$200-Billion Deficit Feared : Reagan Advisers Say More Trims Are Needed

Despite Congress’ approval of a deficit-reduction package of at least $55 billion, President Reagan’s economic advisers have told him that deficits of $200 billion likely will persist without further action.

So the President, through spokesman Larry Speakes, was urging Congress again Friday to “set its mind on spending cuts and stick to it.”

Speakes added that, so far, Congress has fallen short of the savings targets it set for itself in the compromise budget the House and Senate passed Aug. 1.

“Speakes is just all wet on this thing,” responded Christopher J. Matthews, spokesman for House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.).

Estimate Called Optimistic

At a Cabinet meeting last week, acting Budget Director Joseph R. Wright Jr. told the President what some congressional leaders had indicated--the estimate of savings in the budget that passed Congress may be too optimistic.

In addition, the Administration already has announced that it has lowered its estimate for 1985 economic growth, meaning that revenues likely will be lower than expected.

“Unless Congress toes the line on reducing spending, there is a distinct possibility that we face deficits in excess of $200 billion in 1986,” Speakes said.

Albert R. Brashear, another presidential spokesman, said the same forecast holds true for 1987.

The $967.6-billion budget Congress adopted for the 1986 fiscal year beginning Oct. 1 projected a deficit of $171.9 billion for next year, declining to just under $113 billion by 1988.

However, the nonpartisan Congressional Budget Office and the White House Office of Management and Budget now agree that those predictions may be too optimistic. They say that deficits will be higher, even if the three-year savings of up to $279.6 billion called for in Congress’ budget are achieved.

Speakes confirmed that at last week’s Cabinet meeting, preliminary plans for drawing up next year’s budget were discussed. He also indicated that the President will revive his goal of cutting deficits to less than $100 billion in the next three years, leaving the red ink at a level equal to about 2% of the gross national product.

Meanwhile, Speakes said the money bills that Congress worked on before leaving for a monthlong recess exceed budget targets.

“Looking at Congress’ track record on appropriations bills over the past five years, it’s entirely possible that their appropriation bills will force the budget even higher” than already is estimated, Speakes said.

He said the House already has passed eight of the 13 regular annual appropriation bills and that the Senate has approved two.

“Our estimates are they are $15 billion to $19 billion over budget,” Speakes said. “In past years, congressional appropriation spending has overrun their targets by an average of $28 billion.”