BUSH SEEKING $1.5 TRILLION/ PLAN WOULD SPUR RECOVERY, AIDES SAY

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, January 30, 1992                   TAG: 9201300137
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A1   EDITION: METRO 
SOURCE: Los Angeles Times
DATELINE: WASHINGTON                                LENGTH: Medium
BUSH SEEKING $1.5 TRILLION/ PLAN WOULD SPUR RECOVERY, AIDES SAY
President Bush presented Congress on Wednesday with a $1.5 trillion budget for 1993 that combines modest cuts in defense spending, standstill funding for most domestic programs and an economic stimulus plan that administration officials vowed would produce a "certain" recovery by midyear.
The administration said the $50.4 billion in additional defense cuts it has proposed over five years must be used to reduce the deficit rather than to finance domestic needs. And the White House intends to pay for its $24.6 billion anti-recession package, in part, with controversial caps on growth of entitlement programs such as Medicare and Medicaid.
Senior administration officials promised their package would end the recession and add 500,000 jobs if Congress approved all its provisions.
But the 2,000-page budget, which forecasts that the federal deficit will balloon to a record $399.4 billion this year before declining to $351.9 billion in 1993, immediately ran into strong opposition from the Democratic-controlled Congress.
Key lawmakers assailed the president for refusing to make far deeper cuts in the nation's armed forces so the resulting "peace dividend" could be used for bigger tax cuts or a more aggressive domestic spending agenda to help the poor and create new jobs.
Without steeper defense cuts, the Bush plans represents "warmed-over Reaganomics," said Sen. Brock Adams, D-Wash., and includes "nothing substantive that will help middle-class and low-income Americans."
Democrats also charged that the bulk of Bush's proposed tax cuts were aimed at affluent people and the business community. "Bush's plan for tax cuts was, again, aimed at the wealthiest Americans," said Sen. Al Gore, D-Tenn.
The administration's detailed tax and budget proposals, which attempt to achieve the seemingly conflicting goals of stimulating the economy while containing the deficit, were released against the gloomy backdrop of the longest recession since World War II.
The president's 1993 budget - the first since the demise of the Soviet Union and the end of the Cold War - calls for additional cuts in the defense budget of $50.4 billion over five years, including $7.9 billion in the 1993 fiscal year that begins Oct. 1, 1992.
Those figures pale in comparison with the cuts proposed by some some leading Democrats, who want to slash Pentagon spending by $100 billion or more over five years and divert much of the savings to job-creating programs instead of tax cuts or deficit reduction.
While Bush asserted that his budget did not rely on any tax increases to offset its tax reductions, a few small tax increases and other new fees are buried deep in the budget document.
The White House said that if the president's package was quickly approved - Bush is urging Congress to enact the anti-recession elements of his tax package by March 20 - the economy would grow by a respectable 2.2 percent in 1992. Without the plan, the administration said, annual growth would be 1.6 percent.
Yet leading Democrats, who see the nation's economic woes as the key to the 1992 presidential election, quickly dismissed Bush's March deadline.
"The president has given us 50 days to send him a solution when it took him 480 days to notice we had an economic problem in this country," said Senate Budget Committee Chairman James Sasser, D-Tenn.

by Archana Subramaniam by CNB