House and Senate budget conferees deadlocked yesterday on whether to spend any money next year on so-called soft public works programs that would put low-skilled persons to work on maintenance projects in the cities.
Although the soft public works programs now before Congress are substantially different from the one proposed by President Carter last spring as a centerpiece of his urban initiative, administration officials are lobbying the budget conferees hard to keep money in the budget for such a program.
For even in a substantially changed shape - one that shifts the focus away from trying to hire mostly hard-to-employ individuals for the projects - the soft public works programs are one of the few major urban proposals made by the President last Spring that is still alive in Congress.
Because of the conference deadlock, Sen. Edmund Muskie (D-Maine), chairman of the Senate Budget Committee, will ask the Senate today to instruct him to permit no funds at all in the fiscal 1979 budget for public works programs. It will be a test vote on whether a public works bill has any chance in the Senate.
Muskie said that the soft public works programs are not needed in a time of inflation and falling unemployment and that there are better, less expensive government programs to get at the problems of the hardcore unemployed.
House conferees, headed by Budget Committee Chairman Robert N Giaimo (D-Conn.), refused to allow less than $1 billion for public works in the 1979 budget.The House version of the 1979 budget contains $1 billion in spending authority for traditional public works programs and $1 billion for the new soft public works projects.
The Senate budget planned to spend no new money at all next year on public works. The Senate and House are supposed to agree on a 1979 budget - for the fiscal year starting Oct. 1 - by Friday.
As part of an overall compromise package yesterday, Senate conferees apparently were willing to make room for about $500 million of spending authority for public works, even though the Senate last week approved a budget with no money for either soft public works or hard public works.
Hard public works projects give money to state and local governments to hire regular construction firms and workers to build or remodel new buildings. The original Presidential proposal on soft works would have required contractors to hire mainly disadvantaged workers for less difficult projects such as street repair.
Heavy lobbying by construction unions and builders changed the focus of the congressional bills away from a program aimed mainly at the hard-to-employ.
Should conferees fail to reach agreement on the public works portion of the budget, other parts of the tentative compromise could unravel, including how much of a tax cut the 1979 budget resolution will permit.
The fall budget passed by Congress is binding and a tax cut bigger than anticipated in the budget would be out of order in the Senate.
The House version of the budget allowed for tax cuts $3.5 billion smaller than the Senate version. Sen. Russell Long (D-La.) has said he wants to pass a tax cut bigger than the $16.3 billion one approved by the House in for the year starting Jan. 1.
Only a portion of the 1979 tax cut would fall into the federal spending (or fiscal) year that starts Oct. 1.
The tax compromise that Senate and House conferees had no objection to yesterday(although no formal vote was taken) would permit a tax cut as big as $19.4 billion next yeat.
Depending upon whether conferees are able to reach an agreement on public works spending, the fiscal 1979 budget would probably contain a deficit in the neighborhood of $38 or $39 billion. When President Carter first made his budget proposals for fiscal 1979 last January, he anticipated a deficit of $60.6 billion.
A combination of smaller tax cuts, program reductions by Congress and spending re-estimates have combined to reduce that deficit projection by more than $20 billion.