The Republican-controlled Senate, acknowledging that the country still suffers lingering effects of the recession, voted 90 to 9 yesterday to allow room in next year's budget for $1.8 billion to provide health insurance for unemployed workers through 1985.
As it continued work on its version of the congressional budget for next year, the Senate also tentatively approved, 50 to 46, a Republican-sponsored proposal to add $400 million to education spending next year.
Both Republican moves were aimed at heading off more costly alternatives pushed by Democrats. But they still resulted in an increase in domestic spending levels that the Reagan administration says are already too high.
The Senate did reject, however, 63 to 34, an even bigger add-on to the budget: a proposal to spend $8.6 billion through 1986 to restore 13 weeks of extended unemployment benefits in 29 states.
These actions came as Senate Republican leaders edged closer to introduction of their tentative budget substitute, even though they still lack the votes to pass it because of moderate Republicans' objections to its low taxes and high deficits.
They shared the plan with the Democrats in hopes of getting a bipartisan time agreement to complete work on the budget by the middle of next week. Even though some of them are eager to take off for the Kentucky Derby this weekend, the Democrats refused to limit their debate time until the Republicans showed them their proposed compromise.
After seeing the Republican plan, Sen. Lawton Chiles (D-Fla.), ranking Democrat on the Budget Committee, said that, by not locking in tax increases, the plan would produce deficits exceeding $200 billion in the late 1980s and would "totally abort the recovery."
In its current form, the Republican plan bows to Reagan's demand for no major tax increases over the next two years, but trims his defense buildup and gives him $11 billion more in domestic spending than he wants. It is more acceptable to Reagan than the plan approved by the Budget Committee, which would cut defense more deeply and require more than $120 billion in tax increases over the next three years.
Though Majority Leader Howard H. Baker Jr. (R-Tenn.) said as the Senate convened yesterday that he remained "optimistic we'll put something together," there appeared to be little if any progress in cloakroom chats with the Republican dissidents yesterday.
If Baker fails to nail down 51 Republican votes for the plan, it could be opened for amendments on the floor, testing, among other things, whether the Democrats can unify behind the tax increases they claim to support.
The Senate approved the health insurance money, as proposed by Finance Committee Chairman Robert J. Dole (R-Kan.), after rejecting a more costly alternative proposed by Sen. Edward M. Kennedy (D-Mass.) along the lines of a plan under consideration in the Democratic-controlled House.
Similarly, in approving a $400 million increase in proposed education spending of $14.9 billion for next year, it shelved a proposal from Sens. Ernest F. Hollings (D-S.C.) and Robert T. Stafford (R-Vt.) for an increase of $1.5 billion. But Hollings indicated he will try again for a larger sum, and Republicans conceded that the vote could be close.
Kennedy's health insurance plan, which would have cost $2.7 billion a year, was rejected by a vote of 63 to 36.
Although Dole's insurance proposal would increase outlays by $1.8 billion, including $200 million during the current fiscal year ending Sept. 30, Dole assured the Senate there will be offsetting revenue increases or spending cuts to accommodate administration objections to deficit increases.
Also, Dole said, the program would be limited to two years, thereby easing qualms of the administration and Senate conservatives about creating a permanent new benefit entitlement program.
Endorsing Dole's proposal, Budget Committee Chairman Pete V. Domenici (R-N.M.) cited "broad bipartisan support for addressing this problem" of millions of workers who lost their job-related health insurance coverage when they lost their jobs.
But he said Congress "ought to crawl before we go off running," noting how the costs of Medicaid and Medicare have far outstripped original estimates.
The health insurance provision in the budget only sets a target figure for costs. It does not spell out details of the legislation, which is under study by the Finance Committee.