Congressional leaders and senior Reagan administration officials wrapped up their first week of budget negotiations with a short session yesterday that some participants said made additional headway toward a compromise package of spending cuts and revenue increases.
"I think we made some progress," said Rep. William H. Gray III (D-Pa.), chairman of the House Budget Committee. Gray said both sides in the talks that began Tuesday "are getting a little more pragmatic."
Yesterday's session was devoted largely to a discussion of how to enforce any agreement to freeze some federal spending over a two-year period, according to those familiar with the talks.
The negotiators have been focusing on the outlines of a package that would save about $6 billion from a modified freeze on domestic and military spending that would exempt certain domestic programs for the poor. At the same time the talks are coalescing around an agreement to save an additional $5 billion to $10 billion from cuts in entitlement programs, such as Medicare, Medicaid and farm subsidies.
The remainder of the $23 billion in fiscal 1988 deficit reduction -- the minimum goal of the talks -- would come from higher taxes. Sources familiar with the negotiations said it is unlikely that any final agreement would stray far from the tax bills passed by the House and approved by a Senate committee that would raise about $12 billion, primarily from higher levies on upper-income individuals and on corporations.
Additional savings above the $23 billion target could come from the sale of federal assets, sources said.
Congressional staff members were instructed to spend the weekend studying ways to legislate a guaranteed mechanism for making spending cuts resistant to future tinkering. That could prove difficult since a prime goal of the talks is to institute a two-year program of savings, and Congress appropriates most of its spending programs on an annual basis.
Sources said that once a way is found to guarantee the multiyear savings on appropriated accounts, an agreement will be more likely on the additional cuts in entitlement programs, which are easier to lock in over more than one year.
"If we're going to cut accounts we have to make it clear, exact and enforceable," said Sen. J. Bennett Johnston (D-La.), one of the negotiators. "This kind of deal demands specificity, exactitude and enforceability."
President Reagan has often accused Congress of reneging on its spending commitments, particularly by cutting military spending below agreed levels.
Reagan raised that issue again yesterday in his weekly radio address. "When we cut spending, it must stay cut -- no coming back the next year with new programs or replacing old reductions with new increases," he said. "From now on, deficit cuts, like diamonds, must be forever."