Bush Orders Agencies to Trim Spending Plans

KENNEBUNKPORT, Me. — The White House on Saturday ordered the government to prepare for drastic program cutbacks beginning Oct. 15 in the event that efforts to reach a budget compromise fail.

In an order issued at President Bush’s vacation home here, the President told all federal agencies to sharply cut back on their spending beginning Oct. 1, pending further notice.

Administration and congressional leaders are seeking to assemble a package of roughly $50 billion in deficit-reduction measures, including both spending cuts and new tax revenues.

But progress has come slowly. While Republicans privately offered a plan earlier this month, the Democrats have yet to make a counterproposal.

Under the Gramm-Rudman balanced-budget law, a failure to reach an agreement by Oct. 1 will trigger across-the-board cuts in most federal programs totaling more than $100 billion. These would take effect Oct. 15.

Budget negotiators have set a self-imposed Sept. 10 deadline for reaching a compromise, and they plan to meet Sept. 6-7 at Andrews Air Force Base in Maryland to get down to work.

Once an agreement between congressional leaders and the White House is concluded, it must then be approved by both the House and Senate and signed into law by the President.

If an agreement is not reached by Sept. 7, the negotiators have said they probably will work through the weekend in an effort to settle remaining differences.

Under the presidential order issued Saturday, which was labeled an “initial order,” beginning Oct. 1 all agencies would have to trim their actual spending enough to achieve more than $100 billion in savings government-wide over the next 12 months.

No new spending commitments, direct loans or loan guarantees could be made, and loans already approved would have to be scaled back.