Word: grammes
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...Jones budget. But Republican Jeffords ruined the maneuver. He announced that he liked the Obey package and would vote for it. Knowing that it would fail, he would then vote for the Reagan-endorsed substitute, a "bipartisan" proposal sponsored by Republican Delbert Latta of Ohio and conservative Democrat Phil Gramm of Texas...
Confused? So are many of the Congressmen preparing to choose this week between the Administration-backed Gramm-Latta resolution and the opposing measure crafted by James Jones, the Oklahoma Democrat who heads the House Budget Committee. The root of the problem is that anyone attempting to gauge the effect of proposed spending and tax cuts has to make a stab at forecasting what inflation, unemployment and interest rates are likely to be. A one-point rise in the jobless rate, for example, adds $30 billion to the federal deficit by increasing expenditures for unemployment compensation, welfare and the like...
Thus, the Administration predicts-and the Gramm-Latta proposal assumes -7.2% inflation next year, an interest rate of 8.9% on short-term treasury bills, and a 7% unemployment rate in the fourth quarter of 1982. The Democrats' figures are 9.9% inflation, 12% interest and 7.4% unemployment...
Spending under Gramm-Latta, which cuts social programs and increases military outlays about as much as Reagan wants, would be $689 billion under the Administration's assumptions, $710 billion if the Democrats' numbers are believed. Outlays under the Jones measure, which gives more money to social programs and less to defense, would be either $692 billion or $713.6 billion...
...differences in deficit estimates are crucial, because they sway judgments on how big a tax cut the nation can afford. The Administration and backers of the Gramm-Latta resolution, which includes the first stage of Reagan's cherished proposal to slash income tax rates 30% over three years, predict a deficit of $31.4 billion in fiscal 1982. No, says Jones, the red-ink figure would be $42.6 billion-whereas, under the Democrats' proposal for a more modest tax cut, the deficit would be held to $24.7 billion...