Congress missed its midnight deadline for producing a veto-proof emergency money bill for the government last night, and House-Senate conferees adjourned after hours of labor that produced a surprise proposal to raise the pay of House members.
The conferees are to return this morning in hopes of agreeing on enough spending cuts to avert a presidential veto of the catchall spending bill needed to keep most of the government from shutting down Monday.
Early yesterday, toward the end of a grueling 21-hour session, the Senate approved a 4 percent cut in domestic programs subject to the appropriations process, which the administration figures would give President Reagan nearly $6 billion of $8.4 billion in additional cuts he proposed in such programs last September.
Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) said this would be enough to get Reagan to sign the measure.
But the administration has called a House-passed version of the so-called "continuing resolution" or catchall money bill unacceptable, and House-Senate conferees were still far short of an agreement as the technical midnight deadline for enactment passed. That prompted congressional leaders to send the two houses home for the night while the conference went on.
On a critical issue of whether to include defense in the cuts, which House Democrats want, the conferees were exploring a 2 percent military spending reduction to last for only a couple of weeks until a defense appropriations bill can be passed.
Baker, who said earlier that it was "highly likely" Reagan would veto the bill if defense were cut, called the proposal only a temporary "rearrangement" and said Reagan might accept it, depending on "how the numbers turn out."
Baker told reporters the conferees were making "good progress" but said Congress may have to work through tomorrow to complete the job, although he said he hoped it could be finished today.
The conferees voted shortly before midnight to give House members a 4.8 percent pay raise and lift the ceiling on salaries of federal government executives.
The two pay increases were combined by Rep. Vic Fazio (D-Calif.), who said House members had not gotten a raise in several years. His motion was accepted by the conference after Senate members had voted to exempt senators from the pay raise.
If accepted by both houses, the measure would mean a raise for Cabinet members, congressmen and about 46,000 high- and mid-level government executives whose pay scales have been subjected to a ceiling. Members of Congress now receive $60,662.50 a year.
Whether either house would accept the pay package was questionable. The House has been timid about voting itself a pay raise, and it would be unusual for the Senate to vote House members salaries higher than their own. As drafted, rejection of the House raise would retain the federal executives' pay cap.
Lifting that cap would raise annual pay from the currently frozen level of $50,112 by an average of 4.8 percent to as much as $59,500 a year. The Senate proposed such a plan two months ago, but it died in conference.
Although current stopgap funding expired at midnight, Congress in effect has until the government reopens for business Monday to resolve its differences with Reagan. If it doesn't, all but activities necessary to safety or national security are supposed to be suspended.
Congress got into yesterday's predicament because it has yet to pass any appropriations bills for the executive branch, and, with the expiration of previous interim spending authority, Reagan was able to back Congress to the wall on the new budget cuts he proposed in September. With closure of the government at stake, he threatened to veto the measure unless it included at least half his proposed appropriations cuts--or between $4.5 billion and $5 billion, according to Baker.
The White House continued to take a hard line last night. Deputy presidential press secretary Larry Speakes told reporters: "The failure of the conference to act tonight leaves the administration with no choice but to initiate government shutdown procedures." Speakes said essential employes such as air traffic controllers and the military would remain at work.
"We are sure going to take a close look at it when it gets here," Speakes said of the conferees' proposal. "It's the president's position that he will find it difficult to accept anything less than the Senate version."
At issue was whether the House would settle close enough to the Senate plan to satisfy Reagan. Earlier this week it rejected a plan similar to the Senate's, but the margin was narrow and the House was described yesterday by its leaders as hoping to avoid a confrontation.
Big problems remained, however, including spending levels, the bill's expiration date (the House proposed Sept. 30, 1982, while the Senate approved March 30) and what House Minority Leader Robert H. Michel (R-Ill.) called the Senate's "trinketizing" of the measure with amendments.
Among the "trinkets" were an exemption from the cut for law enforcment agencies, $90 million for railway workers' retirement benefits and $70 million for aid to the handicapped. But foreign aid, unlike defense, was put under the same knife as domestic programs.
The Senate plan "certainly meets the president's test of going half way," said an authoritative administration budget official, referring to Reagan's concession earlier in the week that he would accept half the $8.4 billion in domestic appropriations cuts that he had wanted.
But the official said the House plan as computed by the Office of Management and Budget contained no savings whatsoever, although House Democrats insist that it actually gives Reagan most of what he wanted.
According to unofficial preliminary figures the Senate plan added up to savings of $5.8 billion, including the $3.3 billion that the 4 percent cut would add to $2.5 billion in savings already put in the bill by the Senate Appropriations Committee.
In addition, the House-passed spending levels for defense that were included in the resolution appeared to give Reagan more in the way of military cutbacks than he wanted, roughly doubling his $2 billion request, according to some congressional sources.
The Senate's 4 percent cut, approved 62 to 35 at 4:29 a.m. after marathon off-the-floor negotiations involving leaders of both parties, would leave defense and some politically sacrosanct programs like veterans' health benefits untouched.
For domestic spending, Reagan would have the flexibility to cut any individual program by up to 5 percent so long as the net result was a 4 percent reduction. This prompted complaints from Democrats that Congress was abdicating its responsiblities for what amounted to relatively small savings.
"Why die on a small cross?" asked Sen. Joseph R. Biden Jr. (D-Del.) bitterly.
But Baker had already made an accommodation with Minority Leader Robert C. Byrd (D-W.Va.) to roll back the termination date from the end of the fiscal year on Sept. 30, to a March 30 midpoint--meaning Democrats and other dissidents will get another crack at spending levels if individual appropriations bills haven't passed in the meantime.
This, coupled with concessions on programs like veterans' benefits, broke the logjam that had kept Baker hanging perilously short of a majority until nearly midnight. The whole resolution was finally approved shortly before 7 a.m.
As the new workday began, with most senators home asleep, House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) sharply criticized the Senate plan and accused Reagan of seeking "a headline and a political victory." Added O'Neill: "Those people out there are already hurt. On the eve of Thanksgiving, it doesn't appear that they have anything to be thankful for."
But other House leaders indicated willingness to negotiate.
Congress plans to remain in session or on standby all weekend, and the White House has said Reagan will delay his Thanksgiving vacation in California until a "satisfactory" solution is reached.
Missing the midnight deadline did not mean much, because most of the government is shut down over the weekend. On Monday, government workers would be required to go to work, but activities would theoretically be limited to shutdown chores except for work necessary to national security or "safety of life and property."