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Key Parts Of Zero-deficit Plan

December 07, 1985

These are the crucial features of the balanced-budget plan agreed upon Friday by key House and Senate negotiators:

--Deficit ceilings would be set at $171.9 billion for the current fiscal year; $144 billion for fiscal 1987, which begins next Oct. 1; $108 billion for fiscal 1988; $72 billion for fiscal 1989; $36 billion for fiscal 1990; and zero for fiscal 1991.

--If Congress failed to adopt a budget that meets the deficit target for any year, a schedule of wide-ranging spending cuts would automatically go into effect.

--The automatic spending cuts would fall equally on defense and non-defense programs.

--On the non-defense side, Social Security, certain benefit programs for the poor (including Aid to Families with Dependent Children, Medicaid and food stamps) and veterans' compensation and pensions would be exempt.

--In addition, Medicare and other health programs could be cut by no more than 1% in fiscal 1986 and 2% in future years from projected spending levels.

--Automatic spending cuts for the current fiscal year could take effect next March 1, but they could not exceed $12 billion even if that left the deficit greater than the $171.9-billion target.

--The automatic cuts could be waived if war broke out or if economic growth fell to 1% or less during two consecutive quarters.

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