President to Unveil $1.1-Trillion Budget for 1989

President Reagan prepared Wednesday to send his fiscal 1989 spending plan to Congress and launch the last and likely least contentious budget debate of his presidency.

The $1.1-trillion fiscal blueprint, being unveiled today, was expected to reprise Reagan’s oft-rejected requests for cutting domestic programs with some new proposals for transferring government functions including parks management and perhaps Amtrak railroad service to private industry.

But the plan also was being crafted to comply with the spending agreement reached last fall in a budget summit between Reagan and congressional leaders.

Since the agreement spells out overall spending and tax levels, including allocations for the military, domestic programs and foreign aid, this year’s battles are expected to focus on the details rather than the thrust of the budget priorities.

The agreement should help smooth the budget’s path through Congress, since the balance between domestic and military spending totals is annually one of the most difficult to achieve.

In addition, Democratic leaders have pledged to speed the process and avoid packing all spending into a single, massive bill as they did in a $600-billion measure last year.

White House estimates show that the President’s plan, under the Administration’s own assumptions of how the economy will fare next year, would produce a deficit of $143 billion in the fiscal year beginning Oct. 1.

Besides the requirements of the budget agreement, the Administration is proposing about $14 billion in sales of government assets and “privatization” initiatives to drop the deficit to $129.5 billion.

The fiscal 1987 deficit was $150.4 billion, and red ink this year is expected to be $146.7 billion, the Administration estimates.