House-Senate budget conferees neared agreement yesterday on a sharp reduction in President Reagan's military buildup for next year after getting off to a bumpy start with a dispute among Republicans over Reagan's threatened use of vetoes to impose fiscal discipline on Congress.
While stopping short of agreement, the conferees appeared close to an accord on defense that would give Reagan about half, perhaps slightly more, of his proposed increase of 10 percent after accounting for inflation.
The dispute among Republicans flared shortly after the conference on the fiscal 1984 budget opened on an upbeat note from leaders of both House and Senate bargaining groups, who indicated they were more optimistic than before about reaching an agreement that could pass both houses.
It was triggered when Rep. Ed Bethune (R-Ark.), reflecting the view of many Republican conservatives in the House, suggested the budget deliberations may be "irrelevant and a waste of money" if Reagan cannot live with the final product and chooses instead to veto tax and spending bills that defy his program.
"He's going to have to be the force because we've failed miserably," Bethune said.
Bethune was promptly challenged by Senate Budget Committee Chairman Pete V. Domenici (R-N.M.), who questioned the veto strategy and asserted that the administration shares blame with Congress for spending increases that have led to big deficits.
"I don't think we're literally going to control fiscal policy with vetoes," said Domenici, claiming that big savings the administration wants in mandatory spending programs like Medicare and federal retirement can be achieved only through legislative enactments, not vetoes.
The Bethune-Domenici split represents an increasing schism in GOP ranks between those who seek budget compromise and those who advocate a hard-line veto strategy to any protect the full dimensions of Reagan's tax and spending cuts.
Feathers also have been ruffled among Senate Republicans by White House veto threats against a GOP-drafted supplemental appropriations bill for this year. Reagan's senior advisers earlier this week urged a veto on grounds that the measure would spend more than $1 billion more than the administration wants for domestic programs, but backed off in meetings yesterday.
Both the $863.5 billion House budget bill and the $849.7 billion Senate version call for more domestic spending and tax increases, and less defense spending, than Reagan wants. But the House departs more from the script than the Senate.
An agreement on defense between the Senate's proposed 6 percent increase and the House's 4 percent increase--which the Congressional Budget Office says represents a 2.3 or 2.8 percent increase--is expected to be less difficult to achieve than compromises over taxes and domestic spending.
On taxes, sources said the conferees are expected to wind up closer to the Senate proposal for an increase of $9 billion next year than to the House proposal for a $30 billion increase, but no agreement has been reached. Nor has any accord been reached on their roughly $20 billion difference on domestic spending.