Senate Republican leaders, casting about for an alternative to President Reagan's 1983 budget only a day after he submitted it to Congress, said yesterday they are exploring a Democratic proposal to freeze federal spending at current levels.
With many Republicans balking at Reagan's projected $91.5 billion deficit and expressing alarm that it may rise even higher, Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) labeled "intriguing" an idea floated by Sen. Ernest F. Hollings (D-S.C.) to freeze spending for defense and basic entitlement programs at current levels and scale back the 1982 and '83 tax cuts.
Baker said he continues to support Reagan's budget, including the tax cut, and doubts that Pentagon spending could be frozen because of existing contractual obligations.
But Baker clearly left the door open to bipartisan negotiations over these and other matters as he described the Hollings suggestion as a "perfectly legitimate and perfectly respectable alternative if someone fully develops it." He said he intends to explore the proposal further with Hollings and key Republican leaders, some of whom also said yesterday they were looking closely at the idea.
This early Republican talk of an alternative, reflecting intense and mounting GOP concern over Reagan's budget, came as the administration's top economic team--Treasury Secretary Donald T. Regan, Office of Management and Budget Director David A. Stockman and chief economic adviser Murray L. Weidenbaum--defended the Reagan budget before a skeptical House Appropriations Committee.
Both Appropriations Chairman Jamie L. Whitten (D-Miss.) and ranking Republican Silvio O. Conte (R-Mass.) sharply criticized the budget's tilt toward defense spending at the expense of domestic outlays. "I can't agree with the priorities of this budget," said Conte, describing the domestic spending cuts as "too deep."
"Just read the history of the Depression, which started with the same policies," Whitten warned.
In response, the administration trio defended the budget as a blueprint for economic recovery, with Weidenbaum contending, "We have guns and butter but we are reducing the fat."
Stockman parried suggestions from Conte and others about compromise, suggesting that Congress should first come up with ideas of its own. "When you've reached alternative conclusions, we'd be happy to talk with you," said Stockman.
Baker's comments on the Hollings proposal were the strongest indication so far that Congress, including Republicans, will try to come up with a major rewrite of Reagan's budget this year instead of swallowing it virtually whole, as it did last year.
Another measure of Senate Republican concern came from Finance Committee Chairman Robert J. Dole (R-Kan.), who suggested that legislation to raise the debt ceiling again may have to be sweetened with some revenue-raising measures to show progress in reducing the deficit. "That might be a great opportunity to put together a little package that would send the financial community the right signal" of smaller deficits, he told a reporter.
Dissension was coming from House Republicans and their conservative Democratic allies too.
"That deficit is just mind-boggling to most of our people," said Minority Leader Robert H. Michel (R-Ill.) after a briefing for Republicans by Regan and Stockman. Even though the administration argues that the deficit amounts to a smaller percentage of the total economy than most previous deficits, "that's kind of hard for a real hidebound conservative to swallow," said Michel.
"There's a clear consensus the deficits are too big and something has to be done about it," said Rep. Phil Gramm (D-Tex.) after a similar briefing for conservative Democratic "boll weevils." Some defense cuts and tax increases are possible, although not as an alternative to domestic cutbacks, said Gramm, who co-sponsored Reagan's budget-cutting legislation last year.
A somewhat different version of the Hollings idea was advanced in the House by freshman Rep. Denny Smith (R-Ore.) in the form of a two-year freeze on spending aimed at balancing the budget by 1984. It attracted less attention there, with Michel saying he didn't know if it would take hold.
An aide to Hollings said the senator's suggestion, which the aide described as more of a "concept" than a concrete proposal, would reduce the 1983 deficit to about $40 billion. The Reagan budget would add up to about $150 billion without the controversial cuts that Reagan has proposed, many of which congressional leaders say will be difficult if not impossible to pass. By focusing on entitlement programs, defense and the tax cut, the freeze would affect the fastest-growing parts of the budget, the aide said.
Although details were still being worked out, a freeze on entitlements would presumably block cost-of-living increases for Social Security, welfare and other benefit programs.
Meanwhile, studies by the staff of the Democratic-controlled House Budget Committee challenged Reagan's contention that the recession can be blamed on previous administrations and claimed that deficits projected for each of Reagan's four years would exceed any previous deficits.
The recession, according to the committee staff, arises from "contradictions" in the administration's economic policy, including bringing down inflation by tight money policies that produced economic slowdown. Employment began to decline only last July, the staff said, and the peak in interest rates did not occur until September. Business and consumer confidence also did not decline until mid-to-late 1981, the staff added.