More Federal Cuts Lie Ahead, Governors’ Conference Warned

The chairman of the Senate Budget Committee told the nation’s governors Sunday that “we’re fresh out of cash here in Washington,” and warned that more fiscal pain lies ahead for the states.

Sen. Jim Sasser (D-Tenn.) disclaimed any intention to “launch an assault” on President Bush or his budget plan, but added that the White House was following “a most unorthodox approach” to the deficit negotiations.

Sasser was the principal speaker at the opening session of the mid-winter meeting of the National Governors’ Assn.

The Administration was not represented because Richard G. Darman, the White House budget director, declined an invitation to attend.

‘Fair Share’ of Cuts

“All the governors understand we have to take our fair share of cuts to deal with deficit reduction, and we’ve done that,” Michigan Gov. James J. Blanchard said.

Blanchard, a Democrat, said the states were hard-pressed to meet new obligations placed on them by the federal government without the funds to pay for them.

“We can’t take continued mandated automatic expenditures,” he said.

Virginia Gov. Gerald L. Baliles, a Democrat who is chairman of the governors’ group, opened the session by pointing out that the amount budgeted to pay interest on the federal debt “now exceeds spending on all domestic discretionary programs.”

Sasser disputed some of the economic assumptions made by the Bush Administration, particularly its forecast that interest rates will decline to 5.5% in 1990.

Sasser said that while the Administration predicts a balanced budget by 1993, the Congressional Budget Office forecasts a $75-billion deficit for that year.

Blanchard, a former member of Congress, said he was confused by the process being used to reach a budget agreement.

‘Unorthodox Approach’

“We’re confused ourselves this year,” Sasser said. “This is a most unorthodox approach.”

He said the Administration had simply left many budget areas blank and left it to Congress to suggest where cuts ought to be made.

“It’s a little like you going to your state legislatures with your budget and just taking about half of it and throwing it up in the air and saying, ‘OK, fellow, here it is, you solve it.’ ”

Sasser said that while Bush is asking for line-item veto power, a budgetary tool many governors have, “he refuses to offer the Congress this year a line-item budget.”