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ADMINISTRATION BOOSTS ESTIMATE OF ’91 DEFICIT TO $168.8 BILLION

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The Bush administration Monday dramatically boosted its official estimate of the fiscal 1991 budget deficit to $168.8 billion, two-thirds higher than its forecast just six months ago.

The increase could force automatic spending cuts of more than $100 billion if Congress and the administration don't agree on a package of spending reductions and tax increases.Monday's estimate did not even include the costs of bailing out the savings and loan industry. When those costs are included, the deficit for the fiscal year that begins Oct. 1 climbs to $231.4 billion, the White House said in its official mid-session review of the budget.

The administration's new forecast is far higher than the $100.5 billion deficit estimate included in the president's budget when it was released last January.

It is also significantly higher than the $64 billion deficit target set by the Gramm-Rudman balanced budget law.

If Congress is unable to reduce the deficit to within $10 billion of the $64 billion, it triggers across-the-board spending cuts.

Along with its new deficit estimate, the administration included dire warnings of what could happen if the current budget negotiations between Congress and the administration fail and the across-the-board cuts are triggered.

White House Budget Director Richard Darman called across-the-board cuts of more than $100 billion unprecedented in their magnitude and "highly disruptive" to a host of government programs.

Darman said such a reduction would require a 38.4 percent in non-defense spending and cuts of between 25.1 percent and 43.3 percent in military programs. Social Security and some other entitlement programs are exempt from Gramm-Rudman cuts, forcing even sharper reductions in other programs.

Darman said that the Gramm-Rudman cuts would force major cutbacks in air traffic control operations, increasing delays for air passengers by 400 percent to 600 percent. The cuts would also require a 40 percent cut in the Head Start program affecting 200,000 4-year-olds and sharply curtailing other government programs ranging from poultry and meat inspections to cleanup of Superfund toxic waste sites.

"If the summit negotiation fails these effects are exactly what we will face in the fall," Darman told a crowded news conference.