Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) said yesterday he favors halting further cuts in federal grants-in-aid to states and cities for the next three years so local governments can stabilize their own budget planning.
Domenici told delegates to the National Conference of State Legislators annual winter meeting here that he believes federal budget deficits can be significantly reduced by curbing the rise in benefits paid by federal retirement and other entitlement programs, paring back President Reagan's military spending estimates, closing some tax loopholes and freezing local government aid programs at current dollar levels.
"I'm fully aware that what's happened at the state level, the city and county levels in the past few months can't continue for very much longer," Domenici said.
"It appears to me that it's just about time to say that we've cut enough out of direct appropriated accounts of the federal goverment that relate to our states and cities and their programs. When we finish up in February or so with the appropriations bills, we will have made a dramatic, significant--far in excess of what anyone expected--curtailment in most of the . . . grant programs . . . that go to the cities, counties and states. I would submit that it's time now to just put a cap on that, so you know now for three years how much you're going to get."
Mayors and governors complain that the budget cutbacks approved by Congress last summer have created a situation where many of them are having to lay off workers, reduce services and ask voters for tax increases. Led by the Republican chairman of the National Governors Association, Richard A. Snelling of Vermont, many have asked for a moratorium on cuts in their federal aid for fiscal 1983 and 1984.
Reagan told reporters late last month, "I think it would be great if we could afford it . . . but I just think our emergency is so great, I don't know how we could hold back and wait for all of this."
Senate Majority Leader Howard H. Baker (R-Tenn.) promised the conference to protect from budget-cutting the $4.6 billion of unrestricted federal revenue sharing and, as Domenici did later, he said he believed states should again become recipients. Baker said he favored increasing revenue sharing by a "moderate degree." Domenici said he thought appropriations should be raised "dramatically" as a tradeoff for the elimination of some categorical aid programs to cities and states.
House Budget Committee Chairman James R. Jones (D-Okla.) said he thought news leaks about budget cuts were orchestrated as part of a good-guy, bad-guy game that would allow Reagan to say later that he was cutting less than his budget aides had recommended. He said Congress is less willing to give "blind faith" to administration proposals than it was last summer, and he believed that alternatives might be fashioned on the Hill to postpone the third phase of the tax cut, and perhaps alter the tax-credit leasing provisions and the All-Savers Certificates.