Bush Urged to Submit Budget : Wright Says Move Would Help Calm Market Jitters

WASHINGTON —  House Speaker Jim Wright (D-Tex.) today called on President-elect George Bush to reject the suggestions of some of his advisers and instead move quickly to submit his own budget plan to Congress as a way of calming jittery financial markets.

In making the suggestion, Wright joined a chorus of Democrats who have been turning up the pressure on Bush in recent days to spell out his own ideas for cutting the federal deficit by an estimated $35 billion in the next fiscal year.

Bush has been silent on the question of whether he will submit his own spending plan or go directly into negotiations with Congress over the 1990 budget.

Under law, President Reagan must submit a budget for 1990 by Jan. 9. Although Bush would have the option of submitting his own budget plan to Congress once he takes office Jan. 20, as Reagan did in 1981, some of Bush’s advisers have been urging the President-elect to skip this step.

Wright and other Democrats want to force Bush to be specific on how he would cut the deficit without raising taxes and still keep his other campaign promises to boost spending in such areas as education, day care and environmental cleanup.

‘Ample Opportunity’

“At the beginning of a new presidential term, we want very much to give the new President ample opportunity to address these problems in his own budget recommendations,” Wright said. “We trust that he will submit those recommendations no later than the middle of February so that our budget committees can consider them carefully.”

Wright’s comments were made before the National Economic Commission, a high-level advisory group created by Congress to draft a deficit-reduction plan.

Another speaker before the commission today, former Federal Reserve Board Chairman Paul A. Volcker, echoed warnings made two weeks ago by his successor, Alan Greenspan, that there is a growing urgency for the government to reduce the deficit.

Volcker said the risk of doing nothing would ultimately raise the danger of a “severe recession, spreading abroad and characterized by strong doubt about American leadership.”

Volcker said it is essential that spending on consumer goods slow and that business investments and exports rise.

“Reducing the budget deficit, by restraining expenditure, by raising taxes or by a combination of the two, acts directly to achieve that result,” he said.

‘God Bless You’

“If you can find it (reductions) on the spending side, God bless you,” Volcker said, provoking chuckles from attentive commission members in the crowded Senate hearing room.

Volcker said doing nothing is not an option. It would only make eventual adjustment the more painful because it would take place amid rising inflation and a declining value for the dollar, he said.

Volcker, the chairman of the New York-based James D. Wolfensohn investment banking firm, said he favors higher gasoline excise taxes to curb consumption spending.

He said that from an economic standpoint, however, there is no reason to expect that “grave damage would be done by raising taxes on, for instance, beer, liquor, cigarettes, cigars or gasoline” that have existed for years and have fallen in real terms when discounted for inflation.