Budget negotiators should limit next year's deficit cuts to $50 billion to $60 billion, far less than the law requires, say top fiscal experts for Congress and the Bush administration. The advice, if followed, would make it easier _ and less politically painful _ for participants in the budget summit to reach a deficit-reduction deal for 1991. White House officials and congressional leaders met in the Capitol Thursday for their second round of talks on the $1.2 trillion budget for fiscal 1991, which begins Oct. 1. That spending plan will have to contain an enormous amount of taxes or spending cuts to meet the $64 billion deficit ceiling mandated by the Gramm-Rudman balanced budget law. At Thursday's session, negotiators did not agree on what size of budget-cutting package they need. ``It's bouncing all over the ballpark, $60 billion, $45 billion, $50 billion,'' said Senate Budget Committee Chairman James Sasser, D-Tenn. Their own analysts gave them wildly differing figures about the size of the looming shortfall. The non-partisan Congressional Budget Office said next year's budget gap looks like it will be $149 billion to $159 billion. That would mean savings _ either new taxes or spending slashes _ of $85 billion to $95 billion to shrink the shortfall to the Gramm-Rudman target of $64 billion. The White House's Office of Management and Budget projected a shortfall of $123 billion to $138 billion. That would necessitate $59 billion to $74 billion in cuts to hit the Gramm-Rudman ceiling. Neither set of figures includes the cost of rescuing the country's savings and loan institutions, a bailout that could cost the government tens of billions of dollars next year. Yet according to participants, CBO Director Robert Reischauer and OMB Director Richard Darman agreed that savings should be limited to $50 billion to $60 billion. The two budget experts said deficit cuts exceeding that amount could slow an already weak economy. Many economists worry that taking more than that amount away from consumers and government contractors _ in the form of higher taxes or spending cuts _ could prompt a recession. Some negotiators have said that loosening the deficit targets in the Gramm-Rudman law could be one way of keeping automatic cuts from taking effect. Darman also presented negotiators with examples of the spending cuts the Gramm-Rudman law would impose next year if Congress and President Bush fail to enact a deficit-reduction plan. The law would trigger enough cuts to reduce the deficit to $64 billion. According to the budget chief, $30 billion in Gramm-Rudman cuts would mean a 10.4 percent cut in domestic programs and a 7.6 percent reduction in defense spending. A $60 billion cutback would pare domestic programs by 22.2 percent and defense by 15.2 percent. In January, Bush released a proposed budget asserting that only $37 billion in savings would be needed to reach the Gramm-Rudman deficit target. The administration says that since that time, projected costs of aiding the savings and loan industry have grown, interest rates have jumped and tax collections have dropped. Democrats point out that CBO and many private economists have been expecting the higher deficit figures for months. The budget talks are expected to last weeks or months. Both sides are being cautious in suggesting how to cope with a problem that could mean unpopular tax increases or spending reductions in an election year.
