Lobbyists target areas to cut in federal budget

While the White House still puzzles over major decisions for the 1984 federal budget, the growing corps of Washington budget watchers already knows what it wants.

From business to labor to the National League of Cities, lobbying groups are preparing major efforts to protect their interests. Virtually all are hoping for major reductions in the defense buildup, and some say the $8 billion cut the President has proposed is not deep enough.

In interviews, a sample of lobbyists also agreed that spending for domestic programs has shrunk about as much as possible. But they disagreed on how the government can curb the expected $200 billion plus in deficits.

''We support an across-the-board freeze in federal spending,'' says James A. Clifton, federal budget policy director for the US Chamber of Commerce, who calls the prospects of $200 billion in red ink ''very scary.''

Backing an idea proposed by some members of Congress, the chamber wants the federal government to freeze all government benefits, including social security, for one year at current levels. Only the elderly poor would receive cost-of-living raises.

Second on the chamber's ''hit list'' for reductions is the Defense Department. ''All we're talking about is a cap on the rate of increase,'' Dr. Clifton says.

The Chamber of Commerce, which in past years led the charge for reducing the size of government, is again studying federal programs for more cuts. But Clifton concedes that those will be ''very difficult'' to make, especially with the recession. Instead, he is focusing on defense and ''entitlement'' programs, such as social security, which make up about three-fourths of total federal spending.

''We're going to be more assertive this year than we were last year,'' Clifton says. ''Collectively the business community is probably going to have to take the lead.''

Both the chamber and another major business group, the National Association of Manufacturers (NAM), will look for ways to reduce deficits without raising taxes.

''We're very concerned about tax increases,'' says Janis E. Moore, fiscal policy director for NAM. Like other groups, NAM began taking note of the budget a few years ago and now plays a major role in lobbying Congress. Lawmakers listen, Ms. Moore says, because ''if plants are closing in your district, you're going to listen to the owners.''

''My personal opinion is that domestic programs were getting down to the bone ,'' says the NAM spokeswoman. Instead, her association is focusing on trimming entitlements and defense to cut deficits.

Even the defense industry sees the writing on the wall. Lobbyist Jack Cove concedes that the weapons buildup is too fast. ''There are enough people in industry who think it should be cut,'' he says. ''I'm telling (client companies) that cuts are coming and we better protect our programs.''

He says that a small army of lobbyists will try to save various weapons systems. Mr. Cove predicts Congress will cut much more than the $8 billion proposed this week.

Finding places to trim the military budget is not easy, even for the AFL-CIO, which a year ago set up a commission to study defense spending. The labor group still has made no public proposals. ''They found it is vastly more complicated (than they expected),'' says Peggy Taylor, a budget lobbyist for the AFL-CIO.

Top priority for the labor union is ''job creation, training, retraining, and unemployment benefits extension,'' she says. The union would accept a tax increase to help pay for those things. It is proposing to limit the 10 percent income tax break of next July to low- and middle-income persons.

The AFL-CIO is also monitoring efforts to curb federal medical costs, which are among the fastest growing itemsUFquoteStates, already left with a bigger tab after federal cutbacks, will push hard to protect themselves from more losses.

in the budget. The union opposes requiring medicaid and medicare recipients to pay a bigger share. ''We are concerned they will ask recipients to pay for the inefficiencies of the health care system,'' says the labor union lobbyist.

States, already left with a bigger tab after federal cutbacks, will push hard to protect themselves from more losses. The National Conference of State Legislatures is calling for ''protection of the truly needy'' by full funding of welfare, medicaid, and food stamps. For the first time, the state lobbying group is balking at the defense buildup and rejecting a freeze on domestic ''discretionary'' programs.

''We cannot take any more cuts,'' says Mary Jane Gallagher of the state legislative association. Some 30 to 40 states might raise taxes this year to make up for revenues lost in the recession and by federal cutbacks, she says.

At the National League of Cities, chief lobbyist George Gross holds that the most important urban programs, from revenue sharing to community grants and job training, will probably be spared from the budget saw this year.

The biggest problem will be federal housing. ''That area is really a disaster. The cost is fierce,'' he says, adding, ''We'll be lucky to hold our own.''