Members of Budget Panels Angry Over Deficit Surge

Members of Congress expressed shock and anger Wednesday over news that the budget deficit is likely to be almost $70 billion larger than was estimated in February, but indicated that they are unlikely to unravel the deficit-reduction accord reached with the White House last fall.

At hearings of both the House and Senate budget committees, lawmakers criticized Richard G. Darman, director of the White House Office of Management and Budget, for miscalculating the deficit. Darman admitted that the Administration made a mistake in the way it compiled its previous estimate.

Monday, the White House disclosed that the deficit for fiscal 1992 would hit an all-time high of $348.3 billion rather than the $280.9 billion it had predicted in February.

The Administration had said then that costs of the Persian Gulf War, the recession and the savings and loan crisis had led to a huge increase in the size of the deficit. And the White House noted that “technical revisions,” which it did not explain, had also resulted in a sharp drop in the government’s estimates of future revenues.

During his midyear budget review Wednesday, Darman acknowledged to the committees that those technical revisions came about because of an error by budget analysts at the Treasury Department, a mistake that led to a drop of nearly $20 billion in the amount of tax revenues expected in fiscal 1992, which begins in October.

He said that Treasury officials had calculated that the government would collect taxes on alimony, pension income and royalties at a rate of 20%, instead of the correct figure of 10%.

Congressional leaders, already frustrated by the straitjacket imposed on federal spending by last fall’s budget accord, expressed dismay at the mistake and the apparent inability of the Bush Administration to gain control over the deficit.

“I must say this certainly shakes my confidence in our ability to make any fiscal forecast with regard to our deficit,” said Sen. Jim Sasser (D-Tenn.), chairman of the Senate Budget Committee. “If we are going to have these gnomes in the basement of the Treasury building losing billions of dollars, I feel like all of those days and weeks (working out a budget agreement) were for naught, quite frankly.”

But Darman argued that, despite the agreement’s faults, the new budget accord is a vast improvement over the earlier Gramm-Rudman rules, and that Congress and the Administration should both stick to it. He added that the Administration still believes that the deficit will finally begin to decline once the massive taxpayer bailout for the savings and loan crisis is over.

But despite anger and apparent confusion, few lawmakers seemed willing to say that Congress should abandon the five-year deficit-reduction plan. Instead, they expressed a growing sense of helplessness.

“It’s not getting better, and it’s not going to get better,” complained Sen. Terry Sanford (D-N.C.).

Said Sen. Charles E. Grassley (R-Iowa): “Maybe what you are hearing is a cry for help from Congress.”