Reagan Offers $994-Billion ‘Hard-Choices’ 1987 Budget

President Reagan today sent Congress a $994-billion “hard-choices” budget for fiscal 1987 that would eliminate mass transit aid, legal assistance for the poor, the Small Business Administration, housing programs and dozens of other federal programs he called “ineffective, duplicative or unnecessary.”

In his budget message, Reagan told Congress that his plan would “set the deficit on a downward path to a balanced budget by 1991.” Reagan said the proposals he wants will present Congress with “hard choices . . . but we must find the will to face up to our responsibilities.”

But few in Congress saw much likelihood that the Reagan budget will survive major modification in the coming months of struggle over spending and taxes.

“I don’t think there are 25 votes in the United States Senate for the budget,” said Sen. Bill Bradley (D-N.J.). And Rep. Les Aspin (D-Wis.), chairman of the House Armed Services Committee, called it “DBA--dead before arrival.”

Many of the items on Reagan’s hit list have been proposed in the past and rejected, in total or in part.

Gramm-Rudman Support

But Congress will have to take another look, at least at some, because the President’s arguments now are bolstered by the Gramm-Rudman deficit reduction law, under which saving one agency means cutting back elsewhere or raising taxes.

While few domestic programs were spared the budget knife, Reagan asked Congress for an increase in defense outlays in 1987 of $15.9 billion, up 6.2% from last year, and proposed a 37.8% increase over the next five years.

The budget would leave all major weapons systems intact while proposing a 75% increase in the President’s “Star Wars” program of defense against nuclear missiles.

The budget would slash, freeze in place or eliminate scores of civilian programs while granting a small, $94-million increase in funding to the nation’s space program.

It would knock 1 million college students off aid rolls, cut Medicare and Medicaid health programs for the poor and elderly and recycle many of the program eliminations sought unsuccessfully by the President last year.

Would Terminate ICC

It proposes, for the first time, termination of the Interstate Commerce Commission, which regulates interstate shipping and is the oldest of the government’s regulatory agencies.

The Administration backed off its earlier proposal to eliminate the Job Corps, although it wants to trim the program back from more than $600 million a year to less than $400 million.

After getting Congress last year to cut back subsidies for Amtrak passenger trains, the Administration is proposing again to eliminate them completely.

The budget would raise fees for using the national parks, trim benefits under the GI Bill of Rights, cut federal support for the interstate highway system and require able-bodied welfare recipients to engage in some “work-related activity” to continue receiving federal help.

In all, the budget calls for domestic spending cuts of $25.6 billion. Many of the proposals, including the government-wide spending total, had been leaked in advance.

$143.6-Billion Deficit

The President’s budget projected total receipts of $850.4 billion, for a deficit of $143.6 billion for the fiscal year beginning Oct. 1.

Under the budget proposal, which also includes projections for the next five years, the government would theoretically end up with a $1.3-billion surplus in 1991.

However, to meet the targets leading to a balanced budget, the Administration assumed an optimistic 4% growth in the economy over four of the next five years, with short-term interest rates dropping to 4% and inflation to about 2%--projections not shared by most experts.