Federal Deficit Hits a Record $211.9 Billion

The federal government reported Friday that it spent $211.9 billion more than it received in revenues during the last fiscal year, resulting in the largest annual budget deficit in U.S. history.

Although the shortfall was $10.3 billion less than the Reagan Administration had initially projected for fiscal 1985, which ended Sept. 30, it was nearly 15% higher than the $185.3 billion deficit of the previous year.

In all, the government spent $945.9 billion in fiscal 1985 against receipts of $734.0 billion, according to a statement issued jointly by the Treasury Department and the Office of Management and Budget.

Debate in Congress

The final tabulation for the 1985 accounts comes at a time when major deficit-cutting measures are being debated in Congress, including one calling for a balanced budget within six years.

The flow of red ink last year brings to $733 billion the accumulated deficits of the four full fiscal years of the Reagan presidency. Until now, the highest deficit had been $207.8 billion in 1983. By contrast, the deficit for fiscal 1982 was $127.94 billion.

There have been federal deficits in every year since 1969, when a $3.2 billion surplus was reported.

The final deficit total for the year was nearly 5% lower than the February estimate of $222.2 billion. Officials said that was because of lower-than-projected military spending and declines in interest rates, which lowered the cost of paying interest on the $1.8 trillion national debt produced by decades of deficit spending.

Nonetheless, the Treasury said it paid $178.9 billion in 1985 in interest on the debt, an increase of 16.3% from 1984.

Largest Chunk

Spending for programs administered by the Department of Health and Human Services--including Social Security--made up the largest chunk of federal spending: $315.6 billion in 1985, an 8% increase from the previous year.

Defense was the second costliest program, with spending of $244.1 billion in 1985, an increase of 10.5%.

The Administration predicted that the deficit for the current fiscal year, which began Oct. 1, will decline to $177.8 billion.

The House earlier in the week approved and sent to the Senate a package of spending cuts that would reduce the deficit by $60 billion over three years.

Sepaprate Plan Approved

A separate plan, calling for sharp, annual reductions in the deficit until the budget is balanced by 1991, has been approved by the Senate and is being negotiated by a House-Senate conference committee.

That measure is attached to a bill that would raise the national debt ceiling to more than $2 trillion.

The final deficit figures for fiscal 1985 were released as the Administration was beginning to assemble a budget for fiscal 1987. President Reagan will present that budget plan to Congress in late January or early February.

In their initial budget requests, most federal agencies have exceeded spending ceilings ordered by the President, according to Administration officials.

Complicated Effforts

The White House budget office has told the agencies that they must reduce their requests, OMB spokesman Edwin L. Dale Jr. said.

Efforts to prepare a new budget are complicated this year by the President’s endorsement of the budget-balancing amendment to the Constitution, which will require deeper budget cuts next year than the President proposed last February, officials said.

Along with the Administration, the Congressional Budget Office and some private economists had forecast a higher deficit for 1985 than actually occurred.

The Congressional Budget Office in February had projected a $214 billion deficit for 1985 and revised it to $210 billion in August.

Almost Exact Estimate

Wharton Econometrics, a private forecasting firm based in Philadelphia, estimated the deficit almost exactly. It had predicted last January that the 1985 deficit would amount to $210.9 billion.

“For most of the year, we have been forecasting a fairly sluggish economy. For next year, we see something of a repeat of this year,” said David Berson, a senior economist for Wharton.

The 1985 deficit of $211.9 billion included spending in both the so-called on-budget and off-budget accounts. The Administration and many in Congress contend that both figures should be used to reflect accurately total government spending.