1989 Deficit Could Top Limit by $31 Billion

The federal budget deficit in the next fiscal year could balloon to $167 billion, $31 billion over the ceiling set by law, according to economic forecasts outlined in a published report today.

The Washington Post reported that it had obtained White House budget documents containing the private economic forecasts, as well as other fiscal 1989 budget figures from the Office of Management and Budget.

The Reagan Administration is working on a proposed $1.1-trillion federal spending package for fiscal 1989. The Gramm-Rudman deficit-reduction law sets $136 billion as the top limit for the deficit.

But even before the private forecasts were disclosed, White House budget director James C. Miller III had hinted that additional deficit-reduction measures might be needed to reach the target.

The Post said the forecasts indicate that the deficit could reach $167 billion in fiscal 1989, which begins Oct. 1. That figure is based on OMB’s projections of spending and taxes using an economic forecast prepared by Blue Chip Economic Indicators, which surveys many corporate and university economists and averages their predictions.

The draft of the Administration’s budget adheres to the overall guidelines set by last November’s White House-congressional agreement. It calls for $294 billion in defense spending, $513 billion in outlays for entitlement programs such as Social Security and Medicare, $169 billion for domestic programs that are subject to annual appropriations, and $16 billion for international affairs programs such as foreign aid.