White House now indicates . . .; '82, '83 deficits may top $100 billion
Early next month, Congress and the American people will hear from the White House that -- as some have predicted -- the government's budget deficit is likely to top $100 billion in both fiscal 1982 and 1983.
Extra spending caused by the current recession is forcing the Reagan administration to abandon its long-held hope that the flood of red ink could be held below $100 billion.
As the jobless rate rises, so do outlays for unemployment compensation, food stamps, and related items. Tax revenues fall when people are out of work and companies lose money.
As recently as early February, Treasury Secretary Donald T. Regan said that the ''budget deficit for fiscal 1982 will be less than $100 billion and then will be trending down. This,'' he added, ''is contrary to many expectations.''
He was right on the last point. The Congressional Budget Office (CBO) and many independent experts forecast budget deficits much higher than $100 billion, partly because Congress is not expected to give President Reagan all the spending cuts he wants.
Now Secretary Regan and other top officials are conceding that, for reasons beyond the administration's control, budgetary red ink will rise.
A White House projection of higher deficits is unlikely to shake Wall Street, which already operates on the assumption that deficits will climb into the future, without some dramatic changes in economic policy.
The President is holding out against such changes and he is not expected to shift course.
But his Office of Management and Budget (OMB), headed by David A. Stockman, is required by law to inform Congress on April 10 of new economic factors that need to be folded into the budget process.
One change is the need to pay American farmers higher support prices. This item alone, according to Mr. Stockman, may boost fiscal 1982 spending by $4 billion and add $4.9 billion to 1983 outlays.
This would swell the official White House estimate of the 1982 deficit to $ 102.6 billion and the 1983 shortfall from $91.5 billion to $96.4 billion.
Given the fluidity of the economy, OMB officials still are wrestling with how much to include and what to exclude in the forthcoming report.
The US Treasury will collect less revenue than expected from windfall profits taxes on American oil companies, because of the decline in oil prices. ''Every $ 1 a barrel decrease in oil prices,'' said an OMB official, ''means roughly $750 million less in windfall profits tax.'' Also, the government is likely to collect less money than the OMB had expected from the leasing of potential oil tracts along the Outer Continental Shelf.
These oil-related items will reduce government revenues and thereby contribute to higher deficits.
The April 10 revision by the White House, despite its acknowledgment of higher deficits, is unlikely to square with current projections by the CBO and other forecasters.
One reason, explained a White House official, is that the April 10 figures will assume that Congress is going to give the President everything he asks for in his 1983 budget, both in the way of spending cuts and revenue gains.
Meanwhile, the government's financial performance during the first five months of fiscal 1982, which began Oct. 1, 1981, has economists puzzled. ''Tax receipts have been higher than expected,'' said OMB spokesman Edwin L. Dale, ''and actual spending has been less than expected -- for reasons no one yet understands.''
''Through February 1982,'' says economist Alan Greenspan, ''the 1982 deficit has been running at a $66 billion annual rate -- far below expectations.'' For this and other reasons, said a White House official, a $100 billion deficit for fiscal 1982 -- while likely -- is not yet certain.