Recipe for budget deficit reduction
The recipe for the federal government, fiscal 1988, comes in two parts, both of which were sent early yesterday morning to President Reagan for his signature. One section consists of a 2,000-page ``continuing resolution'' containing the 13 regular appropriations bills that fund all discretionary federal programs. It is the most costly piece of legislation in the history of the United States. It commits some $600 billion in public funds to the thousands of federal activities - from support for the Nicaraguan contra rebels, to highway maintenance, to scientific research - that must be funded anew each year.Skip to next paragraph
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Under the terms of last month's budget agreement, this continuing resolution also imposes a $5 billion cut from last year's levels in defense spending, bringing the Pentagon's budget to $291.5 billion, and a $2.6 billion reduction in discretionary domestic spending, holding that share of the budget to $162.9 billion. The measure also sanctions some of the sales of federal assets called for in last month's budget agreement.
Its other section includes $9 billion in tax hikes as well as $8.6 billion from savings in entitlement programs like medicare that confer automatic benefits on recipients, from user fees for some government services, and from additional asset sales - all spelled out in last month's accord.
The budget agreement stipulated a $30 billion deficit reduction in fiscal 1988, which began Oct. 1, and $46 billion for fiscal 1989. Preliminary estimates indicate that the spending reductions totaled in the two bills add up to about $33.4 billion for the current fiscal year, $3.4 billion more than anticipated by the agreement.
The legislation repeals the $23 billion of automatic spending cuts, half of which fell on the defense budget, that went into effect Nov. 20 under the terms of the Gramm-Rudman-Hollings deficit reduction act.