President Reagan will veto legislation to keep the government operating through the Christmas holidays if Democrats succeed in "garlanding" it with money for public works jobs, Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) said yesterday.
But even as Democratic leaders were talking about more spending, the Democratic-controlled House, in a surprise move, approved a 2 percent cutback in a $10.8 billion proposed spending bill for the Treasury Department, Postal Service and White House.
The House voted, 193 to 172, to make the cut and then approved the measure, 269 to 98.
Baker's veto warning came as House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) said he will try to add the jobs money to a stopgap government funding bill that Congress must adopt by Dec. 18. In an open effort to pick up Republican votes for the bill, O'Neill also reeled off a long list of job-creating projects that might be included.
"We are looking at a number of areas -- rehabilitation of public buildings, water systems, parks, public housing," said O'Neill, who later added Amtrak facilities, hospitals, dams and reservoirs and other items to his list. "We are looking at projects that will benefit both rural and urban areas, that will give employment to both the skilled and the unskilled."
Asked if he was trying to spread the largesse so widely that Republicans couldn't afford to turn it down, O'Neill smiled and said, "Maybe that's part of our strategy."
But when Baker returned from a meeting with Reagan, he reaffirmed both his and Reagan's opposition to action in the current lame-duck session on anything more than a bipartisan plan for a nickel-a-gallon increase in the gasoline tax to finance $5.5 billion in highway, bridge and transit repairs.
Not only will the Republican-controlled Senate balk at adding jobs money to the omnibus government spending bill, Baker said, but Reagan left "no doubt" in the meeting that he would veto the measure if the Democratic jobs plan is included.
"If they try to garland up the continuing resolution, he'd have no hesitation" about vetoing it, said Baker, suggesting that a veto might threaten Congress' plan to recess for the holidays by Dec. 15.
Existing spending authority runs out Dec. 17 and must be reenacted to avoid a government shutdown the following day. A fight between Reagan and Congress over a stopgap funding bill last year at this time forced the government to close down for a day until a compromise was reached.
At the White House, Reagan again criticized the Democratic jobs plan, saying "it would ignore all the things that are happening to the economy and . . . would be self-defeating to have such a program . . . "
House Minority Leader Robert H. Michel (R-Ill.) called it "simply a rehash of what we've had before," and Baker, in comments later to reporters, said even the highway jobs will would be an "heroic-sized accomplishment" for a three-week session. "Next year we'll take a fresh look," he added.
The Treasury-Postal Service money bill was the first of 10 appropriations that faced Congress in the post-election session. And the cutbacks came as a surprise in light of Democratic gains in the recent election and expectations that Congress may be willing to spend more money to help with economic recovery. However, one Democratic member of the Appropriations Committee speculated that support for the cutbacks stemmed from concern over mounting federal deficits.
In debate over the measure, Republicans charged it would spend more than the congressional budget allows, as well as more than Reagan wanted. The 2 percent cutback would apply only to discretionary programs, meaning a cut of roughly $116 million, according to Rep. Clarence E. Miller (R-Ohio).
Aside from the dispute over spending levels, the measure also would increase funding for audits of corporations and wealthy individuals and fully fund the Bureau of Alcohol, Tobacco and Firearms, which Reagan wants to eliminate.
As approved by the Appropriations Committee, it also would omit long-standing language preventing the Internal Revenue Service from altering the tax-exempt status of private schools that discriminate on the basis of race -- an omission that provoked strong protests from conservatives.
The Appropriations Committee also would have prohibited the Office of Management and Budget from interfering with rules propounded by regulatory agencies, but the provision was stricken from the bill by the House on grounds that it amounted to legislating on an appropriations bill.
Meanwhile, Senate Democrats endorsed and introduced a sense-of-Congress resolution calling on the Federal Reserve to continue policies aimed at bringing down interest rates and began drafting a jobs-creating proposal of their own.