared up to the building with siren blaring and lights flashing.

Paramedics rolled a stretcher into the building carrying a perfectly healthy Office of Management and Budget staff member. He was wearing a blue T-shirt reading ``The 1987 Budget Lives'' and was clutching a copy of the President's blue-bound budget.

The prank was a tongue-in-cheek rebuke to critics in Congress and the press who said the budget would be ``dead on arrival'' at Congress.

Here, in abbreviated form, is the heart of the proposed budget for fiscal 1987, which starts Oct. 1, 1986.

Proposed spending: Just a whisker under $1 trillion. The planned spending of $994 billion is up 1.4 percent from estimated 1986 spending of $979.9 billion.

Estimated tax and other receipts: Well short of spending, at $850.4 billion. Still, this represents a 9.4 percent increase over estimated 1986 receipts of $777.1 billion.

Estimated deficit: $143.6 billion, just shy of the $144 billion deficit target set by the Gramm-Rudman balanced-budget law. The projected 1987 deficit is 29.2 percent smaller than the $202.8 billion deficit projected for fiscal 1986.

Method of reaching deficit: If current budget and tax policies were left unchanged, the 1987 deficit would have been $181.8 billion or $37.8 billion above the allowable deficit under Gramm-Rudman. The President proposes to cut spending by $31.9 billion. The bulk of the cuts ($24.9 bilion) would come from domestic programs. He also projects a $6.3 billion jump in receipts due to the extension of the 16-cent excise tax on cigarettes and a boost in employee contributions to civil service retirement, among other things.

In a further bid to raise revenue and shrink the deficit, Mr. Reagan proposes to sell certain federal assets. For example, the sale of the Bonneville and Southwestern Power Admininstrations is projected to produce $162 million in revenue in 1987. The sale of two naval petroleum reserves is expected to add $1 billion to federal coffers that year.

Adding the spending cuts, asset sales, and revenue hikes would produce $38.2 billion in budget savings over current policies, the OMB estimates, leading to the $143.6 billion deficit the President projects.

Assumptions behind the budget: Government spending and income are influenced in a major way by the state of the economy. The administration predicts the economy will grow 4 percent from the final quarter of 1985 to the last quarter of 1986, vs. 2.5 percent in the same period last year. The forecast was aided by falling oil prices and rapid money-supply growth.

The budget assumes that consumer prices will rise a bit faster this year than last. On a fourth-quarter to fourth-quarter basis, inflation is projected at 3.7 percent in 1986, vs. 3.3 percent in 1985. Interest rates are projected to drop. The interest rate on 91-day Treasury bills is expected to average 7.3 percent in 1986, vs. 7.5 percent in 1985.

Winners: Programs slated to get more money in 1987 include the Defense Department, where spending authority would rise to $311.6 billion. The National Aeronautics and Space Administration is penciled in for a 2.7 percent increase. Beefing up security for US diplomats would help boost State Department spending 24.1 percent.

Losers: A slew of programs, including the Interstate Commerce Commission and Small Business Administration credit prorgams, would be eliminated under the President's budget. Many other domestic programs, including farm commodity price and income supports, the Job Corps, and student loans, would face cutbacks.

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