President Reagan and Congress are at odds over most key legislation as the House and Senate return today from a Thanksgiving recess to face important work that must be done before the lawmakers can go home for Christmas.
Seldom in recent years have the White House and Congress had so many issues -- and so much major legislation -- in dispute as the two branches of government struggled to wrap up chores for the year.
At stake are the president's leading domestic initiatives for the first year of his second term: tax revision and deficit reduction. The administration has serious reservations about two major deficit-reduction measures and has had second thoughts about backing a tax-overhaul plan drafted by the House Ways and Means Committee.
"I'd say there are a boatload of problems and a boatload of differences between the White House and Congress," said Senate Budget Committee Chairman Pete V. Domenici (R-N.M.). "It's kinda grim-looking, no question about it," said a House Democratic leadership aide.
The disputes center on budget "reconciliation" legislation that constitutes the centerpiece of a three-year deficit-reduction effort, Gramm-Rudman-Hollings legislation to eliminate deficits within five years, defense and domestic spending levels for the current fiscal year, major overhaul of farm programs and extension of the "Superfund" toxic-waste cleanup program.
In addition, the Ways and Means Committee did some major surgery on Reagan's tax-overhaul plan, presenting the president with the distasteful choice of going along or risking loss of his tax-revision initiative this year.
While Reagan has not made a point of veto threats, one or more veto confrontations are considered possible over the next couple of weeks.
But there are mid-December deadlines for action on some of the measures, including the spending bills and a debt-ceiling extension that is tied to the balanced-budget legislation. Shutdown of the government and financial default could result if the fiscal measures are not passed on time. This gives the administration extra leverage in a veto fight but raises the risk of major governmental disruptions.
Congress, which earlier hoped to adjourn for the year by mid-October, is now scheduled to quit by Dec. 13, the day after most of its fiscal deadlines. But there is increasing fear among lawmakers that they will be lucky to get out of town before the Christmas travel rush.
The knottiest problem for Congress and the White House is the balanced-budget plan that was attached by Sens. Phil Gramm (R-Tex.), Warren B. Rudman (R-N.H.) and Ernest F. Hollings (D-S.C.) to legislation raising the debt ceiling to more than $2 trillion so the government can continue borrowing to pay bills. A temporary increase expires Dec. 12.
A House-Senate conference committee is reportedly near agreement on a compromise that would force spending cuts, evenly divided between defense and domestic programs, if Congress and the White House fail to reach annual targets aimed at reducing deficits from $200 billion to zero by fiscal 1991. An initial cut of at least $10 billion would probably be ordered for early next year.
But major differences remain on a variety of issues, including House demands for exclusion of some major social-welfare programs from the automatic cutbacks. Even if those issues can be resolved, the size and structuring of defense spending cuts is a problem for the administration.
While Reagan endorsed the original Senate version of the bill, Republican-led Senate negotiators have made major concessions to the House, including an offer to exempt some poverty programs from cuts.
House Democrats say one reason the two chambers are now so close to agreement is that Senate Republicans, miffed by back-of-the-hand treatment from the White House in an earlier budget dispute, are no longer rigidly holding the line for the administration on defense and other issues.
Almost lost in the turmoil over Gramm-Rudman-Hollings is this year's budget "reconciliation" bill, an amalgam of program cutbacks and tax increases that would reduce deficits by more than $80 billion over three years. Together with other savings, mainly from annual appropriations, the three-year savings would amount to $276 billion, starting with $55 billion this year. This would cut the deficit by nearly half, to $112 billion, by fiscal 1988.
The House and Senate have approved the legislation in somewhat different form, and conferees are expected to begin work shortly on a compromise. But the White House is objecting to key provisions of both measures, especially revenue-raising proposals, including retention of the 16-cents-a-pack tax on cigarettes, which will drop back to 8 cents without congressional reauthorization. Administration officials also have scoffed at many of the claimed savings.
In addition to the possibility of a veto, there is some talk on Capitol Hill of shelving the reconciliation bill and waiting for early 1986 spending cutbacks under Gramm-Rudman-Hollings. But budget experts say they fear that deficits would then be so high that the future deficit-reduction targets would be unreachable.
Another potential source of concern for the White House is a $480 billion continuing resolution to fund departments and agencies that have not received their regular fiscal 1986 appropriations -- meaning most of the government, including the Pentagon. Congress has given final approval to four of its 13 spending bills, and Reagan vetoed one, the treasury-postal bill.
Defense spending is unlikely to reach the minimum demanded by the Pentagon, and the administration has contested some domestic-spending components that are likely to be included.
An earlier continuing resolution expires Dec. 12, putting the omnibus spending bill under the same deadline pressure as the debt-ceiling and balanced-budget legislation.
Meanwhile, conferees are expected to begin work this week on a compromise between House and Senate farm bills, both of which are viewed as unacceptably generous by the administration, which wanted more of a cutback in government support programs.
The House this week will consider a bill extending the Superfund, which includes broad-based industry taxes that the administration opposes. The Senate has approved a Superfund bill with tax provisions opposed by the administration.
The tax-code overhaul bill approved a week ago by the Ways and Means Committee is in limbo, as far as the White House is concerned.
Caught in the midst of conflicting advice from within his administration, Reagan has not decided whether to endorse it. He is scheduled to meet Tuesday to discuss it with Republican congressional leaders. Most House Republicans are expected to caution against an endorsement, and Senate Majority Leader Robert J. Dole (R-Kan.) has displayed little enthusiasm for the bill in any form. But Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) has reportedly told the White House that tax reform cannot pass the House without administration backing.