Analysts Cut Projection of 1989 Deficit

Congressional budget analysts today lowered their projection of the 1989 budget deficit to $151.8 billion, down by $1.2 billion from their August projection.

But while their estimate was slightly more optimistic, the Congressional Budget Office said the deficit is still $5.8 billion above the level that by law should trigger automatic across-the-board spending cuts.

However, no government spending cuts are expected to take place because the White House Office of Management and Budget is expected to maintain a more favorable outlook for the deficit in its next report Saturday, the congressional analysts said.

The CBO has only an advisory role in the federal budget process, but its analysts’ report is important politically because it will require President Reagan’s budget analysts to defend their more optimistic budget estimates.

Some Programs Dropped Since August, the White House has been warning Congress against approving costly new programs that could bring the deficit above the $146-billion trigger. Several expensive programs have been dropped since the last warning to Congress in early October when Budget Director James C. Miller III said the projected deficit had reached $145.6 billion.

In the report to the White House and congressional budget committees, the CBO said $1.2 billion in savings were made after Aug. 20 when some of the 13 government spending bills cleared Congress at lower-than-expected levels.

If the congressional budget forecast were followed, $15.8 billion in spending cuts would automatically take place to bring the deficit down to $136 billion.

The report said $7.9 billion would be required in defense programs and $6.2 billion in domestic programs except Social Security benefits, certain low-income assistance programs, veterans’ benefits, federal retirement programs and unemployment payments.