P.M. BRIEFING : Agencies Plan Worst-Case Cuts

With President Bush and Congress still unable to agree on how to reduce the budget deficit, the Bush Administration has ordered federal agencies to spell out how they plan to cut spending by 31.9%, it was learned today.

Under a worst-case scenario, most departments would have to reduce spending by a total of $104 billion during the budget year that begins Oct. 1. Those cuts, known in Washington jargon as “sequestration,” would take effect Oct. 15 unless Congress and Bush agree on a package of tax increases and targeted spending reductions.

Negotiations on a package have been suspended until early next month. However, there is a general expectation that the government will never permit such deep spending reductions to take effect, especially with the economy apparently falling into a recession.

Even before the latest upheaval in the Middle East, negotiators had been planning on a deficit-reduction plan of no more than about $50 billion for 1991.