Senate and House conferees adopted a binding 1979 federal budget yesterday that lops $12.7 billion off the spending total proposed by President Carter and leaves room for a tax cut of as much as $19.4 billion for the year starting Jan. 1.
The budget resolution, which still must be approved by both houses of Congress, sets overall spending ceilings and revenue floors for broad functions of government for the fiscal year beginning Oct. 1.
The resolution limits federal spending to $487.5 billion and trims the deficit to $38.8 billion, well below the $60.6 billion deficit the President anticipated when he proposed his $500.2 billion budget last January.
Sen. Edmund S. Muskie (D-Maine), chairman of the Senate Budget Committee, called the deficit reduction "a tremendous achievement - a signal to the country that we're going to do our darndest to get the budget under control."
The resolution may come up for a House vote today, and if it is approved, as expected, it will probably be considered by the Senate Monday. Until Congress passes a binding 1979 budget, it cannot enforce spending limits for next year.
Conferees finally broke a deadlock yesterday over spending for local public works by, essentially, agreeing to disagree.
The program was a key part of Carter's urban package, and the president proposed funding it at $1 billion a year for three years. Part of it would have provided young people out of work for a long time with jobs fixing up deteriorating public buildings and streets.
Never too popular with the construction industry or organized labor, the maintenance jobs bill has stalled in a Senate Enviornment and Public Works subcommittee but has passed a House Public Works subcommittee, which approved $2 billion for regular public works in addition to $1 billion for the maintenance jobs.
The original House budget resolution provided $2 billion for the program, which would have allowed half that amount for the maintenance jobs. But the Senate balked.
Led by Muskie - who called the measure "unacceptably expensive, inflationary and duplicative of existing programs" - the Senate voted 63-21 last week to kill any provision for public works in its budget resolution.
Yesterday - after many private sessions and strong lobbying for the measure by House Budget Committee Chairman Robert N. Giaimo (D-Conn.). House Speaker Thomas P. (Tip) O'Neill (D-Mass.) and Vice President Mondale - the conferees disposed of the issue in less than 20 minutes.
In a last-minute display of legislative wizardry, they adopted figures for community and regional development - $8.9 billion in budget authority and $9.6 billion in outlays - and agreed to interpret them differently.
Their resolution said, "House conferees assume that within these amounts, $700 million is available for public works. Senate conferees assume the amounts agreed to are necessary to fund existing legislation."
The House conferees argued that $700 million could be taken from the Small Business Administration's disaster relief funds, but the Senate conferees doubted it could be done. The Senators also argued that the measure had changed during its months in committees so that it no longer was aimed specifically at helping the longterm unemployed.
Both House and Senate sources said yesterday the action, coupled with the Senate's 63-21 vote last week, means te local public works measure is all but dead for this year.
However, George Gross of the National League of Cities said the conferees' agreement "does not make passage impossible," and Tom Cochran of the U.S. Conference of Mayors said, "They didn't kill the bill. We still have a shot at it."
White House and Commerce Department officials lobbying for the bill have scheduled a strategy meeting today, but one White House source conceded, "I'm not overly optimistic."
The conferees' anticipated $19.4 billion tax cut gives Senate Finance Committee Chairman Russell Long (D-La.) room to maneuver when he brings his tax cut bill to the floor later this month. He has said he wants a cut larger than the $16.3 billion measure approved by the House.