With Vice President Bush breaking a tie vote, the Senate early today tentatively approved a compromise plan to cut next year's budget deficit by $56 billion after President Reagan agreed to slash his defense spending request, freeze Social Security benefits and preserve programs ranging from Amtrak to the Job Corps.
The 50-to-49 victory for the Republicans came after Sen. Pete Wilson (R-Calif.), hospitalized Wednesday for removal of a ruptured appendix, was wheeled into the chamber amid applause to cast the decisive vote setting up the tie for Bush to break.
The vote was basically along party lines, with only one Democrat, Sen. Edward Zorinsky (Neb.), voting for the plan, and Republicans Alfonse M. D'Amato (N.Y.), Paula Hawkins (Fla.), Charles McC. Mathias Jr. (Md.) and Arlen Specter (Pa.) voting against it.
By reducing spending by a cumulative total of $295 billion over three years, the accord would meet the Republicans' goal of reducing deficits, now more than $200 billion a year, by half by fiscal 1988.
But the plan was still open to amendment, and Democrats quickly attempted to strip it of several controversial items, starting with the Social Security freeze, which was upheld, 51 to 47.
The defense compromise was nailed down after Reagan, in a dramatic retreat from his earlier proposal to increase military spending next year by 6 percent above inflation, agreed to boost it by no more than necessary to keep pace with inflation, according to Senate and White House officials.
Less than a week ago, Reagan accused the Senate of an "irresponsible act" when it approved the zero-growth proposal in a rebellion against an earlier compromise for a 3 percent increase after inflation, which Senate Republican leaders had negotiated with the White House.
Under the new compromise, spending authority for defense would rise from $292.6 billion to $302.5 billion in fiscal 1986. Reagan had requested $322.9 billion. Increases of no more than 3 percent over inflation would be allowed for fiscal 1987 and 1988.
Deficit reductions from defense would total $18 billion over the three-year period.
However, even with zero-growth for next year, defense spending increases would amount to an average of 6 percent over inflation since Reagan began his military buildup after taking office in 1981, according to figures compiled by the Senate Budget Committee.
The new pact with Reagan, confirmed by Senate Majority Leader Robert J. Dole (R-Kan.) and White House officials gathered in Dole's office to lobby for passage of the accord, came as Senate GOP leaders struggled to fine-tune the accord to win over enough wavering senators to pass it.
In a home-stretch push, Reagan made phone calls from Lisbon to urge fence-sitters to vote for the latest compromise. Among those who received calls from Reagan were Democrats John C. Stennis (Miss.) and Howell Heflin (Ala.).
Shuttling between the Senate floor and private deal-making sessions in his office with Democrats as well as Republicans, Dole kept the Senate working late into the night in order to finish its arduous, four-month struggle to put together enough spending cuts to reduce deficits by half to about $100 billion within three years.
Before nailing down the last few details, Dole appeared to be in danger of losing a half-dozen Republican votes through defections and illness, enough to jeopardize passage of the plan because Republicans control the Senate by only 53 to 47. Hence Dole had to bargain for support of Democratic conservatives as well as Republican defectors, who were balking at issues ranging from Social Security to rural housing.
The roll call appeared likely to be so close that Bush had been summoned back from a speaking engagement in Phoenix in case his vote was needed to break a tie.
Wilson's hospitalization had complicated Dole's painstaking quest for votes, already set back by the hospitalization of Sen. John P. East (R-N.C.) for treatment of a severe thyroid problem. But it eased a bit yesterday as the Democrats also lost a vote when Sen. J. James Exon (D-Neb.) was hospitalized for gall-bladder surgery.
Deficit reductions in the final compromise were slightly larger than those in the earlier agreement, which the Senate has been methodically dismantling over the past two weeks, largely by adding to domestic spending while cutting defense.
The shredding operation continued yesterday even as Dole and White House officials were trading dollars for votes on the final version. In a series of largely symbolic votes, senators pushed to salvage funding for their pet projects on the Senate floor in order to increase their bargaining leverage in the backrooms.
In one key vote, the Senate agreed, 53 to 41, to cut federal subsidies for the Amtrak rail passenger service by 10 percent, from $684 million to $616 million, instead of scuttling the whole system, as Reagan had proposed. But the relatively close vote made it easier for GOP leaders to insist on cuts above 10 percent in the final round of bargaining, sources said.
In another critical vote, the Senate went along with its leadership, 52 to 44, in shelving a proposal to save but freeze regional development programs such as the Economic Development Administration (EDA), the Appalachian Regional Commission (ARC) and Urban Development Action Grants (UDAGs).
In a vote on the largest remaining stumbling block in the backroom negotiations, the Senate rejected, 50 to 47, a proposal to preserve but cut by 20 percent the rural housing program. The compromise on rural housing restored about one-third of the spending.
By day's end, a tentative list of programs that would still be terminated, as Reagan requested, included EDA, ARC, UDAG, revenue sharing with local governments, Export-Import Bank direct loans, small business loans, community service block grants, work incentive assistance and several smaller programs.
Those for which funding would be cut but not eliminated included Amtrak, the Job Corps, rural housing, mass transit subsidies, rural electrification, impact aid to school districts with large numbers of federal workers, the Small Business Administration and postal subsidies.
Sources said a tentative compromise on Amtrak would cut funding by 15 percent next year and 40 percent over three years, which Amtrak supporters said would keep the trains running, especially in the Northeast corridor, although probably at reduced levels of service. The Job Corps would be cut 30 percent and mass transit operating subsidies 20 percent; Reagan had proposed termination of both.
Proposed cuts in the student loan program were modified. A limit of $8,000 on subsidized loans was eliminated, but subsidies would be excluded for families with annual incomes exceeding $60,000.
To win the support of Farm Belt senators, proposed cuts in agricultural support programs were also modified, reducing proposed three-year savings of more than $18 billion by about $3.5 billion.
Funds were restored for crop insurance and soil and water conservation, and money for loan guarantees was increased, including funds to write down interest costs that Reagan had opposed in a dispute over emergency farm aid earlier this year.
Reagan had already agreed in the earlier compromise to limiting cost-of-living increases for Social Security under a formula that would cut the increases by roughly half over the next three years. But this formula was rejected by the Senate, and the new agreement would impose a one-year freeze, with full inflation adjustments to be paid in future years.
The one-year freeze of Social Security benefits, coupled with similar treatment of other government pension programs, would save about $34 billion over three years, roughly the same as the earlier proposal. But, under the freeze plan, the immediate savings would be greater, and the impact in future years would be less drastic.
Reagan had vowed during last year's campaign not to reduce Social Security benefits and later broadened the promise to include the cost-of-living adjustments. Administration officials had defended the earlier proposal as a "guarantee" of some inflation protection each year, a defense than cannot be made on behalf of the one-year freeze.
The new agreement with Reagan also reportedly reflects modifications that the Senate approved earlier in the president's plan to cut back Medicare and Medicaid costs. The modifications eliminated a proposed "cap" on federal contributions to the Medicaid program and reduced but did not eliminate proposed increases in out-of-pocket costs paid by Medicare beneficiaries.
In other votes yesterday, the Senate rejected, 70 to 27, an across-the-board spending freeze that would have blocked inflation adjustments for tax rates. It voted to restore some funding for child nutrition programs but rejected a move to restore funding that Reagan wanted to cut from veterans health and pension programs.
As the session continued into the night, the Senate, eager to get to a final vote, also rejected proposals to restore varying amounts of funding for revenue-sharing, impact aid, Medicaid and mass transit. After some arm-twisting by Republican leaders, it also rejected, 49 to 47, a proposal to finance restoration of Medicare cuts that would be borne by beneficiaries by retaining an 8-cents-a-pack cigarette tax increase due to expire this year.