President Reagan yesterday declared war on a House Democratic budget proposal that would increase domestic outlays and cut his proposed defense spending boost in half, denouncing the plan as "a dagger aimed straight at the heart of America's rebuilding program."
The president said the Democratic budget proposal for fiscal 1984, which adds "an incredible $181 billion in domestic spending to what we've proposed," is "a reckless return to the failed policies of the past."
It is scheduled for a House floor vote on Wednesday.
Of the smaller Democratic increases in defense spending, Reagan said:
"Nothing could bring greater joy to the Kremlin than seeing the United States abandon its defense rebuilding program after barely one year."
Appearing later in the day at a White House meeting to sign the "State of Small Business" report to Congress with Vice President Bush and leaders of small business groups looking on, Reagan committed himself for the first time to veto any bill that repeals the third and last year of his tax cut or indexing of tax rates to inflation.
And, taking another shot at the Democrats, he added that their fiscal 1984 budget resolution would "not only gamble with the security of the United States, it would plunge us once again into the no-man's land of spend and spend and tax and tax."
A high White House official said Reagan seriously believes that he can defeat the Democratic budget proposals for a third straight year despite increases in the number of Democrats in the House. The aide said the president believes the budget "has gone too far left" to keep the support of moderate Democrats.
"Our troops are fired up to defeat it ," said one White House aide.
David A. Stockman, director of the Office of Management and Budget, who spoke to reporters after the president, said the White House sees no room for compromise with House Democrats on the budget resolution.
"In our judgment it boils down to a simple way of saying that Jimmy Carter's back, apparently as the chief budget officer for the Democratic Caucus in the House," Stockman said.
Neither Reagan nor Stockman mentioned strong Republican Senate objections to the president's proposed defense increases.
"That's not the issue here today," Stockman told reporters.
On Tuesday the president met with Pete V. Domenici (R-N.M.), chairman of the Senate Budget Committee, and got him to agree to delay markup of the Senate budget resolution by indicating that he may be open to some "flexibility" on the size of increases in the fiscal 1984 defense budget.
Responding to Reagan's blast yesterday, Rep. James R. Jones (D-Okla.), chairman of the House Budget Committee, said Republicans in the House and Senate do not support the administration's budget proposal.
"If Congress does not pass a budget this spring in my judgment there will be fiscal anarchy," he said. "This budget is not the product of the chairman or any single individual in the House. It's the consensus of Democrats who worked hard to choose between some hard choices on spending and taxes."
Rep. Richard A. Gephardt (D-Mo.), a senior member of the Budget Committee, denied Reagan's charge that the Democrats' budget resolution was the work of a Budget Committee "controlled by the liberal wing of the Democratic Party.
"We suspect he simply hasn't read it," Gephardt said of the budget proposal. "On a number of key points he is just wrong. I am not a liberal, Jim Jones is not a liberal and the budget is not a liberal document. It is as moderate as the American people."
Reacting to the president's contention that the Democrats would weaken the nation's defenses by slowing the rate of increase for defense spending, Jones said spending "$1.6 trillion instead of the administration's proposed $1.8 billion is not a minor amount."
Although he said he expects the Democratic proposal to be adopted, Jones said he suspects it will be a "close vote."
But he said it will take support from 84 percent of the Democrats to get the budget passed and "it is very hard to get 84 percent of Democrats to support anything."
The Democratic proposal would cut $9.3 billion from Reagan's proposed $30 billion increase in defense spending. It would provide a 4 percent increase in defense spending, less than half the 10 percent rise after inflation that Reagan is seeking.
The Democratic plan would add $26 billion for such programs as work incentives for the unemployed and legal services and would restore funds cut from food stamps, welfare and other social programs.
To fund this, the Democrats propose raising unspecified taxes to get an additional $30 billion in revenue, probably eliminating the 10 percent tax cut scheduled for July 1.
The Democratic budget resolution calls for $863.5 billion in spending for fiscal 1984 compared with Reagan's $848.5 billion. The Democrats' deficit would be $121 billion by fiscal 1988 compared with the $117 billion Reagan's budget projects for that year.
"The liberal wing of the Democratic Party has just come up with a truly dangerous budget proposal," the president told reporters in an unscheduled appearance yesterday in the White House briefing room.
"The so-called Jones' proposal is a declaration of war against the common-sense principles that are now rebuilding America. This isn't a step forward but a giant step backward into an economic quagmire.
"I'm not going to sit still for a proposal that makes a huge increase in taxes, guts our defense program, repeals many of the overdue welfare reforms that we have enacted and adds an incredible $181 billion in domestic spending to what we've proposed," Reagan said.
". . . The Democratic proposal would throw our budget savings out the window and turn the clock back to pre-1981 when domestic spending was soaring out of control and we had double-digit inflation and 20 percent interest rates."
Christopher Matthews, an aide to House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.), who was out of town yesterday, said that despite Reagan's protests the Republicans in the House have not introduced any alternative to the Democratic budget although they have the president's budget in hand.
"So far they have failed to offer any budget for fiscal year 1984 either in committee or for consideration on the House floor," he said.
Late yesterday afternoon President and Mrs. Reagan flew by helicopter to Camp David, Md., for the weekend, but a rainstorm prevented the helicopter from landing at the compound in the Catoctin Mountains. Instead, the helicopter landed at a high school playground in Thurmont, Md., and the president and his party were taken to Camp David in a motorcade.