BUSH'S BUDGET FOCUSES ON LONG-TERM GROWTH
WASHINGTON — PRESIDENT Bush sent to Congress Monday a $1.45 trillion budget for fiscal 1992 that calls for $295.2 billion to be spent on defense and for a deficit of $280.9 billion. Overall proposed spending increases do not keep pace with inflation. The budget plan is only 2.6 percent higher than this year's spending of $1.41 trillion, while inflation last year soared by more than 6 percent.
Despite the limits on spending imposed by last year's deficit-reduction agreement, the deficit is projected to rise to a record $318.1 billion this fiscal year, dwarfing the previous record of $221 billion in 1986, before dropping to $280.9 billion in 1992.
The budget for fiscal 1992, which starts Oct. 1, contains no initiatives to lift the economy out of recession, but focuses on promoting long-term economic growth.
The spending plan includes a proposed reduction in taxes on capital gains from the sale of long-term assets such as stocks - a proposal that was rejected by the Democrat-controlled Congress last year.
Bush also proposed a family savings plan, investment and enterprise zones, major expansion of the highway system, and a program to encourage home ownership. He proposed an $8.4 billion increase in federal spending on research and development to $76 billion in fiscal 1992, the highest ever.
The budget also proposes a comprehensive reform of the nation's banking and financial services system. It includes an increase of $105.5 billion this fiscal year for the S&L cleanup program and to shore up the commercial bank deposit insurance fund.
The administration said the bank insurance fund would run out of money in fiscal 1992 without an infusion of additional funds. The administration plans to detail its proposed deposit insurance and bank reform measures in a report to be released today.