Carter's Farewell Budget

The 1982 projections may overwhelm Reagan's plans for cutting taxes

The 1982 budget that Jimmy Carter sent to Congress last week was a cold slap of reality for Ronald Reagan on the eve of his Inauguration. The legacy of federal largesse that Reagan inherits is far worse than he had suspected, and the yawning budget deficit severely threatens his strategy to stimulate the U.S. economy by cutting taxes.

The new budget does little to reverse the federal spending machine. Outlays in fiscal 1982 are slated to rise by 11.5%, to $739 billion, leaving a projected deficit of $27.5 billion. More than 75% of...

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