Reagan satisfied despite slump

Press, 22 January 1982, Page 6

Reagan satisfied despite slump

NZPA-Reuter Washington President Reagan, beginning his second year in the White House, said yesterday he had made an impressive start to reviving the economy but called for greater efforts to halt waste, fraud, and mismanagement.

He said his free-enterprise Administration had laid the basis for national renewal by cutting back Government spending and regulation, reducing inflation and itnerest rates, and drawing up a plan which would overcome the current recession.

The conservative President described his liberal Democratic opponents, who say his economic plan is hurting the poor, as “peddlers of pessimism and despair” and said they must be held responsible for the economic decay of past decades.

Mr Reagan gave the favourable assessment of his first year in office in an address to Cabinet officers and other senior Administration officials. But his remarks coincided with a report that the United States economy had sunk deeper into recession in the last three months of 1981. The Commerce Department said the gross national product. the total value of goods

and services, fell sharply by 5.2 per cent after a 1.4 per cent rise in the previous quarter. The fall was the biggest since the recession in the second quarter of 1980. President Reagan settled yesterday on a 1983' United States Budget plan calling for tax increases, a mass transfer of Federal programmes to the states, and the largest deficit ever projected by a United States President. Administration sources said.

Together with previously approved spending cuts, the new taxes would hold the Budget deficit to about SUS7S billion (SNZ92 billion), they said. After winning the largest tax cut in history from Congress last year, the President was reluctant to endorse any proposals to raise taxes. He capitulated only after his advisers warned of annual deficits exceeding SUSIOO billion a year for the indefinite future if higher taxes were not sought, the sources said.

The economic forecast accompanying the new Budget plan calls for virtually no economic growth during 1982 on average. But the economy is expected to grow 5 per cent a year during 1983 and 1984.