Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) intervened yesterday to head off a possible revolt among Republicans against President Reagan's decision to defer major parts of his latest budget-cutting program.
At stake was whether several Republicans on the Senate Budget Committee, led by Sen. William L. Armstrong (Colo.), may press ahead immediately with a plan for tax increases and entitlement program cuts aimed at balancing the federal budget by 1984.
The unhappy Republicans fear delay will mean higher deficits and abandonment of the balanced budget goal. Reagan promised a balanced budget by 1984 in his campaign, but has now said the goal is unattainable. Baker met for about an hour with Armstrong and two others, Sens. Rudy Boschwitz (R-Minn.) and Slade Gorton (R-Wash.), in an attempt to dissuade them from pushing ahead with their plan. Baker later met with Budget Committee Chairman Pete V. Domenici (R-N.M.), who originally drafted the plan but indicated Tuesday he might be willing to defer it. Domenici was described yesterday as now taking a "mediator's" role.
The participants declined to comment afterward, but it was understood that Armstrong was appealing to the White House.
Regardless of what Armstrong and his colleagues do, the rumbles of revolt are indicative of the problems that Reagan faces as he chooses among conflicting priorities and seeks to put off some politically tough decisions until next year.
For the moment, Reagan has given top billing to tax cuts and higher defense spending, which together contribute to bigger deficits. A balanced budget has slid a notch or two on his list of priorities, and he indicated strongly again Tuesday that he is not enthusiastic about raising taxes to help reduce deficits.
But an end to deficits is still holy writ to many Senate Republicans who campaigned on budget-balancing platforms and see tax increases and entitlement cuts as the only path to their goal. House Republicans, all of them facing reelection next year, are only too glad to see tax increases and other painful measures fade off the immediate agenda. But senators, with their six-year terms, tend to take a longer-range view.
Moreover, Reagan may be able to wait for his January budget message, but Congress has a whole string of politically difficult decisions to make before going home for Christmas, including:
A second budget resolution for fiscal 1982.
An earlier resolution, passed last summer, set spending targets. This one, which was due in September but postponed in light of Reagan's September proposals for another $16 billion in budget cuts for this year, is supposed to set actual ceilings. It will also contain spending, revenue and deficit projections for 1983 and 1984.
It was in connection with the budget resolution that Domenici, groping for a way to bring off a balanced budget by 1984, proposed $199 billion in tax increases and spending cuts through 1984. When the White House resisted he later reduced this to $163 billion, hoping a smaller tax increase would win presidential support.
An alternative to this plan would be to adopt the first budget resolution (the target-setter) as the final budget resolution (the ceiling-setter). But it would be understood that further changes would be made after Reagan submits his budget message in January.
This alternative would give the White House its way. House Republican leaders have also embraced this holding-action strategy. The Senate Republican strategy may become clearer after a meeting of the Senate Budget Committee, scheduled for today. The House Budget Committee is also scheduled to resume work on the budget resolution today.
These, too, are long overdue, partly because of maneuvering over Reagan's September budget proposals. None of the 12 executive branch appropriations bills has yet reached the White House for signature, and none of the major bills appears likely to meet Reagan's September targets, which call for a 12 percent across-the-board cut from spending levels he first proposed last March. Congressional leaders say the bills will merely comply with his March targets and fall well within congressional targets set in the first budget resolution.
Reagan has said repeatedly that he will veto "budget-busting" money bills but has not spelled out the precise criteria. Some vetoes are expected, however.
The "continuing resolution."
Congress had to pass stopgap funding for the government at the start of the fiscal year on Oct. 1 because it had passed no appropriations bills for the new year. That funding authorization runs out Nov. 20, so Congress has to pass another so-called continuing resolution by then to keep money flowing into federal departments and agencies.
The House Appropriations Committee is expected today to approve a resolution that anticipates continued funding through the end of fiscal 1982 at levels considerably higher than Reagan proposed last September. Even the Republican Senate, judging by its previous action on appropriations bills, is considered unlikely to curb spending as much as Reagan wants for the continuing resolution.
Hence it is also a possible veto target, even though an executive-legislative standoff could paralyze the government because there would be no authority for the government to spend any money after Nov. 20. The deadline gives both sides strong leverage, although the stakes are extraordinarily high.
Meawhile, Federal Reserve Chairman Paul A. Volcker raised the possibility of new taxes--or less of a tax cut than Congress approved last summer--as one way of bringing the federal budget closer to balance and halting the growth of borrowing by the government.
"If spending trends cannot be brought into line with our prospective capacity to generate revenues with present taxes, then we cannot shrink from considering new revenue sources," said Volcker in a speech prepared for delivery at the University of Nebraska.
Volcker also called for more budget cuts and continued tight control over the money supply. He praised Reagan's and Congress' efforts to cut the budget so far but added that the results "fall far short of what would be needed to balance the budget in any reasonable time frame."