President Reagan, in his final budget, sent Congress Monday a $1.15 trillion spending plan for 1990 that contains no new taxes, calls for eliminating 82 programs and projects a deficit of $92.5 billion.
"This budget shows that a gradual elimination of the deficit is possible without raising taxes, without cutting into essential social programs, without devastating defense and without neglecting other national priorities," Reagan said in his budget message. "New taxes are not required."Reagan's budget, which Republican President-elect George Bush and Democrats who control Congress are expected to overhaul in the months ahead, proposes a fiscal 1990 deficit of $92.5 billion, below the $100 billion deficit cap required for next year by the 1985 Gramm-Rudman balanced budget law.
The budget projects a deficit for this fiscal year of $161.5 billion.
The president, who presided over the largest peacetime military buildup in U.S. history, proposed a $315.2 billion Pentagon budget for the fiscal year beginning Oct. 1, representing real growth after inflation of 2 percent (see A2).
Congress passed a $298.8 billion defense spending bill last year, which Reagan said was the fourth straight year that real Pentagon growth had declined.
"This trend cannot continue without any severe impact on combat readiness," Reagan said.
But Reagan, noting that "current farm price support programs are far too costly," proposed slashing those programs by $2 billion in 1990 and by up to $2.5 billion each year from 1991 through 1994.
In the Medicare health care program for the elderly, Reagan proposed cutting the increases "to restrain excessive growth." Under the president's plan, Medicare spending would grow by 9 percent "but not by the 13 percent that would occur under current law."
Reagan also proposed reducing spending by $1.7 billion next year for the Medicaid program, which provides health care to low-income people. Under his plan, Medicaid would grow by 5 percent next year rather than the 9 percent currently proposed.
No cuts were proposed for Social Security recipients.
Reagan budget director Joseph Wright, on NBC's "Today" show Monday, called Medicare "a program that is an absolute time bomb . . . waiting to happen."
"If Medicare is allowed to stand by itself it will exceed Social Security in the year 2000," Wright said. "It will exceed Social Security and defense and cost $2 trillion in 2015."
He said most farm subsidies are going to farmers now making over $100,000 a year.
Some Democrats on Capitol Hill wasted little time criticizing Reagan's budget priorities.
Former House Budget Committee Chairman Rep. Bill Gray, D-Pa., appearing on CBS's "This Morning" program Monday, criticized Reagan's proposed increase for the Pentagon while the president recommended slashing farm subsidies and Medicare and Medicaid growth.
"I don't think that's realistic in terms of priorities and I think what you're probably going to see is George Bush modify that," Gray said. "President Reagan's final budget is really irrelevant at this point."
Senate Democratic leader George Mitchell called it "amiable fiction."
Reagan proposed eliminating 82 federal programs, including federal subsidiesfor Amtrak, the nation's money-losing passenger rail service, urban mass transitgrants and most subsidies for the Postal Service.
He also proposed freezing annual cost of living adjustments for those in the federal employee retirement program.
In a budget where cuts and program eliminations may get most of the attention, Reagan also proposed increasing federal funding for the following programs in1990:
-A $164 million increase in the fight against drug abuse, up to a spending level of $5.7 billion.
-A $193 million increase in prison construction and operation next year, up from $1.6 billion this year.
-A 17 percent increase, to $7.7 billion, for the Federal Aviation Administration to continue its multi-year program of modernizing the nation's air traffic control system.