Budget Impasse May Last Into Fall

With neither Congress nor President Reagan ready to budge, the current impasse on how to reduce the deficit may stretch through “a long hot summer and into the early fall,” White House Budget Director James C. Miller III predicted Monday.

Although he rejected the latest proposal being considered in budget negotiations between the House and Senate, Miller insisted that the White House remains open to compromise. “We don’t stand around like ostriches,” he told reporters, “and that is the major difference between us and Congress.”

Miller once again proposed that Congress look to deeper domestic spending cuts, user fees and sale of government assets rather than taxes as a means of reaching the $144-billion deficit target required by the Gramm-Rudman law. He compiled what he called a “shopping list” of those options--all of which Congress has previously rejected--in a letter sent Monday to Senate Budget Committee Chairman Pete V. Domenici (R-N.M.).

Both the House and Senate have passed budgets that would reach the Gramm-Rudman target by slashing Reagan’s defense-spending request and raising taxes by $10.7 billion, about triple the amount Reagan has proposed. House and Senate negotiators are now trying to iron out the differences between the two versions of the budget.

In his letter to Domenici, Miller wrote that the Administration “cannot support” a Senate proposal to force President Reagan to accept $7.3 billion in additional taxes as a means of blunting the cuts that Congress would make in his defense request.

Under current law, next year’s deficit is officially projected to exceed the Gramm-Rudman target by about $30 billion. But Miller said that lower-than-expected economic growth may make it more difficult to reach the Gramm-Rudman target than Reagan Administration forecasters had earlier predicted.

“Our optimism has cooled just a little bit,” he said. But he declined to be specific about how much bigger the shortfall may be.

Miller also announced new policies aimed at quieting criticism that his Office of Management and Budget has taken for itself rule-making power that properly belongs in various federal agencies. OMB, which often has the final word on new regulations issued by the agencies, has been accused of squelching proposals that clash with the Administration’s free-market philosophy.

“We need to dispel that concern, and the way to do it is to open up the process,” said Wendy L. Gramm, who heads OMB’s Office of Information and Regulatory Affairs. The new rules would allow public disclosure of written correspondence between the agencies and OMB.

The proposal was welcomed by congressional critics.

“From now on, we will know when rules go to OMB and how long they stay there,” said Sen. David Durenberger (R-Minn.), chairman of the Senate Governmental Affairs subcommittee on intergovernmental relations. “We will see all copies of all drafts of all rules. We will know who OMB is talking to and what they are saying. And we will know what rules never make it through the process.”