White House officials reached agreement yesterday with Senate Majority Leader Howard H. Baker Jr. (R-Tenn) on a new budget plan that would cut less in spending and raise more in revenues than President Reagan requested last month, according to sources.
The plan, roughly in line with a strategy developed by Senate Republican leaders last Friday, is aimed at reaching Reagan's goal of more than $100 billion in new savings by 1984.
But, the sources said, it falls $2.5 billion to $3 billion short of Reagan's target of $16 billion in additional savings--on top of $35 billion already approved by Congress--for the 1982 fiscal year that started Oct 1.
As recommended by Senate leaders, only $5 billion to $6 billion would be cut from appropriations, in contrast to the $10.4 billion that Reagan recommended. Reagan had proposed that $2 billion be cut from spending increases planned for the Pentagon, with the rest to be cut from non-defense programs. Senate Appropriations Committee Chairman Mark O. Hatfield (R-Ore.) has proposed a cut of $4 billion from defense and other Senate sources have said $3 billion in defense cuts are likely.
The major difference comes in the area of revenues, with the agreement calling for $48 billion in new revenues over the three-year period, or about double what Reagan proposed.
Reagan called for $3 billion in "revenue enhancement," as the administration described the plugging of some tax loopholes, for fiscal 1982. The Senate Finance Committee has also been considering other sources of revenue, such as increased excise taxes on cigarettes and alcoholic beverages and the consumer interest tax deduction on items other than autos and home mortgages.
From $7 billion to $8 billion in new revenues would be anticipated for this fiscal year, although there would reportedly be no effort to pass another tax bill before Congress recesses at the end of the year.
Instead, the second (and theoretically final) budget resolution for 1982 that Congress is expected to begin drafting this month will anticipate tax increases later in the fiscal year that ends Sept. 30, 1982, a task that may prove difficult in a congressional election year.
The compromise--reached between Majority Leader Baker and White House chief of staff James A. Baker III, presidential counselor Edwin Meese III and Office of Management and Budget Director David A. Stockman--reflected congressional anxiety over further heavy budget cuts in the wake of deep cutbacks in domestic spending that Congress approved last summer at Reagan's behest.
The accord is also seen as relieving pressure that has been building in Congress for a deferral of the big individual income tax cuts that Congress also approved last summer.