The Senate, in what was billed as a critical test of its determination to enforce deficit reductions, approved across-the-board cuts in proposed spending last night for several major domestic agencies in order to come within budget targets approved earlier this year.
In a demonstration of the Republican Senate's preoccupation with high budget deficits, it overruled the Appropriations Committee by approving, 58 to 38, an across-the-board cut in discretionary spending for the Treasury Department, Postal Service and executive offices.
The $139 million cut in the $13 billion bill was relatively small but presages similar efforts to scale back appropriations bills viewed as likely to exceed deficit-reduction targets for actual spending in fiscal 1986.
The vote amounted to a victory for Budget Committee Chairman Pete V. Domenici (R-N.M.) and Lawton Chiles (Fla.), that panel's ranking Democrat. They promised to push for comparable across-the-board reductions in other target-busting money bills, starting with a cut of as much as $1.7 billion in the $55 billion appropriation for housing and related programs.
A vote on the housing bill had been scheduled last night but was delayed pending meetings next week on a compromise.
Domenici and Chiles warned that spending bills in the pipeline will fall $3.2 billion, or 40 percent, short of the congressional budget's goal of $8.3 billion in outlay savings from about $150 billion in nondefense discretionary accounts.
"I believe we're called upon to do a lot better than that," Domenici said. Not to do so would "make a mockery" of deficit reductions claimed in the congressional budget resolution approved last summer, Chiles said.
Loss of $8.3 billion from the deficit-reduction package would reduce it to $47.2 billion. Other major components of the original $55.5 billion plan include $29 billion in defense savings, $15 billion from entitlement programs and $3 billion from reduced interest on the national debt.
In response to the Domenici-Chiles charges, Appropriations Committee Chairman Mark O. Hatfield (R-Ore.) contended that his panel's bills are within limits for new budget authority, and he questioned validity of outlay estimates. "We're back in the same old situation . . . dealing with shifting goal posts when we try to deal with budget outlays," he said.
The problem arises from the difference between budget authority and outlays, a seemingly arcane point that can lead to monumental scraps on Capitol Hill.
Appropriators use budget authority to grant new funding for programs and projects that may stretch a year or more, while outlays measure only what is spent during a particular fiscal year. Outlays, while often difficult to predict precisely, are important because they are the relevant figures in determining deficits.
The Treasury-Postal money bill came within targets for budget authority but exceeded outlay targets by an estimated $125 million. To achieve those outlay savings, the bill had to be cut by $139 million in budget authority, amounting to a 2 percent cut in discretionary spending contained in the bill.
The Reagan administration supported the Domenici-Chiles effort, even though it originally raised no objection to the Treasury-Postal appropriations bill.
Responding to Hatfield's charge that outlay targets are like "shifting goal posts," Dominici cited the Budget Committee's "good track record" with estimates -- "certainly not over by 40 percent."
Appropriations bills are a major battleground in the fight over enforcement of deficit reduction. The other is "reconciliation" legislation under which entire programs are permanently cut to achieve long-term rather than annual savings.
On this front, Domenici said yesterday that legislative committees are expected to exceed their $19 billion quota, although he said some committees are "having a very difficult time."
Meanwhile, Treasury Secretary James A. Baker III told Congress that the government's cash balances will be "virtually exhausted" by Oct. 7, meaning Congress must act sooner than expected to raise the debt ceiling.
Senate Majority Leader Robert J. Dole (R-Kan.) said the $2 trillion debt limit will probably come to the floor next week, a week earlier than anticipated.