The Federal Deficit; Congress readies its scissors and gluepot
Washington — President Reagan's nearly $1 trillion spending plan created few shocks as it landed on Capitol Hill. Long ago the lawmakers had braced for gloomy deficit forecasts. They have become accustomed to the Reagan priorities - more cuts in aid to the poor amid an historic jump in defense spending and a plan to spend $6.7 billion in 1985 toward building an orbiting space station.
Senate majority leader Howard H. Baker Jr. (R) of Tennessee yesterday predicted the budget would be ''hotly debated.'' But the outlook so far is that the debate will be muted compared with previous years.
''Everybody recognizes that this is sort of a holding year,'' says Sen. Lawton Chiles of Florida, ranking Democrat on the Senate Budget Committee, of the election-year budget.
One example is the low-keyed response to Reagan's request for $305 billion for the Pentagon budget, a leap of 13 percent after discounting inflation. A year ago, a similar administrative request touched off a bitter battle between the White House and GOP congressional leaders that resulted in Congress voting only a 5 percent boost for defense.
This year Republicans seem to be unruffled by the huge defense request. ''I don't think that defense is going to be the stumbling block on the budget this year,'' says an aide to a Senate Republican leader. The Reagan administration will be more flexible this time, the aide predicts. ''I think you're going to see a lower defense number (than the one submitted).''
As one measure of the lack of support for a $305 billion Pentagon budget, even staunch conservative Rep. Henry J. Hyde (R) of Illinois says, ''My gut reaction is it is too much. They're coming in too high and expecting to get cut.''
Meanwhile, Reagan has proposed a series of domestic spending reductions - ranging from a cap in medicare costs to $500 million savings in food stamps - that have little chance of passage.
This week Senate Budget Committee chairman Pete V. Domenici (R) of New Mexico said flatly, ''There will be no drastic entitlement cuts in the budget.'' That prediction probably holds true for most of the $9.5 billion in domestic spending cuts outlined in the President's budget.
The medicare proposal is ''not likely to be passed,'' says Rep. Barber B. Conable Jr. of New York, ranking Republican on the House Ways and Means Committee. ''Nobody is for it except the administration.''
Overall, there are fewer cries of outrage this year, because the Reagan budget for '85 has fewer drastic cuts. In some areas, such as the Environmental Protection Agency, the administration includes modest increases.
''They're not proposing Draconian cuts,'' says Senator Chiles, predicting that congressional consideration of domestic spending ''will be more routine this time.''
The biggest question mark over the budget process is whether Congress will begin to take whacks at the deficit, which is expected to be close to $200 billion in 1985. President Reagan's budget provides few concrete solutions and only a modest $8 billion tax increase, accomplished mainly by closing loopholes.
''It avoided the hard decisions,'' says House Budget Committee chairman James R. Jones (D) of Oklahoma in assessing the Reagan spending and taxing plan.
Instead, all hopes for reducing the deficit rest on a ''bipartisan panel'' proposed by Mr. Reagan in his State of the Union speech last month. The panel has gotten off to a shaky start. As of this writing, no date has been set for the first meeting, and both parties remain leery of political booby traps during the election year.
House Speaker Thomas P. O'Neill Jr. (D) of Massachusetts has repeatedly said he fears being ''hoodwinked'' by an administration that is trying to spread the blame for deficits. Moreover, Democrats are gearing up to make the Reagan deficits a major plank in the campaigns.
But a few on Capitol Hill are holding out hope for joint action to confront the deficit problem. ''Neither the President nor the Speaker wanted a bipartisan summit,'' says Representative Jones. ''But the fact that both of them have their toes in the water means we've got to try to get them both to swim with us.''
''I think you have to go into this to try to see whether they mean it or not, '' says Senator Chiles. He has left an open door for the bipartisan group, which is to include House and Senate members from both parties and a top White House official. However, he predicts the panel will make no major structural changes to cut deficits.
''It's possible to do something this year,'' said Representative Conable. But he charged that Democrats want to exploit the deficit as a political issue first. Meanwhile, he sees the bipartisan group as ''preparing people for necessary changes'' that might not come until after the November elections.
''Candidates don't normally say, 'Elect me, and I'll dump on you,' '' Conable added. It becomes even more difficult to make spending cuts or tax increases at a time when ''the average American is quite well-satisfied'' with the economy, the New York Republican said.
But he warned that the deficits will damage the economy and that 1985 will bring a ''coincidence'' of good political timing - after elections - and a crisis in the economy, forcing politicians to act.
Meanwhile, he said, ''It's unlikely that Congress will go out on any fiscal limbs.''