WASHINGTON -- The Treasury announced yesterday that the budget deficit for fiscal 1992, which ended last month, was $290.2 billion, less than expected but still a record.
It was $20.7 billion above the 1991 record of $269.5 billion, but $109.5 billion less than the Bush administration's original budget estimate made in January.
"This is not news for celebration," said Stanley Collender, director of federal budget policy for Price Waterhouse in Washington, D.C.
The main reason the deficit was lower than originally projected was that Congress, afraid of voter reaction to more spending in an election year, failed to fund the latest phase in cleaning up insolvent savings and loan institutions. This wiped $77.5 billion off the 1992 deficit.
But the federal clean-up will still have to be funded, and this means that future deficits, starting as early as next year, will be larger. The Congressional Budget Office estimates the fiscal 1993 deficit will be $331 billion.
Carol Cox-Wait, director of the nonpartisan Committee for a Responsible Budget, said: "The lower deficit this year has its mirror image in higher deficits in future years. The longer you delay closing down these [savings and loan] institutions, the more it is going to cost to do the job."
The administration estimates the delay could cost almost $50 billion. Total government receipts for fiscal 1992 were $1,091.7 billion, $16 billion higher than the budget estimate. Outlays were $1,381.9 billion, $93.5 billion lower than the budget estimate.
The lower-than-projected deficit is unlikely to alter the dynamics of the election campaign. President Bush quickly seized on Tuesday's announcement of a surprising 2.7 percent annual growth rate in economic activity during the third quarter as evidence of a strengthening economy, but he will have more difficulty making campaign capital out of the reduced deficit figure.
Mark Desautels, spokesman for the non-partisan Congressional Budget Office, said: "No one is any wealthier or any better off because of it. It doesn't do anything for the economy. There is no good there. You have to pay for it."
Paul Leonard, senior analyst with the liberal Center on Budget and Policy Priorities, said: "It doesn't indicate any great progress on the deficit front in terms of changes in policy that have been enacted to really reduce the fundamental economic problem we face."
The next president and Congress will have to face the deficit and the S&L; problems next year, but the election year may have been different if Budget Director Richard G. Darman had foreseen the election-year reluctance of Congress to fund the S&L; clean-up and lowered his budget estimate of $400 billion.
"If he had projected $290 billion, would the Bush administration be in a better position right now?" asked Scott Hodge, federal budget affairs specialist with the conservative Heritage Foundation.
"I think the whole dynamic of the election would have been different," he said. "If I were advising Mr. Bush I would say slap Mr. Darman's wrist. Basically he sabotaged an entire year by presenting figures that were wildly overestimated and really set the tenor for the entire year. It brought [Ross] Perot out of the woodwork. The entire politics of this year would have been different."
Mr. Darman was not available for comment.
Mr. Perot entered the presidential campaign pledged to reduce the deficit, and has produced what economists credit as being the only realistic deficit-reduction program on the table. Mr. Bush and Gov. Bill Clinton have both recognized the importance of deficit-reduction but have emphasized growth as a prerequisite to bringing down the national debt.
One Capitol Hill economist said: "If anything, there is probably some sentiment to deferring, doing nothing, on the deficit and giving some stimulus to get the economy going again. Even if you don't want to make things worse, you might think that maybe this is not the best time in the world to start cutting, which has the consequence of dampening economic activity when economic activity has barely picked up as it is.
"You can see why an awful lot of people would put their emphasis on doing something in 1994, '95, and '96. I don't think we should expect much of a dent to be made in the fiscal 1993 deficit. It's already under way, after all."