After weeks of talk, Congress took the first tentative votes on next Year's budget yesterday, with the House Budget Committee approving in principle a plan that would involve about $15.9 billion in spending cuts and produce the first federal surplus since 1969.
Even with the cuts, spending would rise more than $40 billion, from roughly $570 billion now estimated this year to $612.4 billion in fiscal 1981.
As proposed by Budget Committee Chairman Robert N. Giaimo (D-Conn.), the spending plan would have members of Congress and senior employes in both the legislative and executive branches forgo scheduled cost-of-living pay increases Oct. 1. Committee aides said this pay raise restriction would apply to all federal employes at GS16 and above, and all GS15s now at the maximum for their grade.
Giaimo also proposed, in a long list of program cuts, the elimination of Saturday mail service, deferral of President Carter's new youth employment program, which the White House had hoped to preserve and $1 billion in cuts below the president's budget for defense.
This last, if approved by the House, is sure to provoke a major battle with the large pro-Pentagon bloc in the Senate, which wants to increase the Pentagon budget.
The Budget Committee also agreed to set aside for Social Security and corporate income tax cuts sometime in the future about $10.3 billion expected from the new oil import fee Carter has imposed, and $3.5 billion that Giaimo urged be raised from unspecified other small increases in taxes and fees.
Committee Democrats beat back on a straight party-line vote of 15 to 8 a Republican proposal to provide instead for a $20 billion tax cut in 1981. Republicans have complained that the Democrats are balancing the budget almost entirely with tax increases rather than spending cuts.
The Budget committee does not have power to legislate specific tax changes or spending totals; these must be done separately by other committees. It can only propose broad totals. But its specific proposals do carry some weight, and are likely to carry more than usual this year as Congress moves to combat inflation by cutting the budget.
The proposed Social Security tax "cut" would not actually be a cut, but postponement of a large increase scheduled next Jan. 1.
As the Budget Committee was acting yesterday, the Senate Finance Committee scheduled a vote for today on a proposal by Republicans to put off for budgetary reasons the truncated national health insurance plan on which it has been working, plus Carter's proposal to expand Medicaid for lower-income children and mothers, his so-called Child Health Assurance Program. Giaimo would also defer CHAP in his budget plan.
The Senate Veterans Committee, meanwhile, bowed to the new budget-cutting mood and agreed, in a plan of action it sent to the Senate Budget Committee, to cut $281 million in spending on veterans next year.
But the Senate Agriculture Committee went the other way, approving 10 to 3 a proposal by Sen. George McGovern (D-S.D.) to increase wheat and corn price supports, over administration objections.
Off Capitol Hill, the American Newspaper Publishers Association and National Newspaper Association registered quick opposition to the proposal to end Saturday mail service. Postal unions are also resisting it. They have successfully blocked such a step in the past.
The committee's tentative vote in favor of spending cuts and a budget surplus was a first victory for Carter who last week tore up the budget he sent Congress only seven weeks ago, and said he would now propose enough cuts to eliminate a deficit next year, to fight inflation.
The vote was a defeat for liberals, who were trying to save threatened social programs. Among programs Giaimo would cut are the state share of revenue sharing, various job and urban aid programs, and Carter's proposed welfare "reforms."
Liberal Rep. Stephen J. Solarz (D-N.Y.), conceding defeat, wryly flourished a sign at yesterday's session reading, "Abandon All Hope All Ye Who Enter Here."
Giaimo spelled out various ways that Congress might raise the additional $3.5 billion in revenues he proposed. One was a 5 percent income surtax on higher-income households. Others involved increases in airport and other users' fees.
The House Budget Committee hopes to finish its work before Easter. Congress is supposed to agree on budget targets by May 15, then on a binding budget by Sept. 15 for the fiscal year beginning Oct. 1.
Giaimo, in one concession to committee liberals yesterday, did make room for limited grants to a few needy cities next year, to offset cuts in other domestic programs. The White House is also considering this.
Yesterday's agreement on spending and revenue targets was only a tentative step designed to guide the committee, which will reconsider the totals after voting on individual agency budgets.
The Budget Committee also approved for the first time targets for government credit and loan-guarantee programs, whose burgeoning growth has been contributing to turmoil in the bond markets.
The new targets would limit the growth of new direct loan obligations to $27.2 billion and the rise in new loan-gurantee commitments to $32.5 billion. The figures would become binding ceilings when the budget measure is revised in the fall.
Meanwhile, House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) and a dozen Democrats on the House Appropriations Committee urged Carter personally merely to set broad spending targets and allow their own subcommittees to work out the details.
At the same time Senate Majority Leader Robert C. Byrd (D-W.Va.) called on the president to unveil the specifics of his proposed spending cuts without delay. The Senate Budget Committee is scheduled to begin its own work next week.
Giaimo's recommendation to defer Carter's proposed new youth unemployment initiative is likely to draw some resistance from the White House. The president specifically retained the program in his revised budget as a gesture to liberals.
Along with that and delay of the Child Health Assurance Program, Medicare-Medicaid expansion plans and proposed inland energy impact money, Giaimo's package includes a 2 percent across-the-board cut in operating money for all federal agencies.
It also would cut the state's portion of revenue sharing, forestall the proposed antirecession aid to cities, slash the public-service jobs program, and slow grants for a spate of other projects. t