This article is the last in a three-part series examining the transition to the Bush presidency.

The six U.S. senators and representatives attending Tuesday's Joint Committee hearing on the 1989 economic outlook hardly looked surprised when Federal Reserve head Alan Greenspan told them he thought President Bush's economic forecast was too optimistic.

After all, Greenspan--who controls the nation's money supply--is one of many Washington insiders who support Bush's economic goals, but express doubt about the president's ability to deliver on his campaign promises.

With the election and its rhetoric fading into history, conservatives and liberals on both the Charles and the Potomac say Bush will be hard pressed to sustain current economic growth while staying off inflation and recession.

Specifically, insiders doubt the president's ability to bring down the $155 billion deficit--a hand-me-down from the Reagan era--without raising taxes or making massive social spending cuts, as he has promised. Even many staunch Republicans say Bush's spending plan will not be enough to keep the federal government out of the red.

While many experts say the deficit spending of the Reagan era has helped fuel a six-year recovery, those experts believe it will lead to future economic instability. Experts also say that the budget deficit has contributed to a deepening trade deficit, which threatens American industrial competitiveness abroad.

Largely because of these concerns, the Bush team has pegged deficit reduction as its numberone economic priority from the first days of the presidential campaign. New administration appointees like Associate Professor of Economics Lawrence B. Lindsey say a so-called "flexible freeze" can balance the budget in five to six years.

With proponents from the not-so-liberal boutique of the Harvard Economics Department, the flexible freeze would allow total federal spending to increase at the same rate as inflation. Revenue increases from expected economic growth over the next five years, Lindsey and other Bush economists say, will meet expenditures by 1992, thus balancing the budget.

But while Bush has promised a balanced budget, he also told voters last year he wanted to be the "education" president, and has hinted at more spending for child care programs and other new federal policies. Under a flexible freeze, Bush would have to cut equal amounts of spending in other areas to keep total spending frozen at inflationary levels.

"You set a goal that overall spending not surpass the inflationary rate," explains Rep. Willis D. Gradison Jr. (R-Ohio). "Then you go back and say some programs are going to be above the line and some are going to be below the line."

The problem for Bush, observers say, is that the promises he made in the campaign mean tough cuts for other programs. Already, he has pledged not to touch Social Security, and has suggested he would not cut Medicare. Moreover, while Bush has said he would trim the defense budget, he has said he would limit it only to the level of inflation.

These constraints, say experts like Susan Irving, a Kennedy School of Government lecturer, mean Bush must cut other programs drastically if he wants to meet the balanced budget goals required by the 1985 Gramm-Rudman-Hollings Act.

"You can get through this year and meet Gramm-Rudman-Hollings without a tax increase, but you can't get through the next four years," says Irving, who served in the Carter Administration. "What the numbers hide are some tough policy choices."

Bush supporters, including Rep. Fred Grandy '70 (R-Iowa), say they also foresee difficult choices, adding that they do not know where the axe is going to fall.

"A flexible freeze program means somebody's ox is going to get gored," says Grandy. "People are saying we can't freeze entitlements and we can't touch Medicare, and we certainly can't touch Social Security. That's probably true. But the bottom line is the lion's share of our government spending goes to those benefits, and unless they address them some way, it's going to be damn difficult to balance a budget on remaining expenditures, including defense."