White House Fears a Deficit of $200 Billion

Despite the just-concluded seven-month struggle to bring the federal budget more into balance, the White House warned Friday that there is a “distinct possibility” that next year’s deficit may total more than $200 billion.

A leading Democratic member of the House Budget Committee also conceded that the deficit is likely to exceed $200 billion--but he and the Reagan Administration disagreed sharply on why and on who is to blame.

On one side, White House spokesman Larry Speakes charged that Congress may overshoot its own new budget limits, threatening the modest deficit reductions projected just a week ago.

Sluggish Economy

But California Rep. Vic Fazio (D-Sacramento), a member of both the Budget and Appropriations committees, countered that the problem could be traced to the Administration’s handling of the sluggish economy and that President Reagan was unfairly trying to make Congress the scapegoat.

Officials of the White House’s Office of Management and Budget, meanwhile, cited both congressional spending proposals and a projected slowdown in economic growth as factors contributing to the swelling deficit, and added: “Chances are it will be over $200 billion.”

To some analysts, it seemed as though Washington was bracing the nation for more gloomy deficit news and engaging in finger-pointing over who will be blamed.

When Congress passed its nearly $1-trillion federal budget Aug. 1, it projected a deficit of $172 billion, down from the nearly $230 billion predicted at the start of the year.

Leaders of both parties, while not particularly enthusiastic, voiced the belief that this was the best they could accomplish, given White House disinterest in raising taxes or cutting into Social Security. At the time, President Reagan called it “a beginning.”

But on Friday, the White House estimated that separate appropriations bills passed by the House--eight of 13 required to keep the government running--are already $15 billion to $19 billion over budget. The budget itself is merely a blueprint for spending, while the appropriations measures actually contain the funding for federal programs.

‘Absolutely Imperative’

“Congress has imposed upon itself a spending goal, and it is absolutely imperative that they meet this spending goal,” Speakes said.

House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.), in a written statement, tartly rejected the Administration charge of congressional overspending, branding it “absolutely false.”

A spokesman for the Speaker said the Administration erred by contrasting congressional spending proposals with the outdated budget proposal originally submitted by the President, instead of the budget as passed. “I think we caught them with their pants down,” the aide said.

“We’re not over budget, that’s a crock. . . . We’re $9 billion under our budget limits,” responded Fazio.

‘Wildly Optimistic’

“The Administration is really confronted now by the economic realities. They have been wildly optimistic,” Fazio said. “The White House now has nothing to fall back on except to blame Congress. I wouldn’t be surprised that, because of the economy, the $200-billion figure isn’t far off.”

However, the Administration stuck by its charge that Congress is heading toward breaking its own budget limits. One example listed by Speakes was a pending agricultural assistance bill that he said has “doubled or tripled” from its beginning $20-billion price tag and “is a serious contender to be classified as a budget buster.”

In this case, however, the Administration is not just facing Democratic demands for spending. Senate Majority Leader Bob Dole (R-Kan.), who has warned that a sustained huge deficit will result in dire long-term consequences, told a Washington audience earlier in the week: “We’re going to have to pump a lot of money into the farms of America.”