The White House yesterday denounced the bipartisan budget resolution narrowly passed by the Republican-controlled Senate late Thursday night as the intensely controversial tax-and-spending plan moved toward new mine fields, starting with a House-Senate conference next week.
With possible problems every step of the way, Congress now must try to find a middle ground on defense and domestic spending targets as well as tax increases for fiscal 1984 and perhaps two years beyond that.
It must also decide whether to treat the budget plan as mainly a statement of goals or commit itself to enacting legislation to carry it out in the face of threats by President Reagan to veto tax and spending bills that he deems excessive, a threat that he renewed yesterday in emphatic terms.
Even some senators who voted for the budget expressed doubt yesterday that Congress would make these implementing decisions, particularly on taxes, in a year leading up to presidential and congressional elections.
The Senate plan calls for tax increases of $73 billion over three years, starting with $9 billion next fiscal year and winding up with $51 billion in 1986, compared with a tax increase of $30 billion that the House would require for next year alone.
The Senate would pare Reagan's requested after-inflation defense spending increase from 10 percent to 6 percent; the House would put it at 4 percent.
The Senate would give Reagan $12 billion more in domestic spending than he wants; the House goes beyond his budget by at least double that amount.
The additional spending includes money for a 4 percent pay increase for federal workers, starting Oct. 1 under the House plan and April 1 under the Senate plan. Reagan proposed a pay freeze.
Under both plans, the 1984 deficits are high by historical standards: $178.6 billion under the $849.7 billion Senate budget and $174.5 billion under the $863.5 billion House plan.
But both congressional deficits are considerably lower than Reagan's projected deficit of $190.2 billion.
The question is not only what targets will be set but also what specific "reconciliation" instructions will be given to committees to meet the targets by cutting back spending programs and raising taxes.
On taxes, a cap of $500 to $700 on the 10 percent income tax cut scheduled for July is being pushed by many Democrats, along with repeal of "indexing" of tax rates to inflation thereafter.
But heavy resistance is expected, especially in light of Reagan's opposition to any tampering with his tax-cut program.
In a statement released as the president visited Miami, Reagan recalled that he said last Tuesday that he would veto any bills that threaten to "rekindle the fires of inflation and high interest rates," and added:
"I meant it then, and I mean it now."
Presidential spokesman Larry Speakes described the Senate-approved budget as "off target" on spending and taxes.
While "the House budget resolution is even worse," Speakes said, "two bad budgets don't make a good one."
As the dust settled from the tumultuous Senate session that culminated in a 50-to-49 vote to approve a budget that defied Reagan on taxes and spending, victors in each party agreed that a reluctant, severely torn Majority Leader Howard H. Baker Jr. (R-Tenn.) played a key role in paving the way for passage of the resolution.
Even though he voted against the resolution after working for a higher-deficit, lower-tax alternative that the White House supported and the Senate three times voted down, Baker made the key procedural motion that led to passage of the bipartisan plan.
Baker's move, coupled with the subsequent vote for the bipartisan resolution by an equally reluctant Budget Committee Chairman Pete V. Domenici (R-N.M.), plus help from Majority Whip Ted Stevens (R-Alaska), assured adoption of the budget, its backers said yesterday.
"I regard Sen. Baker as having been the key to the change when he simply said we had to have a budget," said Sen. Slade Gorton (R-Wash.), chief sponsor of the adopted compromise.
The turning point came when Baker "took the arm off" enough Republicans to get the budget passed, said Budget Committee ranking Democrat Lawton Chiles of Florida.
But it was a painful moment, forcing Baker and the others make a choice they had been trying for weeks to avoid: between Reagan and a budget. "It is essential, in my view, that we pass a budget resolution," Baker explained without fanfare.
"It was very difficult, as difficult as anything I've had to do," Domenici said yesterday, noting what he called "overwhelming sentiment on my side of the aisle" against the tax increases contained in the bipartisan plan.
The vote not only split most of the Republican leadership from the White House but also divided the Senate leaders.
Senate Armed Services Committee Chairman John G. Tower (R-Tex.), angry over the budget's cuts in the military buildup, was described as having been enraged by the action, shouting back over his shoulder as he left the chamber, "We're not a majority."
Finance Committee Chairman Robert J. Dole (R-Kan.), complaining that the resolution increases taxes more than it cuts spending, said the budget should have been defeated.
"If we can't cut spending, there's no reason to raise taxes," Dole said.
Domenici expressed doubt that the tax increases proposed in the Senate budget, let alone what the House proposed, could be achieved.
Dole added, "From my discussions with House Ways and Means Chairman Dan Rostenkowski, it is evident that tax increases of the magnitude accepted last night are not feasible anyway, and such a narrowly divided vote on the floor would indicate an inability to ultimately pass increases of that size."
As for the conference committee, which is scheduled to convene next Wednesday, Domenici said he sees "very, very little wiggle room" for Senate conferees in light of the difficulty the Senate had writing its own version in the first place.
But the House could have some problems in turn if the Senate holds firm to its numbers.
The House proposals, especially on social welfare spending, were a bottom-line for many Democratic liberals, who presumably will oppose any retrenchment to satisfy Senate Republican conservatives.
However, Rep. Leon E. Panetta (D-Calif.), a senior House Budget Committee member, said the House adopted its budget as a "bargaining position" for dealing with the Senate and indicated an accord is possible.
"It's my feeling the room is there to get a compromise that will pass both houses," he said.
Under congressional procedures, each house adopts its own version of the budget resolution, and differences are resolved in a conference agreement that takes effect after approval by both houses without presidential assent.
However, Reagan can veto legislation that is required to carry out the budget, which he is considered likely to do since both the Senate and House versions exceed what he wants in taxes and spending.
But Gorton contended yesterday that Reagan, despite his repeated veto threats, may be persuaded to sign a tax increase if it is packaged with spending cuts that he wants, such as those proposed for Medicare and pensions.
The president, he said, may "find that taking all of it [the Senate budget] is better than getting nothing."