Deficit May Be Thatcher Topic in Washington : Aides Say Arms Control Issue Will Be Raised With Reagan, Congress

Prime Minister Margaret Thatcher will visit the United States next week to meet President Reagan and address Congress amid speculation here over how strongly she will complain about the size of the U.S. deficit.

Some close aides declared Friday that the chief topic in her conversations with the President will be the U.S.-Soviet arms control negotiations scheduled to begin March 12 in Geneva. But other sources close to the prime minister said she is bound to bring up the troubling questions of the U.S. budget deficit and the strength of the U.S. dollar in relation to the British pound.

“She has got to tell the President in no uncertain terms just how dangerous the Europeans consider the budget deficit,” one senior member of the government said. “But she won’t do it publicly--it will be done privately.”

Capital Drain

“She’s not going to arrive with her handbag flailing,” said a source at No. 10 Downing St., the prime minister’s official residence. However, he added that she hopes to persuade the President to reduce the U.S. deficit--which keeps U.S. interest rates high, thus attracting investment from abroad and draining needed capital from other countries.

John Selyn Gummer, chairman of the Conservative Party, told a group of American reporters Friday, “We are very concerned, indeed, about the high American dollar. The American economy is importing our savings--and those from the rest of the world--and exporting inflation.”

Gummer said the inflation came about through high interest rates made necessary in Britain by the effort to keep the pound stable against the dollar.

“The Americans have a very important responsibility to reduce the deficit,” Gummer said. “If they want to continue to be the leader of the Free World, they’ve got to exercise fiscal restraint.”

Fairness Issue

He added that it is “wholly unfair” for the United States to use its strength “to make other countries weaker. This is unacceptable.”

Although Gummer said that he is “pro-American,” he declared that if Europeans perceive the United States to be making no effort to reduce the attraction of the dollar, it could damage America’s relations with its allies. “You do not become stronger through our weakness,” he said.

Some Europeans were upset that President Reagan in recent remarks seemed to ignore the plight of European currencies against the strong dollar.

In Britain, the attempt to shore up the pound sterling against the dollar has resulted in higher interest and mortgage rates, which has raised the cost to industry of borrowing money.

The prime minister will arrive in the United States on Tuesday night and address a joint session of Congress on Wednesday morning.

Anglo-U.S. Ties

Her congressional speech is expected to emphasize Anglo-American relations and the common heritage of the two countries, the state of the North Atlantic Treaty Organization, East-West matters, and arms control, her aides said Friday.

Lunching with the President later, sources said, the prime minister will take up the subject of nuclear arms control with the Soviet Union, the state of the world economy, the U.S. budget and possible efforts for new peace initiatives in the Middle East.