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University Daily Kansan / Thursday, November 21, 1991
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Yeltsin's Russian Federation refuses to support Gorbachev's budget plan
The Associated Press
MOSCOW — President Mikhail Gor bachev asked the national legislature yesterday to approve an emergency budget that calls for a big deficit to keep the central government afloat until Jan. 1. But Russia refused to go along with the plan.
Without the cooperation of Boris Yeltsim's Russian Federation, which is the largest and most powerful budget proposal has little chance of success and Gorbachev's government may face economic strangleulation.
"Russia won't play this game of printing endless amounts of money to cover deficits," Russian lawmaker Yuri Chenichinko said. "Russia is saying, 'Let's hurry up and create a hard currency.'"
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The emergency budget would be financed by increasing the national debt and by printing more rubles, said the government already had put
12 times more rubles into the money supply this year than originally planned.
Russia's main objection was that Yeltsin has his own economic program that conflicts with the central government's plans, said Ivan Silayev, head of the Inter-Republic Economic Committee, which is coordinating economic reforms.
Yeltsin previously shut off Russia's financing for about 80 central government ministries, forcing many to close and others to cut their staffs. He also claimed control over all exports of Russian oil, natural gas, gold and diamonds, which are the Kremlin's main source of foreign currency.
The new budget calls for a slightly higher deficit than the previous spending plan, which was scrapped after the August coup attempt.
Gorbachev backed his budget request with a long list of gloomy economic projections and a warning that "catastrophe awaits us" unless the
Soviet republics preserve a strong union.
Under the new Union Treaty tentatively reached by Gorbachev and seven republic leaders last week, the central government would continue to exist but its role would be limited mainly to defense and foreign relations. The country would be renamed the Union of Sovereign States to emphasize the transfer of power to the republics.
Central government revenues for 1991 are expected to be just 113 billion rubles, less than half the original projection of 250 billion rubles, Silayev said. He attributed the shortfall to the reduction in output, lower than anticipated taxes and the unwillingness of the republics to finance the central government.
Gorbachev's budget calls for a deficit of more than 100 billion rubles for the final three months of this year. The deficit will be centially inflated official exchange rates.
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