Promises Early Action on Reducing Deficit : Bush Hits Reports He Will Cut Medicare

From Times Wire Services

President-elect George Bush said Friday that he will turn his attention quickly to the problem of cutting the U.S. budget deficit, but he brushed aside questions on reports that he may attempt to trim $3.5 billion to $5 billion from Medicare.

“I keep reading in the papers a lot of things I’m supposed to be doing that I don’t know anything about,” Bush told reporters during a shopping trip on a Thanksgiving vacation at his family’s seaside retreat.

Bush indicated that he has made no decisions yet on budget cuts, and a spokesman, Stephen Hart, said suggestions on Medicare cuts were “completely speculative.”

Final Submission


Bush refused to comment further on recent news reports that his Administration would go along with billions of dollars’ worth of Medicare cuts expected to be proposed in President Reagan’s final budget submission to Congress in January.

Meanwhile, Reagan’s current budget director, Joseph Wright Jr., said Friday that the President’s final budget will be a blueprint for bringing the federal deficit down to zero by 1993 with no new taxes.

Wright said in an interview that Reagan’s final budget proposal is “in effect a four-year budget.”

“We are going to budget for balance in fiscal 1993,” he said. This would involve deficit cuts of at least $35 billion in 1989, $52 billion in 1990, $66 billion in 1991 and $66 billion in 1992.


Wright said the 1989 deficit cuts will focus on federal credit programs, controls on federal spending for entitlement programs such as Medicare and cuts in other programs disliked by Reagan.

Reagan ruled out tampering with Social Security benefits for retirees and ordered that cuts in entitlement programs be directed at the providers of services, not the beneficiaries.

He will propose that the defense buildup be continued at least at 2% over the rate of inflation, the current rate, Wright said.

Sales of Assets

In addition, the Reagan budget will offer ideas for sales of U.S. credit assets and of real property and will emphasize sales to private industry of some government functions.

Bush vowed earlier this week to appoint negotiators on the first day of his presidency to meet with members of Congress on budget cuts.

Richard G. Darman, Bush’s choice as budget director, suggested the strategy, whereby Bush would refrain from submitting his own rewrite of the Reagan budget but instead would work behind the scenes with Congress to forge a compromise.

But Darman has also said that Medicare is an area where Bush will look for savings. Without changes, the giant health insurance program for the elderly is projected to cost the government $97.7 billion in fiscal 1990, which starts next October, an increase of 14.5% over the current year. That rate of growth is four times the expected rate of overall inflation.