The Senate Budget Committee voted late yesterday to spend $458.8 billion in the coming fiscal year and run a $63.2 billion deficit.
The proposed budget for fiscal 1978 contains nearly all President Carter wants to spent for defense, but substantially cuts his requests for international spending. Last week, the Senate's House counterpart adopted a budget with a deficit of $64.3 billion in the new federal spending year which begins Oct. 1. The government is expected to run a deficit of $69.8 billion in the current year.
The House and Senate committee actions can give little encouragement to President Carter, who claims he still plans to balance the federal budget by 1981.
On Feb. 22, President Carter proposed a 1978 budget which would spend nearly the same amount as the Senate committee, estimated his budget would have a deficit of $57.7 billon. But Senate committee aides said yesterday that the President's budget makes many more optimistic assumptions about the economy than do the congressional budgets. The President also proposed more spending programs after he submitted his budget in Feb. Committee staffers estimate President Carter's budget would run a deficit of $66 billion, larger than both the House and Senate versions.
In what some committee members have construed an early tests of the President's proposed tax rebates for 1977, the budget committee on a straight party-line vote gave implicit approval to the $50-a-person rebates.
The President's rebate proposal is in trouble in the Senate, Carter officials have acknowledged. Republicans are almost soured in opposition to the one-shot rebate, preferring a permanent tax cut, and many Democrats disagree with the notion that the $50 payout would do much to stimulate the economy.
Last week, Office of Management and Budget director Bert Lance said that if the vote on the rebate were held now, its chances would be "iffy." The Senate will vore on the rebate April 13.
In two separate votes yesterday, however, Democrats joined ranks to kill two separate Republican budget proposals which would have set policy on the assumption that the rebates are defeated. The House has approved the President's proposals with some minor modifications, and the Senate Finance Committee approved them last month.
Republican aides said the vote in the budget committee yesterday is an indication that the administration has headed off some of the Democratic opposition and is likely to win on April 18.
The budget committee yesterday, on an 11 to 1 vote, sent its version of the 1978 budget to the Senate floor, with a spending level of $458.8 billion and a resulting deficit of $63.2 billion.
The budget - which does not recommend actual programs but only sets spending targets in a wide variety of areas such as a defense, health, income security, and agriculture - gave the President nearly all he desired for the defense budget but cut him sharply on international spending.
The House Budget Committee voted last week to spend $109.6 billion on defense in 1978, which is $2.3 billion less than the President's request and $2 billion below the Senate committee's levels. On Tuesday, the Senate committee had approved the full $111.9 the President had asked for.
But at the urging of its chairman, Sen. Edmund S. Muskie (D-Me.), who said he was frightened by the large $65.2 billion deficit the committee devised during its first run through the numbers, the committee went back and cut spending by $2 billion, including a $300 million reduction from the defense category.
Muskie said that the Pentagon should be able to absorb about $300 million of pay increases next year through increased efficiencies, but the committee gave the President nearly all he asked for nothing the failute of the arms limitation talks with Moscow and the possible need to speed development of some weapons systems.
The Senate and the House must agree on a tentative 1978 budget by May 15, and by Sept. 15 must set a final, binding spending ceiling and a revenue floor for the fiscal year which starts two weeks later on Oct. 1.
Congress is in the second year of its new budget process which is designed to give it the same tools as the President has to deal with overall spending and to use the budget as a economic tool. While the President proposes a budget each year, and has a large Office of Management and Budget to propose and track federal spending, Congress decides on the actual federal spending and taxing agenda.