President Reagan and his budget director sharply disputed a Congressional Budget Office report that the administration has grossly underestimated the cost of its 1982 budget proposal. At the same time, House Speaker Thomas A. O'Neill Jr. offered his harshest criticism of Mr. Reagan to date, saying the President is "going down the wrong road."
Reagan, in remarks on Capitol Hill, first said the CBO report was based on "phony" figures, but then softened his criticism to say the report used "differing assumptions." He said his first description "probably wasn't the proper word to use."
Budget Director David A. Stockman joined the counterattack later in the day by taking the extraordinary step of inviting reporters into his office to criticize the CBO. He said the report ignores the fact that Reagan has charted "the most drastic policy change in postwar history."