$50 billion deficit seen
Despite widely publicized attempts by the Carter administration and Congress to produce a balanced budget, the federal deficit for fiscal 1981 will reach an estimated $50 billion, about the same as this year's deficit, the Conference Board reports.
Even without a tax cut and new recession-fighting measures, a deficit of $25 billion is in prospect. But new spending legislation and tax cuts seem almost assured, which would boost the deficit into the $50 billion range.
Some special antirecession spending programs are likely to filter into the fiscal 1981 budget before year end. And proposals for tax cuts have already surfaced and are likely to be implemented by early 1981.
The Conference Board analysis examines the Carter administration's latest budget proposals and Congress's First Budget Resolution, submitted last month.
Huge tax increases -- unprecedented in the midst of a recession -- are at the heart of the 1981 budget as shaped by the administration and revised by Congress. Nearly two-thirds of the federal government's projected revenue gains in fiscal 1981 will be produced by tax increases and inflation.
President Carter's revised budget for fiscal 1981 calls for $44.5 billion in tax increases on top of the sizable tax boosts already enacted in fiscal 1980. While Congress trimmed the President's tax package, it added $4.2 billion of new tax increases. This brings tax increases in the latest congressional budget to are pushed into higher tax brackets even though their real pretax income remains unchanged.