TALKING POINTS FOR CABINET PRESENTATION ON BUDGET DEVELOPMENTS MAY 20, 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R001700180003-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: October 26, 2009
• Sequence Number: 3
• Publication Date: May 20, 1982
• Content Type: REPORT

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TALKING POINTS FOR CABINET PRESENTATION ON BUDGET DEVELOPMENTS
May 20, 1982
o Earlier this month, the Senate.Budget Committee'reported a First Concurrent Budget
Resolution which the President supported. Its main features were:
--Significant spending reductions over the FY 1983-85 period:
$34 billion in entitlements savings
$38 billion in discretionary spending savings
$33 billion in management savings; and
$42 billion in Federal pay and COLA restraint.
--It addressed the Social Security solvency problem, calling for $40 billion
in new policy measures over the FY 1983-85 period to bring the trust funds
into balance.
--It provided adequate levels of defense spending growth; spending authority
under the Resolution averaged 13..4% growth annually over the period.
---It held revenue increases to the low end of the range discussed by Capitol
participants in the "Gang of 17" budget talks -- $95 billion over the three
year period.
o Since that time, Congressional wavering on the Social Security front, and pressure
from liberal exponents of far steeper tax increases and defense cuts, have pushed this
Domenici Resolution off the table:
--In the Senate, Domenici has departed substantially from his original package
without Administration support.
.--In the House, Budget Committee Chairman Jones has filed an eleventh hour
substitute to his own Committee's reported resolution calling for far greater
tax increases and defense spending cuts.
--In response, a bipartisan group of conservative Republicans and Democrats
has fashioned the "Bipartisan Recovery Budget which calls for steeper
spending reductions, lower tax increases and higher defense spending than
is provided in Jones' "Coalition" proposal.
NSC Review Completed.
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o The Administration, at this time,'has'not'indicated support for any of these budget
alternatives.
o Clearly, however, the Bipartisan Recovery Budget in the House is, at this point,
the option closest to the President's budget that'stands'any chance of being adopted.
o OMB has worked closely with the sponsors of this Resolution, providing technical
.assistance. This activity, however,:should not be interpreted as a Presidential
blessing of the outcome.
o The political prospects appear as follows. In the House:
-- No package, at this point in time, enjoys clear-cut majority support.
-- Jones' major changes to his Committee resolution are:
o Narrowing the gap between the revenue levels;
o Increasing the defense cuts; and
o Watering down spending reductions.
-- These changes appear designed to' avoid a' referendum on*the tax question,
appeal to the more liberal members of the:Republican'Gypsy Moths, and
close ' ranks' with the'liberal,wing of the Democratic party.
-- In the process, Jones appears to have written bff*the'Bbll Weevils.
-- The biggest danger the Administration faces in this is that many conservatives
in"both parties may oppose both alternatives; if so, it may be that no
Resolution can pass in the House.
In the Senate, meanwhile, Domenici's retreat on Social Security, taxes and spending
is designed to close Republican ranks and ensure victory on a party-line vote. The
major problem with the changes made by Domenici is that,'if'the'Jones'package passes
the House, the conference product will almost certainly be unacceptable to the
Administration.
While the President's signature is not required on a Concurrent Resolution, such a
product would make our work far more difficult over the months ahead as we attempt
to defend the' President's tax' defense and spending, reductionprogram.
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o In this environment, it is important for Administration officials to stay out
of the fray until some clear position develops.
--For example, all Resolutions base their' discretionary spending levels
on a freeze at 1982 levels, and then assume program-by-program adjustments
for specific popular items.
--Enforcement of the freeze, however, would be on an aggregate basis; room
would be available to accomodate increases or decreases from the 1982
mark.
--The pure 1982 freeze level would.provide for $4.9 billion more in spending
than the President's entire FY 1983 discretionary program appropriations
request; hence, would more than.accomodate Presidential increases provided
that offsetting reductions are made elsewhere.
--We should, therefore, not be dragged into undermining the effort to hold
down discretionary spending by criticizing the "freeze concept" with
respect to particular programs where the President has requested increases.
Administration officials should simply express confidence that the
President's request for particular programs can be accomodated within the
overall budget authority level provided.
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