A Democratic-controlled House-Senate conference committee yesterday approved a compromise $1 trillion budget for next fiscal year that was immediately denounced by President Reagan as "an offer I can refuse."
The budget for fiscal 1988 was approved by Democrats -- and spurned by Republicans -- after Democratic congressional leaders resolved a five-week-long dispute over defense spending in the face of a new offensive by Reagan to blame Congress for budgetary problems.
It now goes to the House and Senate, where leaders have predicted final approval in the next week or two. As a tax-and-spending blueprint for Congress, the budget does not need presidential approval, although legislation to implement it, including appropriations and tax bills, would have to go to Reagan for signature.
The budget calls for $64 billion in tax increases over three years, starting with $19.3 billion next year. Reagan has vowed to veto tax-hike legislation, and Sen. Lawton Chiles (D-Fla.), chairman of the conference committee, said the veto threat will make it more difficult to pass the legislation.
After the conference action, Reagan issued a statement attacking the budget, including a provision that would allow defense spending authority to rise from $289 billion to $296 billion, or roughly enough to cover inflation, only if the three-year tax increase is enacted.
"Their price for meeting our national security needs is this: For every $1 of defense it will cost $10 in new taxes. That's an offer I can refuse," Reagan said.
His statement followed earlier criticism by White House spokesman Marlin Fitzwater, who called the tax provisions "a pickpocket way to lift your wallet" and brushed aside congressional leaders' call for a budget summit, saying that the White House will insist first on overhaul of the congressional budget process.
But Democrats said that tax increases, along with restraint in defense and domestic spending, are necessary to end what they called the administration's policy of "borrow-and-spend," a retort to Reagan's charge that Congress follows the rule of "tax-and-spend."
Chiles indicated that the Senate may seek to combine tax-increase legislation with a bill that Congress must pass by mid-July to raise the federal debt ceiling to prevent the government from running out of borrowing authority.