Facing the facts on the budget

After weeks of public posturing ending in deadlock, a mood of realism has overtaken the leading players in the federal budget debate. With about two weeks of negotiating time before Congress leaves for the summer, the principals have faced the facts: Deeper cuts will have to be made in already-squeezed domestic programs if the deficit is to be greatly reduced.

President Reagan and the GOP Senate have conceded that the Democratic House would not accept any reduction in social security cost-of-living adjustments (COLAs). Meeting with the President Wednesday, House and Senate budget conferees set a ``framework'' that excludes any cuts in federal pensions.

Meanwhile, House leaders moved closer to Mr. Reagan's higher figure for defense-spending authority, which would permit the Pentagon to make commitments for future spending.

All sides acknowledge the budget would include no taxes to reduce federal red ink. ``There was a real flash of anger in the President'' when taxes were mentioned, Rep. W. Henson Moore (R) of Louisiana said after the White House meeting.

With these ``big ticket'' items off limits, budget negotiators now return to the bargaining table to try to shrink domestic programs that have already seen significant cuts. Senate Budget Committee chairman Pete V. Domenici (R) of New Mexico said there was ``great skepticism'' about finding enough reductions.

``We left [the White House] with a willingness to go try,'' Senator Domenici said. But he added that senators doubted the renewed effort would yield a big enough cut in the federal deficit.

Both chambers have proposed budgets that would, in theory, cut $56 billion from the deficit next year. The Senate plan would have frozen federal pension COLAs, saving about $6 billion next year and $22 billion over three years, but that plan is now dead.

GOP Senate leaders are now pushing the House to find cuts in domestic programs to replace those savings. White House spokesman Larry Speakes said the House would have to agree to 80 percent of those cuts proposed by the Senate.

House Budget Committee chairman William H. Gray III (D) of Pennsylvania, more upbeat than Domenici, said he saw some reason for optimism after the meeting with the President and vowed to look for additional savings. Representative Gray has already agreed to produce $1.5 billion in added cuts for 1986.

House Speaker Thomas P. O'Neill Jr. (D) of Massachusetts told reporters that the Small Business Administration, Amtrak, and revenue sharing would take additional cuts. However, he indicated the House would shy away from eliminating programs, as proposed in the Senate.

Speaker O'Neill also said he was willing to negotiate freezing COLAs for civil servants and military retirees, even though that is not in the framework. House and Senate negotiators also could find about $8 billion in savings over three years if they accepted a proposal offered by Senate majority leader Robert Dole (R) of Kansas. He has recommended adding state and local employees to the social security and medicare programs.

For the GOP leadership, winning some major deficit cuts is essential. Senators Dole and Domenici have already led their members to a politically risky vote to freeze federal-pension paychecks for a year, and they now need to show evidence that risk was worthwhile.

Ever since the new Congress began, congressional leaders have been vowing to cut the deficit by at least $50 billion. The task for the Republicans as well as for Democrats is to produce a credible budget that would provide real cuts -- and not mere bookkeeping changes.

President Reagan in recent weeks had played down the budget deficit. His decision to bring members of Congress to the White House and step personally into the dispute may be a nod to a fact of legislative life. He had been concentrating on his proposed tax reform. But congressional leaders have repeatedly said that there would be no tax reform until Congress passes a deficit reduction measure.

Reagan at least brought the feuding parties back to the bargaining table.

But it is not certain the new determination to produce a budget will succeed. ``All of us are looking at first-year savings in excess of $50 billion,'' said Domenici, adding that the goal is to find at least $275 billion in savings over three years. Without those savings, the deficit would total about $200 billion a year.

You've read  of  free articles. Subscribe to continue.
QR Code to Facing the facts on the budget
Read this article in
QR Code to Subscription page
Start your subscription today