The Republican-controlled Senate Budget Committee yesterday spurned President Reagan's proposal for a "freeze" on domestic spending as it voted tentatively to add nearly $6 billion to his fiscal 1984 budget for programs ranging from housing to transportation.
Chairman Pete V. Domenici (R-N.M.) warned the committee that it will "have to tighten up when we see the big picture," apparently meaning that spending reductions can be expected after the panel sees the deficit implications of its actions.
Initial agreements between Republicans and Democrats indicated at least tentative progress toward a bipartisan budget that would depart substantially from Reagan's blueprint of domestic and military spending.
The departure on defense came last week, when the committee took a big bite out of Reagan's proposed military buildup by voting, also on a bipartisan basis, to reduce from 10 percent to 5 percent his proposed increase in defense spending after accounting for inflation.
Facing action today are most of the big, costly entitlement programs, with Republicans looking for Democratic cooperation in controlling soaring costs.
The committee then will tackle the equally sticky question of taxes, with Democrats pushing for more increases than Reagan wants, although ranking committee Democrat Lawton Chiles (Fla.), in what appears to be another gesture of bipartisanship, has indicated that the July income tax cut probably will escape repeal.
While bipartisan budgeting could founder on entitlements or taxes, Democrats are having a greater impact on the committee's budget-making than in the first two years of the Reagan administration, in part because Republicans are divided and Democratic votes are needed for passage.
As of yesterday, the committee had added $5.9 billion to Reagan's domestic spending request for fiscal 1984, which more than gobbled up last week's $3.3 billion in defense outlay savings.
Reagan had proposed an aggregate "freeze," meaning cuts in many programs, and the committee's actions would restore much of the money. Overall spending approved thus far would more than accommodate a projected 4 percent inflation rate.
The committee ignored Reagan's demand that money in the $4.6 billion jobs bill passed by Congress last month be offset by other spending reductions. Instead, it simply allowed room in the budget for increased spending.
It scuttled his proposal for deep cuts in rural housing programs, probably killing his plan to turn them into a block grant to the states, and restored money he would have cut for housing for the elderly. It added about $1 billion for housing and commerce programs, including postal subsidies he would have sharply reduced.
It kept current spending levels for transportation, in effect continuing mass transit operating subsidies that Reagan wants phased out. It also allowed for continuation of the Legal Services Corp. and juvenile justice grants, both of which Reagan wants eliminated.
It agreed with some controversial Reagan proposals, such as elimination of the Economic Development Administration and non-highway programs of the Appalachian Regional Commission, although, if history is any guide, Congress will find money to continue them.
In earlier actions, the committee had expanded Reagan's budget request by $300 million for energy, $1.9 billion for natural resources and environment programs--including increased funding for the troubled Environmental Protection Agency--and $700 million for agriculture.
The add-ons prompted a complaint by committee member William L. Armstrong (R-Colo.) that Reagan's budget anticipated cumulative deficits of $1.3 trillion over the next five years and, "Here is the Senate Budget Committee, in a cheery frame of mind, pumping in more money . . . ."
On foreign aid, the committee gave Reagan what he wanted under a bipartisan compromise that did not deal conclusively with the administration's request for more military aid to El Salvador this year.
The compromise included $12.7 billion for foreign aid and related programs next year and allowed for $800 million in additional foreign aid during the current fiscal year, or $70 million less than requested.
The proposal also assumed congressional approval this year for an $8.5 billion increase in the United States contribution to the International Monetary Fund to help bail out economically failing nations.
Also yesterday, the administration predicted that the fiscal 1983 deficit will be $210.2 billion, up $2.5 billion from the January projection. The Office of Management and Budget, in a revised set of budget projections, also estimated that the fiscal 1984 deficit will be $190.2 billion, an increase of $1.4 billion over the last estimate. But the OMB said a brighter economic outlook will lower the deficit from previous expectations in later years. CAPTION: Picture, Sens. Moynihan, Chiles, Domenici, Gorton and Kassebaum at meeting, during which panel voted to add $6 billion to Reagan budget. By James K.W. Atherton -- The Washington Post