Sasser Urges Bush to Act on Deficit Now : Senator Calls for Meeting With Lawmakers Before Inauguration

WASHINGTON — Sen. Jim Sasser (D-Tenn.), a key member of the Senate Budget Committee, said Saturday that President-elect George Bush should meet with the leaders of Congress before he is inaugurated to demonstrate a serious intention to reduce the budget deficit.

The falling dollar and shaky stock market make rapid action imperative, Sasser said in the Democratic response to President Reagan’s weekly radio address.

“The message from London, Tokyo and other financial centers is clear--the day of rhetoric and empty phrases is long past,” he said.

Reagan Upbeat on Outlook

Reagan, on the other hand, was more upbeat about the economic outlook, saying: “Almost every American industry is zipping along at near full capacity.”

The President emphasized the new-found strength of America’s manufacturing companies.

“After almost a decade of hard, often painful work cultivating our industrial fields to meet a whole new generation of world competition, this year we can see the first harvest of that work,” the President said in his pre-Thanksgiving address.

“A few years ago, journalists were calling the Midwest the rust belt,” Reagan said. “Now the boom belt would be more like it.”

The economy has grown by 425,000 manufacturing jobs in the last year, “and when it comes to “world competition, no one can stop us now . . . . “ Reagan said. “In this age of high-technology factories, highly paid skilled workers produce so efficiently that no one can touch them.”

Sasser Issues Warning

Reagan’s optimism was in stark contrast to the sober warning from Sasser, who declared that the country faces unpalatable choices. “Either we get on with the business of serious deficit reduction or else the Federal Reserve Board will ratchet up interest rates and possibly induce a recession,” he said.

The White House and Congress must cooperate despite their different approaches to deficit reduction, Sasser said.

He urged Bush to:

--”Give a fair hearing” to the National Economic Commission, which is trying to hammer out a consensus program to cut the deficit.

--Meet before Inauguration Day, Jan. 20, with the congressional leadership to “aim at getting to a common ground, the objectives we all share in bringing the deficit down.” Bush has said he is willing to meet with individual members of Congress, but he has ruled out any “summit” meeting with congressional leaders before he takes office next year.

--Persuade Reagan to offer a “realistic” budget to Congress in January, “not a scorched earth budget that does away with needed domestic programs and certainly not a document that makes a shrill political statement, but is dead on arrival in the halls of Congress.”

Sasser said that Congress and the President-elect have been put “on notice,” by the financial markets and the Federal Reserve. The falling dollar, the drop in stock prices, the potential of higher interest rates--”those are the clearest possible indications that we must act and act now,” he said.

“As Alan Greenspan, the chairman of the Federal Reserve, made clear, the world isn’t waiting to see what kind of plan we’re going to use to get the deficits down, it’s waiting to see if there is any plan at all,” the Tennessee senator said.

Cites 1987 Budget Accord

“We all know it took a financial disaster of immense proportions to end the political posturing of nearly eight years,” Sasser said, referring to the October, 1987, stock market crash. The bipartisan budget deal put together by Reagan and Congress last year, after the crash, cut the deficit by $76 billion over two years, he recalled.

“I know that I speak for many of my colleagues in the Congress when I say that we want to work with the President-elect towards the same positive result,” Sasser said, “but we can’t wait for the next financial disaster before we again take the budget deficit seriously.”

Referring to Bush’s campaign vow against any tax increase, Sasser said: “Many of us in this Congress are very experienced lip readers indeed. We don’t want new taxes anymore than you do. We stand ready, though, to follow the President’s lead so long as that leadership aims honestly and forthrightly at solving this nation’s No. 1 economic problem.”