Washington -- As members of Congress and the Bush administration eye possible tax cuts to boost the economy, the Treasury Department is expected to announce a record federal budget deficit for fiscal year 1991, which ended Sept. 30.

Private economists estimate that the Treasury's monthly budget statement -- expected to come out today or tomorrow -- will show last year's budget gap swelled to between $270 billion and $275 billion. There is no doubt the final total will surpass by far the fiscal 1990 deficit of $220.4 billion, the current champion among annual deficits.

And another red ink champion is waiting on the sidelines to take the field. The Congressional Budget Office estimates that the deficit in fiscal 1992, which began Oct. 1, will total $362 billion -- or some $100 billion more than the Treasury is expected to report for fiscal 1991.

President Bush last week said he would be "enthusiastic" about tax cuts but does not want to break last year's budget agreement with Congress. But he also said the economy is sluggish, and bond market participants are widely skeptical that the White House and Congress can re-open budget negotiations without destroying the spending caps in last year's fiscal pact.

"I find the whole process disturbing," said Mickey Levy, chief economist for CRT Government Securities Inc. "The deficit no longer seems to be a deterrent to further action to widen it," he said.

Mr. Levy said proposals offered by some members of Congress to offset any tax cuts by additional reductions in defense spending amount to pre-spending savings that might not be there over the long term. Moreover, he warned, further fiscal stimulus undermines the ability of Federal Reserve Board Chairman Alan Greenspan to engineer more cuts in short-term interest rates to help nurse the economy.

Mr. Levy, who follows the federal budget closely as a member of the Shadow Open Market Committee -- a private group of economists who monitor the Fed -- said that despite the public image of President Bush as fiscally tight Republican, there has been a marked pick-up in outlays for space, drugs, energy, and some other nondefense programs. Other increases have been wracked up in the Bush years for Social Security and other entitlement programs.

The surging deficits since 1989 -- when President Bush took office -- have raised outstanding public debt from $2.2 trillion to about $3 trillion, an increase of 37%. The increase will bring the total federal debt load to 50% of total U.S. gross national product this year, up from 42.5% in 1989. Mr. Levy said.

Analysts point out that the recession and bank bailouts are driving up the deficit, in some ways making it seem worse than it is in reality.

Kathleen Stpehansen, a vice president of Donaldson, Lufkin & Jenrette Securities Corp., estimates that deposit insurance funding for savings and loan institutions and commercial banks taken over by the government will total $72 billion this year, up from $58.2 billion in fiscal 1991.

These outlays, Ms. Stephensen argues, are essentially a wash as far as the bond market is concerned because they simply represent a transfer of private credit to government accounts. There is no net additional demand for credit, and so there is no impact on interest rates. Other analysts agree.

The recession has cut federal tax receipts from individuals and corporations by some $60 billion and increased outlays -- largely unemployment benefits -- by about $5 billion, says Ms. Stephensen. Once the economy improves, this addition to the deficit should gradually disappear.

In the case of the Persian Gulf war, allied contributors enabled the United States to take in more than it spent in direct military outlays. Although some of the payments will pay for war-related bills that have to be paid in the future, Ms. Stephensen estimates direct military outlays totaled $25 billion while allied payments reached $42.9 billion.

In some ways, the budget is driven by factors that are largely beyond anyone's control. Through the first 11 months of fiscal 1991, interest payments on U.S. debt totaled $268.2 billion, or 22% of federal outlays.

Excluding deposit insurance outlays and interest payments, federal spending in fiscal 1991 exceeded revenues by about $80 billion. Mr. Levy says. The figure in considerably less than the total deficit the Treasury is expected to report.

Despite all the caveats and explanations, some analysts say there is a growing nervousness in the bond market that the numbers continue to go in the wrong direction, given all the talk about additional fiscal stimulus from tax cuts.

The Treasury yesterday estimated its net borrowing through the auction of bills, notes, and bonds in the fourth quarter will total $75.8 billion. Another $95 billion to $100 billion will be needed in the first quarter of next year, the department said.

Analysts said this demand for credit over the next six months could become burdensome to the bond market as the Treasury is forced to raise the size of its debt offerings. "The first quarter of 1992 will be when Treasury will get behind the eight ball," said Kevin Flanagan, vice president for Dean Witter Reynolds Inc.

"I think the size of the deficit is significant, and it very much limits the ability of fiscal policy to help out in this recession," said Kathryn Kobe, an economist with Joel Popkin & Co. "I don't think anyone is moving toward cutting the budget deficit, especially in an election year."

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