The Senate last night decisively rejected a proposed one-year freeze on defense as well as domestic spending as it moved haltingly toward action on a less drastic plan, endorsed by President Reagan, to cut deficits by $144 billion over the next three years.
The vote was 65 to 33 against the freeze proposal, which would have cut deficits through fiscal 1987 by about $260 billion, or nearly double the figure for the plan that was worked out earlier in the year by White House officials and Senate Republican leaders.
The proposal, sponsored by Sens. Charles E. Grassley (R-Iowa), Nancy Landon Kassebaum (R-Kan.), Joseph R. Biden Jr. (D-Del.) and Max Baucus (D-Mont.), had been viewed as the strongest threat to the Reagan-backed plan because of the dramatic simplicity of its across-the-board impact.
But that may have been its fatal flaw as conservatives rebelled at the deep cuts it would have made in Reagan's military buildup, liberals balked at the constraints it would have put on major domestic benefit programs such as Social Security and many moderates shuddered at both results.
More Democrats than Republicans supported the freeze, but it was opposed by a majority of both parties. All Washington-area senators voted against it.
The plan wound up with fewer votes than a modified freeze proposal, sponsored by Sens. Ernest F. Hollings (D-S.C.) and Mark Andrews (R-N.D.), that the Senate rejected by a vote of 57 to 38 on Tuesday.
Nonetheless, Senate sources said White House officials were sufficiently worried about the plan's chances earlier in the day that they had the president call wavering conservatives from Air Force One en route back to Washington from China. At least some of them ended up voting against the freeze.
In a dramatic last-minute switch, Senate Appropriations Committee Chairman Mark O. Hatfield (R-Ore.) voted for the freeze, even though he had committed himself to the White House-backed plan. It was understood he did so, as an expression of personal preference for defense spending cutbacks, only after it was clear that the freeze was dead.
In a day-long debate on the plan, opponents contended it would savage Reagan's military buildup, while proponents described it as Congress' "last best chance," as Biden put it, to keep deficits from undermining the economic recovery and dropping the country into another recession.
Unlike other so-called freeze proposals that included numerous exemptions, the freeze plan that was before the Senate yesterday was virtually free of loopholes.
Defense spending authority would have been restricted to the current year's level of $264 billion, which is nearly $50 billion less than Reagan originally requested and $35 billion less than he endorsed in the compromise with Senate GOP leaders. Because no allowance was made for rising inflation costs, critics said the plan would have meant a 6 percent cut in actual defense programs.
For domestic spending, the plan proposed no more than current spending for all discretionary programs and would have eliminated cost-of-living increases for one year from all benefit entitlement programs, including Social Security. It would have frozen federal pay, farm price supports and health service costs at current levels.
Over three years, the plan proposed to cut $121 billion from defense and $61 billion from domestic spending. By contrast, the Reagan-backed plan called for reductions of $40 billion in defense and $37 billion in domestic programs.
While the defense and Social Security freeze were regarded as especially controversial, proponents argued that the political risks in these areas were outweighed by the need to shore up the economic recovery by cutting deficits dramatically.
But Armed Services Committee Chairman John G. Tower (R-Tex.) and Sen. Ted Stevens (R-Alaska), chairman of the Appropriations subcommittee on defense, contended that a defense spending freeze would reverse the current buildup and wind up costing more in the end.
"This is a 180-degree turn," said Tower. "What we are doing is changing national security policy" to satisfy a political demand for lower deficits, he said, adding acerbically: "We're talking now about something that's politically expedient to do."