Carter set to slash spending in bid to hit U.S. inflation

Press, 2 April 1980, Page 9

Carter set to slash spending in bid to hit U.S. inflation

NZPA-Reuter Washington . President Jimmy Carter.; proposes to slash planned: United States Government!: spending everything, frpm'i defence on down, in a driven to curb inflation and create, a record $16,500 million;! Budget surplus. ■ ji Unveiling the details of! his ambitious 1981 Budget- !; cutting blueprint, the Presi-; dent said such belt-tight- : ening is essential if the! United .States is to begin] controlling its 18 per cent] annual inflation rate! d Mr Carter, who also said I he • expected a mild United States economic recession ; 'this year, predicted a fierce fight with Congress over i spending cuts that are bound!; .to be .controversial in this! election yrnar. He vowed to veto any] legislation that threatened; his main goal of balancing]: the Budget for the first time] since 1969.

; The two main surprises in; •his plan were that it would! .go even beyond the cost-cut-] ting targets he first outlined] lon March 14 and would ex-li 'tend into the area of defence, By a combination of re-, ;duced spending and in-!' (creased revenue collections,i; IMr Carter’s revised 19811 'Budget would produce a I 816.500 million surplus, one !third bigger than the pre-]; jvious high of $12,000 million] I recorded in 1948. I • When the President an- ■ bounced two weeks ago that! he intended to remodel his original 1981 Budget proposal, he said he would aifh for a <513,000 million surplus. i The original Budget foreisaw a $15,800 million deficit. ! This one would finance $611,500 million in spending | with $628,000 million in revenues. boosted partly by; inew fees on imported oil. ; j The list of proposed 'spending reductions — total-!

ling $15,000 million — in-] I eluded a $lOOO million cut in; (the amount originally in-' tended to be spent on' defence next year. I The savings would lower; the over-all defence budget .to about $141,000 million. 1 (They would be achieved by! isuch means as reducing. I planned purchases of air-i (craft and other weapons and] cutting back on military reisearch. j Many analysts.: had asIsumed that the heightened I concern for national security, brought about by the Iran and Afghan crisis, would put defence beyond the reach of the budget-cutters. Examples of other proposed reductions included a $2200 million cut in anti-re-cession aid to states and cities, a hot potato in an election year, potential reductions in Government i worker pensions, and delay lin welfare-reform plans. •]