The Reagan administration, under unremitting pressure from Republicans as well as Democrats to revise its two-day-old budget, yesterday sent out its strongest signals so far of willingness to bend and provide more anti-recession relief, including public works jobs and humanitarian aid.
Administration officials also said the White House would consider congressional proposals for higher taxes and cuts in the president's planned military buildup, although the president moved quickly himself to squelch speculation that he was backing off the 10 percent tax cut that is scheduled for this July.
It was on the issue of jobs and emergency relief for the unemployed that the administration appeared to be considering real concessions. Democrats have accused the president of ignoring the unemployed in his budget and, by refusing to compromise on a jobs bill, giving only lip service to his professed bipartisanship.
In testimony before the Senate Budget Committee, Office of Management and Budget Director David A. Stockman said there is "room in the budget" for limited forms of aid for areas of high unemployment, and other sources said Senate Republican leaders and White House officials have begun discussions about such a package. These talks, including a meeting Tuesday that was attended by Senate Majority Leader Howard H. Baker Jr. (R-Tenn.), Sen. Paul Laxalt (R-Nev.) and presidential counselor Edwin Meese III, revolved around adding humanitarian aid and a speedup of already scheduled public works jobs to the relatively modest anti-recession programs already in the budget, sources said.
Stockman's comments on recession relief--echoed by Martin Feldstein, chairman of the president's Council of Economic Advisers--came only a day after House Democratic leaders announced a three-pronged program of "relief, recovery and reconstruction," with quick action planned on an "emergency" package of job-creation and humanitarian aid. The comments were reminiscent of the conciliatory smoke-signals that came from White House officials last year before the administration finally agreed to budget changes, including tax increases, a modest cutback in defense spending plans and some concessions on programs for the poor.
But there was resistance as well as flexibility--along with some mixed signals--from these officials yesterday.
Only hours after Treasury Secretary Donald T. Regan indicated under pressure from House Budget Committee Chairman James R. Jones (D-Okla.) that a tax compromise "might be possible when we see what you want to compromise to," Feldstein said neither this year's third installment of the 1981 tax cut nor tax-indexing for inflation were negotiable.
"The president feels very strongly about indexing and the third year," he told Jones' committee. The Treasury Department also denied that Regan meant to hint at any tax compromise.
But, pressed on whether the administration might consider money for "soup kitchens" for the jobless, Feldstein told the Joint Economic Committee earlier in the day, "It's certainly something we should look into." He gave a similar response to questions about housing for the homeless and protection against home and farm foreclosures, two key items on the Democrats' agenda of options.
Stockman said that any aid would be short-term and limited in application, possibly to "the one-third or 20 percent or 15 percent of the country where it's clearly demonstrated that there is a need and that need is unmet."
On defense, Stockman said the administration would "listen" to any congressional proposals for spending cuts beyond $8 billion which Reagan put in the budget but warned that any "irrational hacking away" at military buildup plans could result in program stretch-outs that would only add to costs in the future.
At the House Armed Services Committee, meanwhile, even pro-Pentagon Chairman Melvin Price (D-Ill.) pleaded with Defense Secretary Caspar W. Weinberger to help the committee cut the defense budget rather than have it cut elsewhere, so that the forthcoming reductions will be imposed by the members who "know best how to do that."
Weinberger heard similar pleas in the Senate Tuesday. Price's statement was prompted, aides said, by the fact that the House and Senate Budget committees, together with the Appropriations committees, for the past two years have made the big decisions on deciding how and where to cut the defense budget; the Armed Services committees have been left out of the process.
In still other budget action yesterday, a group of farm-state Republicans and industrial-state Democrats led by Senate Finance Committee Chairman Robert J. Dole (R-Kan.) unveiled legislation to finance the processing and distribution of about $1 billion in surplus dairy, grain and other farm commodities to needy families.
Dole also said he is working on an alternative to the standby tax increases that Reagan has proposed for fiscal 1986 through 1988 and expects to have it prepared in about a month. He did not disclose details but said energy taxes are being explored along with others.
At the Senate Budget Committee, Stockman underwent withering attacks from Democrats, including conservatives who supported some of the administration's initiatives in 1981 and 1982, and heard firm assertions of dissatisfaction from Republicans.
"We have in my opinion the worst of all worlds in this budget . . . real cuts are not being made," complained Sen. Steven D. Symms (R-Idaho).