President's cost-cutting panel lists 2,478 ways to help balance the federal budget

The President's Private Sector Survey on Cost Control this week ended its mission in the same way it began - causing controversy and talking about big numbers.

The PPSSCC, a panel of executives appointed by President Reagan to ferret out cost-savings in the United States budget, on Jan. 12 made public its absolutely final report - a list of 2,478 proposals it estimates could reduce the federal deficit by $424 billion over the next three years.

At the same time, the panel put out a side report detailing the cost of congressional pork-barreling. The names of specific projects and members of Congress, however, were deleted from the report's final draft and replaced by blanks. It thus contains such tantalizing sentences as, ''No better demonstration of why costly and unneeded military bases remain open has recently emerged than that provided by Senator m m.''

''This (pork-barreling) has been going on for years,'' says Peter Grace, head of Grace & Co. and chairman of the survey. ''This is really the result of a failed culture. I don't think the names are that important.''

Of the panel's projected $424 billion savings, about $151 billion would come from cutting government waste, Mr. Grace says. Some $91 billion would be saved by eliminating ''personnel mismanagement'' - tightening up, for example, on sick-leave policy for federal employees. Another $161 billion in savings would come from preventing ''system failures'' such as glitches in Defense Department inventory management.

Among the more interesting of the PPSSCC's findings is the fact that the Justice Department just sits on cash seized from criminals, without even depositing it in the bank. This costs Uncle Sam $50 million over three years, Grace charges.

One-third of all US post offices serve 100 or fewer people, says the panel. And it complains that the Veterans Administration spends $61,250 per bed to build a nursing home - four times what it costs a private-sector nursing home operator.

But a number of the PPSSCC's ideas for big-dollar cost savings would be controversial. In fact, the very thought of some of them undoubtedly sends a shiver through Congress.

The two biggest changes the panel proposes, for instance, are cutting the civil service and military retirement programs. Taken together, these moves would save the US government $58 billion over three years, PPSSCC documents estimate.

Federal employees and the military are powerful lobbying forces on Capitol Hill, to say the least. Peter Grace has even been personally dressed down for advocating these measures: At one public meeting, a retired military officer rose and angrily denounced the proceedings.

Rounding out the PPSSCC's top five suggestions are selling the Federal Power Marketing Administration's electric power at market rates ($20 billion gained over three years); requiring the military to use competitive bidding for common spare parts and equipment ($7.3 billion); and upgrading federal computer systems ($6.5 billion).

And then there is the matter of what the Grace Commission delicately calls ''congressional encroachment.'' This means pork-barreling, the practice by powerful members of Congress of obtaining federal money for their districts. The PPSSCC feels this is an interference on the executive branch's administration of government. Such encroachment, according to the panel, costs $9 billion over three years.

The original draft of the PPSSCC's report named those it felt were pork-barreling members of Congress, and their projects.

In the final copy, names and programs were deleted, though to anyone familiar with Congress it is relatively easy to read between the lines and recognize Fort Monroe, for instance. The installation is so old that it is the only military post in the US with a moat, yet is still open after years of Pentagon attempts to shut it down. The survey also points fingers at well-known water projects such as the Garrison Diversion.

One way to solve the problem, suggests the PPSSCC, might be to give the President line-item veto power, so the nations's chief executive could scuttle projects he didn't approve of.

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