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Lower deficit would ease interest rates - Feldstein

President Reagan's top economic forecaster said the value of the dollar is likely to decline a bit this year - perhaps 4 or 5 percent - if Mr. Reagan acts to trim the budget.

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If Reagan can reduce the federal budget deficit, now projected to be at least Council of Economic Advisers Chairman Martin Feldstein told U.S. News & World Report in an interview published Monday.

But Dr. Feldstein also repeated his warnings that failure to cut the deficit could lead to a new recession sometime after 1984.