Reagan Submits Budget

WASHINGTON -- President Reagan yesterday sent Congress a "hard choices" $994 billion budget for fiscal 1987 that would meet targets of the nation's new budget-balancing law through deep cuts in domestic programs, including student aid, and auctioning an array of federal assets.

While few domestic programs were spared the budget knife, the president asked Congress for an increase in defense outlays in 1987 of $15.9 billion, up 6.2 percent from last year, and proposed a 37.8 percent increase over the next five years. The budget would leave all major weapons systems intact while proposing a 75 percent increase in the president's "Star Wars" program of defense against nuclear missiles.

The budget would knock a million college students off aid rolls, cut Medicare and Medicaid health programs for the poor elderly and recycle many of the program eliminations sought unsuccessfully by the president last year.

It would slash, freeze in place or eliminate scores of civilian programs - while granting a small, $94-million increase in funding to the nation's space program.

The budget would raise fees for using the national parks, impose a $10-per-angler licensing fee for fishing in the ocean, trim benefits under the G.I. bill, cut federal support for the Interstate Highway system and require able-bodied welfare recipients to engage in some "work-related activity" to continue receiving federal help.

In all, the budget calls for domestic spending cuts of $25.6 billion. Many of the proposals, including the government-widespending total, had been leaked in advance.

It was the first presidential budget to besubmitted under the new Gramm-Rudman budget law,which would force an end to government deficitspending by 1991. Automatic cuts of around $40billion will be triggered next October under thelaw if there is a budget deadlock between Reaganand Congress.

The first round of Gramm-Rudman cuts, totalling$11.7 billion, have already been triggered. Theywill take effect on March 1. Figures in thepresident's new budget reflect the lower spendinglevels already in place because of these initialcuts.

In his budget message, Reagan told Congressthat his plan would "set the deficit on a downwardpath to a balanced budget by 1991." Reagan saidthe proposals he wanted would present Congresswith "hard choices... but we must find the will toface up to our responsibilities."

But few in Congress held out much likelihoodthat the president's budget would survive majormodification in the coming months of struggle overspending and taxes.

"I don't think there are 25 votes in the UnitedStates Senate for the budget," said Sen. BillBradley (D-N.J.). And Rep. Les Aspin (D-Wis.),chairman of the House Armed Services Committee,called it "DBA--dead before arrival."

Many senior members of both parties in Congresshave expressed doubts that the federal budget canbe balanced with spending cuts alone as Reaganprefers. Senate Republicans have recently urgedReagan to consider a compromise including some newtaxes--possibly an oil import fee.

Signing the budget proposal in the Oval Officetoday, Reagan held open the possibility ofapproving an oil import fee to offset any revenuelost by changes in a tax overhaul bill pending inthe Senate. "I've said that I'm willing to look atthat, on that basis," Reagan said.

Sen. Pete V. Domenici (R-N.M.), chairman of theSenate Budget Committee, proposed today thatReagan call a budget summit "to see if we can puta package together."

The president's budget projected total receiptsof $850.4 billion, for a deficit of $143.6 billionfor the fiscal year beginning on Oct. 1.

Under the budget proposal, which also includesprojections for the next five years, thegovernment would actually end up with a $1.3billion surplus in 1991.

However, to meet the targets leading to abalanced budget, the administration assumed anoptimistic four percent growth in the economy overfour of the next five years, with short-terminterest rates dropping to four percent andinflation to around two percent--projections notshared by most private economists.

A major thrust of this year's budget is thesale of a variety of federal assets andproperties, called "privatization.