Congress last night ended a months-long stalemate over deficit reductions from last year as the House approved, 230 to 154, a White House-blessed Senate measure to cut spending and raise taxes by an estimated $18 billion over the next three years.
The bill, containing about one-quarter of the savings originally proposed, makes the federal cigarette tax permanent at 16-cents a pack, bails out the tobacco price-support program, allocates Outer Continental Shelf oil and gas revenues, cuts Medicare reimbursement costs and revamps many other federal programs.
With tobacco-state lawmakers breaking the deadlock in order to assure passage of the legislation in some form, the House had to give up its demand for extension of welfare benefits to two-parent households. It also had to accept a provision tucked into the measure by Senate Finance Committee Chairman Bob Packwood (R-Ore.) to give Oregon hospitals special treatment in Medicare reimbursements.
Meanwhile, the budget for fiscal 1987 that was proposed Wednesday by the Senate Budget Committee ran into problems from Republicans but was hailed as a "good start" by the chief budget-writer for House Democrats.
The White House continued to criticize the committee's plan for proposing to raise taxes and curtail defense spending, while spurning many of President Reagan's proposals for domestic spending cutbacks.
Senate Majority Leader Robert J. Dole (R-Kan.) held the plan at arm's length -- refusing to endorse or reject it -- and indicated that he may postpone Senate action on it until he can consult with the White House and his GOP colleagues.
House Minority Whip Trent Lott (R-Miss.) repudiated the budget proposal, calling it a "pathetic effort" to restrain domestic spending, a "devastating blow" to defense and a "quenching of some senators' insatiable thirst for tax increases."
But House Budget Committee Chairman William H. Gray III (D-Pa.) called it an "innovative approach . . . a good start" and indicated that it could be a model for a congressional compromise if Reagan "indicates in some way" he supports the committee's tax proposals.
However, Gray is wary of how the committee's proposal may fare in the Senate and said he will not schedule action on a House budget draft until after the Senate acts. The Senate Budget Committee had been expecting Senate action next week, but Dole indicated yesterday that action could be delayed until after the Easter recess ends April 7.
The Senate panel's proposal, drafted jointly by Republicans and Democrats and approved Wednesday by a bipartisan vote of 13 to 9, departs radically from Reagan's priorities in meeting the Gramm-Rudman-Hollings deficit target of $144 billion for fiscal 1987. It would cut Reagan's defense spending request by $25 billion, raise taxes by $18.7 billion and limit nondefense spending cutbacks to $14.6 billion, roughly half what Reagan proposed.
Democrats on the House budget panel are working on an alternative that seeks to meet the target by deeper defense spending cuts but without revenue increases beyond minor ones proposed by Reagan. Some members suggested that cuts in domestic as well as defense spending will prove to be so painful that a tax increase will become inevitable.
Several said they will not be surprised if the House budget closely resembles the Senate plan.
"What we're finding is that getting to $144 billion is doable but very, very painful," said House Budget Committee member Charles E. Schumer (D-N.Y.).