Now the hard part: budget, tax-cutters tackle the specifics

While President Reagan pressed Democratic leaders to meet his terms on taxes -- inviting them down to his end of Pennsylvania Avenue for a White House chat -- the rest of Congress turned to the budget chore he had already given it.

The Democrats turned down a White House-sponsored tax compromise June 1, calling it a "windfall for the rich." The presidential- congressional "tax summit" ended in a standoff, both sides agreed: the President insisting on an across-the-board, three-year series of cuts, the Democrats insisting on a year-by-year approach.

The Democrats said they would still try to pass a tax bill by Aug. 1, as promised. But they warned the Reagan package would leave gaping deficits, forcing the administration to doomed later attempts to cut basic entitlement programs, like social security, or "to meat ax" other federal programs.

Meanwhile, the Congress that bit the bullet so decisively on Mr. Reagan's budget-cutting demand will find it tough chewing the next few weeks, as it attempts to make the $695 billion budget ceiling a reality.

It will be hard work reducing the Carter administration's fiscal 1982 budget by $35 billion. Congress won't have the drama and glare of national attention prodding it along, as it had a month ago in passing the budget bill.

The budget process will "unfold less like a family reunion than a divorce court," says David Stockman, director of the Office of Management and Budget and chief architect of the Reagan budget offensive. Mr. Stockman warned of difficult decisions to be faced on virtually all areas of federal spending in the weeks ahead.

Historically, Congress's efforts to make its so-called "budget reconciliation" process succeed could have vast importance for the evolution of that branch of government.

Stockman refers to the Budget Control Act passed in the 1970s as the "constitution" of the modern budget process -- a way to compress into a few months in the spring a budget exercise that Congress usually dallies with well into the fall and sometimes fails to finish altogether. Congress made its first try at matching or "reconciling" outlays with receipts during President Carter's last year, trimming a more modest $8.3 billion.

While Reagan was giving the Democratic congressmen the word on taxes, Stockman was outlining the White House political strategy on the budget.

The White House wants an up-and-down vote (i.e., without amendments) on the budget when it reaches the House and Senate floors by, it is hoped, July 15. It wants the 14 Senate authorizing committees, and the 15 in the House, to stick to the subtotals in the first budget bill passed May 7. The White House will tolerate some shifts in spending.

What the White House does not want, Stockman says, is a rules decision in the House that would allow the full membership to vote on separate spending items. There will have to be a heavy reliance on informal discussions among party leaders to avoid "chewing up possibly weeks and months" in arguing about details , Stockman warns.

The President will resist any effort by Speaker of the House Thomas P. O'Neill Jr. (D) of Massachusetts or others to "bust the budget," Stockman said.

Speaker O'Neill has talked for weeks of offering amendments on the House floor that would restore social or other programs savaged by the Reagan budget.

"If you break it down into 12, 15, or 20 votes, that's no longer reconciliation," Stockman argues, making the administration's case for an up-and-down vote rule on the second budget bill in mid-July.

Stockman concedes there is no automatic step for getting from the first budget vote of May 7, which set broad outlines for the 1982 budget, to the next budget vote, which sets out the cuts in legislative detail.The administration will have to watch Congress's actions. "No parliamentary at is self-acting," Stockman says.

The Democrats are divided on their strategy. While O'Neill advocates budget busting, House Budget Committee chairman James Jones (D) of Oklahoma just as strongly contends the spending targets should be treated as binding. Educational spending, school lunch programs, and loans for college students are among areas the Democrats might try to get separate floor votes to embarass the Republicans.

The nation's governors and mayors also have a keen interest in the budget steps in the weeks ahead. Reagan met with a group of them in the White House June 1 after his parley with Democratic leaders on tax legislation.

The state and city executives worry about the fate of block-grant legislation in the budget. The administration has proposed cutting 88 categorical grant programs -- such as medicaid, food stamps, school impact aid -- by 25 percent, and combining them into six block grants.

Many of the programs are highly complex, with changes in one possibly affecting some of the others. If the funding levels are cut, but the states are still held accountable for specific spending, the states will either have to raise taxes or try to get cities to assume more of the load.

"The degree of opposition to block grants has been overstated," Stockman asserts. Congress has time enough to pass the legislation setting up the six block grants by summer, or it could go ahead and put separate caps on the 88 programs, deferring block grant legislation until later, he says.

Many neutral congressional experts, however, see the reconciliation process as less tidy in dealing with complex legislation like the categorical grants. Many program cuts or changes made in haste in the next few weeks will have to be reconsidered later as th eir effects become known, they say.

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