Overruling strong, last-minute appeals from his secretaries of defense and state, President Reagan has decided to veto a $14.1 billion supplemental appropriations bill he considers a "budget buster," high administration officials said today.
They said he will announce the veto in a Saturday morning radio address from his mountaintop ranch. Reagan will contend, they said, that the measure contains too much money for domestic social programs and not enough for defense and would thwart the economic recovery that Reagan believes is under way.
"It's his judgment that the bill is a budget buster and that it's necessary to draw the line on spending if the recovery is to continue," one administration official said of the measure to increase spending for a variety of federal programs for the balance of the 1982 fiscal year that will end Sept. 30.
Reagan made his decision about the veto late Thursday in a conference call from his ranch to White House chief of staff James A. Baker III and counselor Edwin Meese III. Officials said he decided to follow the unanimous recommendation of his legislative strategy group, headed by Baker and presidential assistant Richard G. Darman.
Their advice had been opposed by Secretary of Defense Caspar W. Weinberger and Secretary of State George P. Shultz, who sent separate memos to Reagan urging that he sign the legislation into law.
Weinberger's support for the measure, which contains about $2 billion less than he requested in additional defense spending before Oct. 1, is based on concern that Congress may decide not to pass any defense appropriations measure this year if the supplemental spending bill is vetoed. This probably would mean that defense spending would be limited to existing levels through a continuing resolution passed by Congress.
The Pentagon also has been concerned that the veto would halt or postpone a military pay increase contained in the supplemental appropriations bill and scheduled to take effect next Tuesday. White House advisers said today that the administration had found what one of them called "an appropriate mechanism" to provide the pay increase anyway.
But Pentagon officials said tonight that they were still scrambling to find funds in other accounts to provide the pay increase for the 2 million men and women in uniform until the new fiscal year begins Oct. 1.
"We've got enough to get to Sept. 15 but not beyond that," one official said.
"Please don't say that they're not going to get paid," he added. "We'll find a way."
Shultz' worry is that the veto will kill funding for the Caribbean Basin Initiative, one of the administration's pet projects. The supplemental appropriations bill has $350 million for the economic assistance Reagan has promised to friendly Caribbean nations, and House Majority Leader James C. Wright Jr. (D-Tex.) has warned that the administration "can kiss the Caribbean initiative goodbye" if Reagan vetoes the bill.
Administration officials acknowledged that obtaining other money from Congress for the Caribbean program will be extremely difficult. Nonetheless, they said Reagan is committed to the proposal and will continue to press for a new appropriation despite the veto.
The supplemental bill includes funds for nearly every federal agency. But its total was $918 million higher than Reagan wanted for social programs, including about $300 million in spending he had previously vetoed, and $2 billion less than he sought in defense spending.
The two largest items in the supplemental appropriations bill are $5.2 billion for the military pay raise, which Reagan wanted, and $5 billion to provide additional capital for for crop-support loans to farmers through the Commodity Credit Corp.
Reagan also opposed items providing $211 million for community service employment for older Americans, $148 million for compensatory education for the disadvantaged, $217 million for student financial aid, $112.5 million for federal highway grants, $39 million for the Postal Service, and $37 million for urban mass transit.
The bill also includes $607 million for retirement and health benefits for federal workers, money that eventually will have to be spent despite Reagan's veto.
Though Reagan's veto message will be cast in terms of economic policy, White House advisers who recommended the veto say they believe there are also some strong political reasons for doing it, according to administration officials.
Reagan and his advisers are seeking to heal the breach opened between the president and a significant number of conservative Republicans in Congress during the recent battle over the administration's $98.3 billion tax bill.
It was pushed through the House by an unusual coalition of the White House and the Democratic leadership over the opposition of 89 Republican members, many of them first- or second-term conservatives who campaigned for election on a platform of reducing government growth.
The fight to override Reagan's expected veto of the supplemental appropriations bill, which the White House believes the president is certain to win, is likely to reunite House Republicans who were divided by the tax bill.
Administration sources said the White House anticipates that it would restore the coalition of last year in which a solid bloc of Republicans was joined by a contingent of conservative "Boll Weevil" Democrats.
However, the White House staff's persuasive pressure on the president to veto the supplemental bill may have provoked a rare breach between the president and Senate Republican leaders who some staff aides call "the college of cardinals."
Headed by Senate Majority Leader Howard H. Baker Jr. (Tenn.) and Finance Committee Chairman Robert J. Dole (Kan.), they reportedly favored Reagan signing the measure for some of the same reasons Shultz and Weinberger gave in their memos to the president.
Sen. Mark O. Hatfield (Ore.), chairman of the Appropriations Committee and one of several senior congressional Republicans informed of Reagan's veto decision, said last night, "I think he has received exceedingly bad advice from his budgetary advisers in the White House."
Nonetheless, according to one administration official, the president has been assured he will have support from at least most of the Senate GOP leadership when Democrats attempt to override his veto.
Reagan's radio message is scheduled to be delivered from the trailer that serves as a staff office on his ranch. It will be broadcast live at 12:06 p.m. Saturday, Washington time, by AP and UPI radio, Westinghouse Broadcasting and the Mutual Radio Network. The live broadcast also will be offered to NBC radio affiliates.