Ecomony: White House Raises Estimate For '91 Deficit --- Darman Says Gap May Be As Much as $15 Billion More Than Anticipated
WASHINGTON -- The current economic slowdown will make the federal budget deficit for fiscal 1991 at least $6 billion bigger than the administration anticipated, and perhaps as much as $15 billion bigger, White House Budget Director Richard Darman said.</br></br>The larger the administration's deficit projections are, the more difficult it will be for Congress to avoid triggering across-the-board federal spending cuts, known as a sequester, under the Gramm-Rudman deficit-reduction law.</br></br>"We will eventually have bipartisan negotiations" with Congress on budget-cutting, Mr. Darman told reporters outside a congressional hearing room yesterday. "These are inescapable. If we don't, the sequester will be so large" that Congress will find it unacceptable.</br></br>"The real question is whether the negotiations are going to take place in an orderly, constructive manner or whether they are going to be done in a context of crisis," he said.</br></br>Mr. Darman told the Joint Economic Committee that even if the economy bounces back and performs in 1990 precisely as the Bush administration expects, the weakness in the fourth quarter means the deficit will be $6.4 billion bigger than projections. The Bush budget assumed the economy would grow at an inflation-adjusted annual rate of 1.5% in the fourth quarter; it grew only 0.9%, according to the latest Commerce Department estimates. Weaker growth reduces government tax receipts.