Reagan Budget plan in peril

Press, 28 October 1981, Page 8

Reagan Budget plan in peril

NZPA-Reuter Washington President Reagan's Budget Director (Mr David Stockman) conceded yesterdaj' that the President’s economic programme was in danger of falling apart and that his goal of balancing the Federal Budget by 1984 was seriously behind schedule. In the gloomiest Administration economic pronouncement to date, Mr Stockman said the Federal spending deficit could range from SUS22O billion to SUS32O billion over the next three years. “Without decisive remedial action in the next six months, the truth is likely to be in the higher rather than

the lower end of this range,” Mr Stockman told the National Press Club. He blamed part of the extra spending on the failure of Congress to approve all the Budget cuts recommended by the President. But he acknowledged that the Administration had been too optimistic in its forecast of interest rates and Government income from tax revenues. He said the tight monetary policies of the Federal Reserve (the United States central bank) were bringing inflation down sooner and; more successfully than expected and thus should not be changed.