The chairman of the House Budget Committee warned yesterday of the danger of "a bidding war" between the political parties that could balloon the cost of an anti-recession jobs program.
At the same time, the chairman, Rep. James R. Jones (D-Okla.), predicted that the House will give President Reagan barely half the increase in defense spending he is seeking next year, sacrificing some weapons systems.
At a luncheon with reporters, Jones said the budget could accommodate a $5 billion to $7 billion jobs bill, "if it is done correctly," but said the program should concentrate on "education and training for permanent jobs."
His comments came as House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) announced that Office of Management and Budget Director David A. Stockman had requested a meeting with him later this week to outline Reagan's ideas on a jobs bill. The speaker said he assumes that means there is a proposal that "has the approval of the president."
Reagan said yesterday that he wants to accelerate some already approved public works projects, and other administration officials said this is what Stockman will discuss with O'Neill.
Speaking to Washington-area television anchormen, Reagan said the accelerated work on federal projects is different than the "make-work" jobs he has objected to in proposals by Democrats.
"That will be legitimate work," he said of the administration plan. "It isn't make-work if you simply stimulate or move up or accelerate a program of necessary public works."
The president also hinted that economic recovery, or lack of it, will be a factor in his decision whether to seek another term. ". . . Yes, I would think that that would be--if there's no recovery, obviously that would be a sign," Reagan said.
Jones said the Democratic majority on the Budget Committee will approve a growth in defense outlays for fiscal 1984 of "not more than 5 percent" above inflation, "and it could be less." Reagan has asked for more than a 9 percent real growth.
Jones conceded that at the level of spending he foresees, "we would have to cancel some weapons programs and stretch out others," but he insisted that can be done without "taking risks" with national security. He would not identify the vulnerable programs, but said the committee will name specific targets for cuts when it drafts the budget in mid-March.
Jones' comments were regarded as signficant because the Tulsa lawmaker has a reputation as a moderate on defense and budget issues.
Jones said he believes the economic recovery now beginning could go for a couple years at 5 or 6 percent real growth--significantly higher than the administration is predicting--if the Federal Reserve Board adopts an "accomodative policy."
To balance a more expansionist monetary policy, Jones said, Congress would have to limit deficits in the years beginning in 1985.
His preferred mix of measures would include:
Postponing this summer's scheduled 10 percent tax cut for up to three years and canceling the indexing of tax rates scheduled to start in fiscal 1985.
Trimming the growth of most entitlement programs by pegging cost-of-living formulas two or three points below inflation. Jones said means-tested programs such as Aid to Families with Dependent Children should be exempt, because "the needy have sacrificed enough."
Those changes, along with reduced defense outlays and some cutbacks in domestic discretionary programs, would be sufficient to bring the budget into balance by 1987 or 1988 if the economy settles into a steady 4 percent growth rate after a faster comeback from the recession.
He said he believes most House Democrats would support such a program as a demonstration that the party has "the credibility to govern again."
But he conceded that he is "concerned we may get into a bidding war" between the political parties and between Congress and the administration over the size of the anti-recession jobs program, "as we did on the tax bill two years ago." That would hurt the Democrats, who now stand to get credit for pushing Reagan into realizing the need for such a program, he said.
Also yesterday, the president said "it isn't that big a sacrifice" to ask federal employes to forego a pay raise this year. "We thought that asking government employes, all across the board, to take a freeze in increase in pay was not too much when you stop to think the sacrifices being made out there in the private sector," he said.
Meanwhile, Sen. Edward M. Kennedy (D-Mass.) is drafting an "emergency" anti-recession package of about $7 billion which, according to aides, would include $5.7 billion to create more than 750,000 jobs, $1 billion for retraining and $600,000 for emergency food and shelter.
Kennedy, ranking Democrat on the Senate Labor and Human Resources Committee, plans to introduce the legislation next week both for consideration by the committee in drafting jobs legislation later this month and for use of Senate and House Democratic leaders in drafting a unified party position on jobs, aides said.
The jobs-creating part of the Kennedy plan would provide $3.5 billion for community development block grants to state and local governments to hire 350,000 of the longterm unemployed for jobs ranging from street repairs to day care for children, $200 million for another 20,000 day-care jobs, $1 billion for 300,000 part-time and summer jobs for young people, $200 million for 40,000 jobs for older people, $700 million for 50,000 energy-related jobs and $100 million for 10,000 jobs in rural development.
Kennedy's plan does not include additional public works jobs that may be proposed by the Senate Environment and Public Works Committee, aides said.