Budgetary Steps to a `New Domestic Order'

WHILE federal spending is broken down into three categories - domestic, defense, and international - the White House Office of Management and Budget presented 1992's budget highlights in purely domestic terms. Below are some of what the administration calls ``reformist steps - toward a new domestic order.''

They reflect the administration's desire to show the Democratic Congress that it is concerned about domestic needs. Some of the highlights:

Education reform: increased investment in child care, including almost $10 billion in tax credits; $2.1 billion for Head Start; $6.4 billion for compensatory education; and $1.9 billion in mathematics and science education.

Research and development (R&D): permanent tax credit to encourage more private R&D; $76 billion federal investment in R&D, up $8.4 billion to the highest level ever.

Financial-sector reform: reform of deposit insurance and the banking sector.

Savings and investment incentives: designed to encourage family savings, home-ownership, long-term investment, and enterprise zones.

Entitlement reform: reduction of Medicare subsidies for individuals earning more than $125,000 per year, and other mandatory entitlement reductions for those who are less needy.

Health-care system reform: more than $25 billion in savings over the next five years with reduced payments to doctors and hospitals.

War on drugs: federal investment in combatting abuse increases from $1.1 billion to $11.7 billion.

Housing reform: includes $2.1 billion for tenant management and ownership.

Transportation: includes $16 billion for the Highway Trust Fund.

Federal-to-state shift: $15 billion in federal funds to be administered by the states.