White House Says Budget Deficit Will Dip to $158.4 Billion

The Reagan Administration projected today that the nation’s budget deficit will drop this year to $158.4 billion, down from the record $220.7 billion in 1986, partly because of an unanticipated tax-revenue windfall.

The Office of Management and Budget, in its mid-year review of the federal budget, also projected that the deficit would continue falling for the next five years.

The report estimated that the deficit would drop to $123.3 billion in 1988 and continue to ease down to a $21-billion shortfall by 1992. The assessment contrasts with that of private and congressional budget analysts, who have forecast deficits in the $180-billion to $200-billion range in 1988-89.

Even by the Administration’s own calculations, the goal of the Gramm-Rudman deficit reduction law of a balanced budget by 1992 would be missed--although not by much.

The deficit for fiscal 1987, which ends Sept. 30, is down from the $173.2 billion in red ink that the Administration had predicted for this year when President Reagan submitted his budget to Congress in January.

Downward Revision

Administration officials had said that the deficit would be revised downward because of larger-than-expected tax revenues stemming from the overhaul of the nation’s income tax code that took effect last Jan. 1.

The new estimate projects $16.1 billion more in revenues than the White House had envisioned in January.

Overall, the budget office said that 1986 receipts would equal $858.5 billion, while spending would equal $1.017 trillion.

The new budget projections are based on revised economic assumptions made public by the Administration earlier this month.

These call for economic growth of 3.2% this year, rising to 3.5% in 1988, based on expansion of the real gross national product, and then falling to 3.4% in 1989-90 and to 3.3% in 1991 and 3.1% in 1992.

Consumer Inflation

The Administration is also forecasting a consumer inflation rate of 4.7% this year, falling to 4.4% in 1988 and easing to 2.5% by 1992.

Most forecasters had predicted a drop in the budget deficit this year more or less in line with that claimed by the Administration. The White House projections on the deficit for 1988 and beyond seem certain to generate debate.

The Administration said the deficit should drop to $123.3 billion in 1988, up from its $107.8 billion forecast in January. It put the 1989 deficit at $112.7 billion, up from its January forecast of $92.8 billion.

While these figures amount to an upward revision beyond 1987 in the Administration’s figures, they still reflect amounts far below those projected by private analysts and the Congressional Budget Office.

Data Resources Inc., a private consulting firm, has projected the 1988 deficit at $182 billion, rising to $210 billion by 1989.

The legislative unit was expected to issue its own revised projections later this week.

Edward M. Gramlich, acting congressional budget director, forecast in testimony last month to the Senate Budget Committee that the 1988 deficit would be in the neighborhood of $181 billion, increasing in 1989 to $198 billion.