Nation: Carter's Cutters vs. the Bulge

Largely out of sight, deep in the labyrinth of the federal bureaucracy, Jimmy Carter is preparing for what may be the biggest battle of his presidency. As a keystone of his anti-inflation campaign, he has vowed to limit the red ink in the 1980 budget, which takes effect next October, to less than $30 billion. That will mean chopping as much as $18 billion out of the normal spending for programs that many people have come to take for granted. So department by department, determined Administration budget cutters are now looking everywhere for places to slash, and they are finding the slashing hard. Says an Office of Management and Budget senior official: "This has got to be one of the toughest budgets in the past 20 years."

Carter's political future largely depends on his success in curbing federal spending and the inflation it breeds. Says Federal Reserve Board Chairman G. William Miller: "The best proof of his commitment [to trimming the budget] is that he can't get re-elected unless he deals with inflation." But if Carter cuts too sharply he will alienate many of the groups—liberals, minorities, labor—who supported him in '76. Senator Ted Kennedy, a potential Carter rival in 1980, has already threatened to fight any reductions in health appropriations. Anticipating an intraparty battle ahead, a Kennedy staffer warns: "There's going to be a lot of blood on the floor."

Domestic programs will bear almost the full brunt of the cuts. The U.S. took the lead last year in persuading NATO nations to increase defense spending by 3% a year in real terms. Carter will have a hard time going back on that pledge. To honor it, he will have to raise the Pentagon budget from $114.5 billion to about $126 billion in the 1980 budget. OMB Director James Mclntyre and other advisers are arguing for a smaller increase. But if Carter goes along with their pleadings, he will further erode the confidence of U.S. allies who are worried about American resolution. He will also make it harder to pass a SALT II treaty since members of Congress will not vote for it if they fear any weakening of U.S. defense.

Under presidential orders to cut wherever they can, federal agencies have submitted budget proposals to OMB, which is reducing them further and returning the trimmed versions this week. Then the various agencies will start making their appeals to restore funds that have been lopped off. Carter insists he will back up his budget cutters. At a mid-November meeting of subcabinet officers and other top civil servants, he emphasized that his anti-inflation campaign would require sacrifices "from everyone." Noting that all sorts of interest groups "will make their voices heard," he warned: "You will be tempted to be a spokesman for those you serve. I would like you to avoid that as much as possible and to put yourself in my position."