White House officials yesterday suggested selling more government loan portfolios and other federal assets to raise revenues for deficit reduction without increasing taxes. They ran into a chilly response from Republican-led Senate negotiators who intend to keep pushing for tax increases to finance more defense spending.
"Talk of cooperation [between the White House and Senate] has to do with asset sales, and I'm not thrilled about that," said Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) after a meeting between bipartisan Senate budget leaders and a White House delegation led by chief of staff Donald T. Regan. Sen. Lawton Chiles (Fla.), ranking Democrat on the committee, indicated agreement with Domenici.
The meeting came as House and Senate budget bargainers drafted possible compromises -- including conflicting approaches to the key issues of taxes and defense spending -- for presentation at a negotiating session this morning.
The Senate plan would tie additional funds for the Pentagon to tax increases, permitting release of the funds only if a bill raising taxes becomes law.
House conferees said a tentative version of the House proposal would exclude tax increases in excess of President Reagan's revenue-raising proposals, thereby eliminating most of the cushion the House approved earlier to help guarantee that compliance with the Gramm-Rudman-Hollings deficit target of $144 billion for fiscal 1987.
It would continue to freeze defense spending authority, while providing room for some increase in actual outlays for defense to help deal with objections that outlays have been underestimated in both budgets.
Several House Democratic negotiators said the Senate proposal to raise taxes for defense is unacceptable, especially in light of Reagan's strong reiteration of opposition to tax increases during his news conference Wednesday night.