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President Seeks to 'Defer' Spending Until 1982 Appropriations Are Voted

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Washington--The Department of Education, authorized by Congress to spend $13.9 billion on fiscal 1982 education programs, has been instructed by the federal budget office to reduce that budget temporarily by 12 percent, department officials said recently.

Federal education programs would be funded at a $12.6-billion annual rate--reflecting the President's latest budget-reduction proposal--between Oct. 1 and Nov. 20, while Administration and Congressional leaders wrangle over final funding figures, officials said.

Budget Deferral

The temporary measure, known as budget deferral, is part of a package of reductions scheduled to be sent by the Office of Management and Budget (omb) to Congress sometime this week.

The budget deferral "messages" would inform members that, because of growth in the projected 1982 budget deficit, the President would like to hold federal spending to his proposed levels while Congress completes work on the 1982 appropriations bills, according to an Administration official.

Not only education, but most other domestic spending programs as well, were said to be targets of the 12-percent reduction. The total effort, which would limit spending to the lower levels for a total of 50 days, would save an estimated $1 billion, budget officials say.

The "messages" can be vetoed by a majority of either House or Senate members. As of the middle of last week, although no formal announcement had been made by leaders of the Democratic-controlled House, staff members in the office of Speaker Thomas P. O'Neill Jr. said the House would attempt to veto the deferral.

One roadblock for the House is the size of the deferral package. For each of the nearly 800 individual line items in the federal budget, a separate "message" would be sent to the corresponding appropriations subcommittee, according to omb spokesman Edwin L. Dale Jr.

One Congressional staff member suggested House leaders might lump all deferral "messages" together into an "omnibus" resolution, enabling the House to nullify the total package with one vote.

If such an effort by Democrats were successful, it would represent an ironic twist to the use of bill "packaging"--a strategy that served the Reagan Administration well during debate over the budget "reconciliation" and tax-cut bills.

The education budget deferral was not expected by department officials or Congressional staff members to affect funding immediately for most federal education programs.

Because most programs are forward-funded, fiscal 1982 funds will not be sent to states and local school systems until next July.

One important exception to this is3the impact-aid program, for which money is disbursed on a current basis. A $122-million difference exists between the $475-million spending level for impact aid set by Congress and the $353-million level sought by the President.

Another area affected is the salaries and expenses budget of the Education Department. The Administration proposal is $34 million less than the $304 million proposed by the House.

"A rif [reduction in force] is almost inevitable; it could happen at any time," a department official said last week.

Another official estimated that as many as 1,600 department positions might be eliminated.

The deferral strategy is the latest attempt by the Administration to gain Congressional sanction for its effort to slash the federal budget by $16 billion above and beyond the $35-billion cut enacted last summer in the budget "reconciliation" bill.

That effort was seemingly thwarted earlier this month when the House Appropriations Committee ignored the President's budget request--which he announced in a Sept. 24 televised speech--and passed an appropriation bill that provided $13.9 billion for the Education Department. (See Education Week, Oct. 12.)

The Senate Appropriations Committee, chaired by Mark O. Hatfield, Republican of Oregon, has not completed work on its education funding bill, although a subcommittee recommended a spending level for education similar to that passed by the House.

Proposes Defense Cut

Senator Hatfield, a long-time foe of large-scale defense spending, is expected by observers to attempt to reduce the defense budget in order to enable Congress to pass the education bill at a higher level.

As a way to achieve this reduction--which the Reagan Administration is unlikely to go along with--the Senator recently announced he would attempt to secure6a vote on the defense appropriation bill ahead of votes on domestic spending bills.

By "leapfrogging" the defense bill, he said he would make cuts in it quickly, "so as to prove the lack of any requirement for the kind of cuts being suggested in non-defense appropriations."

Presidential Veto Threatened

Senate action on the education budget bill must be completed by Nov. 20, when the continuing resolution is scheduled to expire. Even if the measure is passed before then, however, the budget level may not be permanent.

The President, who has repeatedly threatened to veto any appropriation bill larger than his budget proposal, is not expected to sign the education bill.

Should the November deadline pass without enactment of appropriations bills, Congress may be forced to extend its continuing resolution. Observers suggest the cuts sought by the Administration could then be achieved in several ways:

The President could propose a "supplemental appropriations and rescissions" bill, similar to the one he pushed through in fiscal 1981, that could include his latest proposed reductions.

The second concurrent budget resolution, on which Congress is required under the 1974 Congressional Budget Impoundment and Control Act to complete work sometime after Sept. 15, could include requirements that appropriations committees reduce spending in their funding bills.

David A. Stockman, director of the Office of Management and Budget, recently hinted at the latter option during testimony before the Senate Budget Committee.

"I believe we need a framework [for cuts] so Congress could work under some kind of common plan," he said. "Some mechanism, perhaps the second budget resolution, would provide a vehicle so all parts of the institution could move forward under the policy Congress chooses."

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