If budget battle comes, it'll be in summer, in House

Congressional Democrats face their hardest problem in 20 years. Along with the great body of the nation, they believe the budget is too big and want federal expenditures cut back -- but the bulk of increases since the New Deal is in Democratic-inspired services and agencies. Now they must trim their own creations.

Democrats on the Senate Budget Committee denounced individual cuts in a $36.4 billion package of economies last week but ended up unanimously supporting them, plus an additional $2.3 billion that President Reagan hadn't asked for.

"We have undone 30 years of social legislation in three days," moaned Sen. Daniel P. Moynihan (D) of New York, but he voted for the cuts.

The real struggle, it is believed, will come later: The Senate is dominated by Republicans; the House of Democrats. The process of compromising differences and grudgingly accepting cuts will occur sometime this summer.

Against the expenditure cuts will be weighed a hotly debated Reagan administration proposal to cut income taxes across the board, 10 percent a year for each of three years.

In the House, a group of "Reagan Democrats" has appeared that could throw victory to the administration. They are mostly the 44 members of the Conservative Democratic Forum, largely from Southern and Western states. Led by Rep. Charles W. Stenholm of Texas, they are reminiscent of the "Dixiecrat" coalition of Republicans and conservative Southern Democrats that gave President Truman fits in the late 1940s and early '50s.

The forum could make an awkward problem for the Democratic Speaker of the House, Rep. Thomas P. O'Neill Jr. of Massachusetts. They breakfasted with the President a fortnight ago, telling him they favored $11 billion more in cuts than the $48 billion he proposed. "You've made my day!" Mr. Reagan exclaimed.

Formal liaison has been extablished by the group with Rep. Thomas G. Loeffler (R) of Texas.

Virtually everybody in Congress now suddenly agrees that government expenditure is out of hand, that inflation has followed deficits, and that the 1980 election expressed public dissatisfaction.

But there is a great area of disagreement over who will allocate the cuts and how they will be applied. Federal legal aid for the poor, for example, is supported by the American Bar Association, and it is charged that the proposed cut in the appropriation for that service weighs against the poor.

The whole budget debate is, in many instances, becoming a poor-rich battle. David Stockman, who as director of the Office of Management and Budget has become the chief White House spokesman in the debate, was asked on a TV show if legal aid had not become an accepted service for the poor -- an "entitlement."

"I don't believe that there is any entitlement -- any basic rights to legal services or any other kinds of services," he replied, in a blanket dismissal of the argument.

Many think the shape of politics for years to come is forming in the debate here. Democrats are getting small victories in the clashes. They argue that the administration budget was put together hurriedly and must be restudied. Economic assumptions advanced last week by the bipartisan Congressional Budget Office supported this: They projected federal spending for fiscal 1982 at $25 billion above the White House estimate. Reagan called the survey "phony" (later changed to "wrong"). A series of middle-road economic forecasting groups has also found some Reagan estimates overoptimistic.

The first package of budget cuts reaches the Senate floor this week following a dramatic three-day consideration by the Budget Committee. Budget director Stockman, who amazed many by the speed with which he whipped figures together, told that House Budget Committee chairman Rep. James R. Jones (D) of Oklahoma expects only 75 percent of the Reagan program to pass, said that that would not be acceptable. To achieve the $45 billion target on the deficit for the next fiscal year, Stockman said, "We're going to need $40 billionin cuts."

He added that he already is looking for new places to cut in years ahead.

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