Going Into the Trenches

By Ed Magnuson

Reagan and Congress snipe over the budget

Everybody's calendar read "May 1983." But at the White House and on Capitol Hill, the politicians had mentally flipped the pages forward to Election Year 1984. Washington was awash in harsh political rhetoric, ostensibly centered on the substance of the fiscal 1984 budget. In reality, the hectic week of name-calling and intrigue, climaxing in a topsy-turvy nighttime Senate session, was a fierce skirmish in the battle to determine which party can most credibly claim credit, or escape blame, for the state of the U.S. economy. When the smoke cleared, both sides were dug into trenches, steeling for a summer of Government by veto.

The President opened the hostilities on Monday with a rousing attack on "irresponsible spending" by Congress. Appearing before the National Association of Home Builders, Reagan ticked off a series of possible revenue-raising measures that were at various times considered, but never adopted, by the liberal Democrats in Congress. Each one, including a hike of 10% in the capital gains tax on home sales and a limit on mortgage interest deductions, brought shouts of "No, no, no!" from his audience. He agreed with his critics that federal budget deficits "do matter," but turned the issue around, claiming that "deficit spending represents one of the most alarming dangers to our republic and to the prosperity of our people." Reagan contended that raising taxes to reduce the deficit is wrong. "The deficit doctors have their scalpels out, all right, but they are not poised over the budget," he charged. "What they're ready to operate on is your wallet." This drew cheers.

The next night Reagan used a prime-time press conference to assail Congress again. "It is time to draw the Line," he declared. "I will not support a budget resolution that raises taxes while we are coming out of a recession. I will veto spending bills that would rekindle the fires of inflation and high interest rates."

Why all this thunder now, especially from a President whose tax cuts and military spending increases obviously had something to do with the deficits that he now decries? Explained a top Reagan aide: "Ronald Reagan will be cast as the guy who wants to keep down taxes. That is important politically." For the White House, the acrimonious struggle in the Senate to pass a budget resolution had become virtually irrelevant. Declared a presidential aide: "We've pretty well made up our minds on a budget strategy, no matter what the Senate does." The plan, he went on, is for Reagan to veto any tax or nonmilitary spending increase that he considers too high, even if it leads to a stalemate with Congress.

Reagan's attempt to shift the blame for the deficits to Congress was deeply resented by Democratic leaders on Capitol Hill. "President Reagan is trying to pass the buck on the worst record of Government red ink in American history," charged House Speaker Tip O'Neill. "It is Reagan's recession, the runaway Reagan military budget and the Reagan tax breaks forthe wealthy that are creating the Reagan red ink." House Majority Leader James Wright called Reagan "the biggest alibi artist ever to serve in the White House." Such barbs led Deputy White House Press Secretary Larry Speakes to say cuttingly, "Those guys are taking to flights of partisan fantasy lately. I don't know whether it has to do with age or with the fact we've got an election coming up." (Both O'Neill, 70, and Wright, 60, are younger than Reagan, 72.)

When Reagan on Thursday morning held a White House meeting with congressional leaders to appeal for bipartisanship on such foreign policy issues as funding for the MX missile and Central America, Wright could not resist complaining directly to Reagan: "You can't have it both ways. We in Congress can't be expected to be supporters one day and whipping boys the next." With a smile, Reagan told Wright that he had heard his "alibi artist" dig, and added, "I think I've got a couple more cracks coming myself."

The sharp exchanges did not make it any easier for legislators of either party to fashion an acceptable budget. The contentious Congress has been trying for two months to approve a resolution that would impose spending limits, set revenue targets and estimate the resulting deficit for 1984. The nonbinding resolution does not go to the President for rejection or approval, but it helps congressional leaders impose fiscal discipline.

In the first two years of his Administration, Reagan used the overall spending limits to win cuts in social programs. But this year the White House feels it can do just as well without a budget resolution. This is because not even the Senate, theoretically controlled by Republicans, has been willing to meet Reagan's demands: that there be no significant tax hikes (he feels they could stifle the economic recovery), that defense spending be increased by 10% (he has recently conceded that he could settle for 7.5%), and that most other funding be frozen.

The Democrat-dominated House last March passed a resolution that would limit the increase in military spending to 4%, create added revenue of $30 billion (presumably by canceling Reagan's third-year tax cut), spend an added $33 billion on nondefense domestic programs, and produce a 1984 deficit of $174.45 billion. The budget Reagan had submitted in January would have carried a $188.8 billion shortfall, according to Administration estimates. The Reagan projections included a deficit of $194.2 billion in 1985, while the House plan estimated its 1985 deficit at $146.7 billion.

In the Senate, Republican Party leaders did not even introduce the Reagan budget, knowing that the 10% military hike and the large built-in deficit could not be passed. Unable to get Reagan to offer sufficient concessions, Republican Pete Domenici, the frustrated chairman of the Budget Committee, voted to send a budget almost identical to that passed by the House to the Senate floor, where he hoped to amend it so that it would more closely resemble what Reagan wanted. Two weeks ago Republican conservatives held out against any tax increase, and moderates fought against raising military spending even to 7.5%, while the only bipartisan agreement was on a hike of at least $11 billion in non-defense programs. The result was a Senate deadlock. Majority Leader Howard Baker successfully urged that the whole matter be tossed back to Domenici's committee. The budget process was clearly unraveling.

Last week Domenici and the Senate tried again. With White House legislative aides remaining aloof, Domenici and Baker renewed, not very optimistically, a proposal that they thought Reagan might accept. It included a 7.1% rise in Pentagon funding and only negligible tax hikes. Both lawmakers expected the resolution to die in the committee on an 11-to-11 tie vote. But Democratic Presidential Hopefuls Gary Hart and Fritz Rollings, their minds on 1984, were off on political speaking engagements. The Domenici-Baker resolution was approved by an 11-to-9 vote, sending it to the floor, and eliciting a justifiable crack about Hart and Rollings from a White House aide: "I guess campaigning is more important to them than the budget."

All 100 Senators were on hand the next day for the floor debate. "The votes today," declared Republican Whip Ted Stevens, "will be the acid test of the budget process." Florida Democrat Lawton Chiles assailed the deficits in the Domenici-Baker budget, which would be $192 billion in 1984 and reach $220 billion in 1988. "I thought the Republicans were the party of fiscal responsibility," he said. "Is this the way to lower interest rates? That is a plan for catastrophe." The resolution was defeated, 56 to 43.

Next came a compromise offered by Washington Republican Slade Gorton, a freshman. It had some bipartisan support and the best chance of approval. It sought a 6% increase in defense spending and substantial new revenues: $9 billion in fiscal 1984, $13 billion in 1985, $51 billion in 1986, with declining deficits of $178.6 billion, $167.7 billion and $130.1 billion.

Such key Democrats as Senate Minority Leader Robert Byrd, Whip Alan Cranston and Massachusetts' Ted Kennedy backed Gorton's proposal. There was a hush in the hall as the tense vote was taken. Democratic Magnuson. Presidential Hopeful John Glenn drew surprised whispers when he voted aye, reversing his position on a similar resolution the week before. Nonetheless, the Gorton compromise lost, 52 to 48.

As the evening wore on, Domenici modified his proposal only enough to let it qualify technically as a new one. If there was no agreement, he warned, "we will get veto after veto." The fault finding should stop, he argued, and the budget process should be saved. But Democrat Dale Bumpers of Arkansas, who rarely gets angry, railed at the Republican deficits. "If this deficit had been presented by Jimmy Carter," he shouted, "there would have been a serious outcry for his impeachment." Finally, the Domenici proposal was defeated again, 57 to 43.

Midnight was approaching. Republican Paul Trible of Virginia and Democrat Patrick Leahy of Vermont were in black tie, restlessly unable to attend a social function. Republican Senator Barry Goldwater, 74, decided to go home and go to bed. Howard Baker in effect threw in the towel. He asked the Senate to reconsider the Gorton compromise. "I did not support it, and I do not support it," he said. "I don't like what I am doing." But Baker argued that the Senate must try to pass some resolution and then fight out the issue in conference committee meetings with the House.

The roll call on the revived Gorton measure began. Both Domenici and Baker, who had watched his leadership vanish for the moment, voted no. But Republicans William Cohen, Thad Cochran and Stevens switched from their earlier opposition and voted yes. The count stood at 50 opposed, 49 for the resolution; it appeared lost. Domenici, now weary of the battle and determined to preserve the budget process, dramatically changed his vote. The compromise passed, 50 to 49.

Afterward Reagan repeated his vow to veto the kind of tax increases, higher domestic-program funding and lower military-spending levels included in the Gorton compromise. At a White House staff meeting the next morning, the mood was somber, despite the attitude of detachment toward the Senate budget decisions. It was dawning on everyone that Reagan's inability to wring an acceptable budget out of the Republican Senate was a sign of political weakness, not something to brag about on the hustings. It was becoming clear too that running against Congress is tricky when one house belongs to the G.O.P.

For the nation, moreover, Government by veto loomed as a tedious and unpredictable process. At a time when the public is looking for statesmanship and solutions, its elected officials had set a course that bodes more bickering and deadlock. -- By Ed Magnuson.

Reported by Douglas Brew and and Neil MacNeil/ Washington Washington

With reporting by Douglas Brew, Neil MacNeil/Washington This file is automatically generated by a robot program, so viewer discretion is required.