Business: Reining in a Runaway Budget

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The White House tries for fiscal belt tightening without much pinch

Of all the ways that inflation can and must be fought, none is more important than beating the bloat out of the federal budget. The fiscal 1980 spending program that Jimmy Carter unveiled this week is a modest, but only modest, success in the struggle. Carter has always described his budgets as lean and tight, and this one, the third of his Administration, is certainly leaner and tighter than the puffed-up document for fiscal 1979 that he sent to Congress a year ago.

That said, next year's proposed spending of $531.6 billion, a 7.7% increase over this year's, is not about to put the economy on the stringent rations that conservatives have been demanding and liberals fearing.

Though the first sentence of the budget describes the package as "lean and austere," a more accurate description is found inside: "Overall, this budget, adjusted for inflation, provides for about the same level of real federal activity in 1980 as in 1978 and 1979." In fact, the document calls for little more than a moderate slowing in the rate of growth of Government expenditures, as well as for a judicious pruning of the deficit, which is projected to decline from its current level of $37.4 billion to $29 billion next year. As sketched out by the budget, the theme for fiscal 1980 looks to be belt tightening without the pinch.

Most economists welcomed the thrust of the budget as signaling a new and important appreciation in Washington that Government has to begin at least trying to live within its means. Quipped Alan Greenspan, former economic adviser to President Ford: "It's a good Republican budget." Rather than launching new programs, the budget underscores the national return to the old-time economic values of prudence and restraint. Says Carter in his covering letter to Congress: "I believe that we must firmly limit what the Government taxes and spends. We must balance public and private needs. We must set priorities more carefully. We must change some old priorities and establish new ones. We must defer some of our demands if we are to meet adequately today's most critical needs."

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