The Senate yesterday served notice it will not approve a debt ceiling increase needed this summer unless Congress acts to stop using the huge Social Security surplus to mask the size of the federal deficit.
The proposal, sponsored by Sen. John Heinz (R-Pa.), was approved 96 to 2 as part of a pending housing bill, with only conservative Sens. William L. Armstrong (R-Colo.) and Malcolm Wallop (R-Wyo.) in opposition.
If enacted, it could force Congress to raise the official deficit figure for fiscal 1991 by $50 billion and to rewrite budget targets under the Gramm-Rudman-Hollings budget-balancing law.
"When it comes to condoning a continuing charade, we have been caught red-handed," Heinz said.
The housing bill is not expected to become law by the time the debt measure comes up for consideration in late July, but Heinz said he may seek to amend the debt measure to include the new deficit calculation.
Heinz's move includes part of a controversial proposal late last year by Sen. Daniel Patrick Moynihan (D-N.Y.) to stop masking the deficit with Social Security surpluses and to roll back recent increases in the payroll tax. Heinz's proposal does not roll back the payroll tax.
In a related event yesterday, Defense Secretary Richard B. Cheney told White House and congressional budget negotiators that a five-year, 25 percent cut in military forces would result in little spending savings in the short term or the long run.
While military spending for fiscal 1991 would be $302.0 billion under Cheney's outline -- $1.3 billion lower than President Bush's January budget request -- military outlays would be higher in future years, he said. Over five years, it would save only $8.6 billion from the administration's earlier proposal, Cheney said.
Cheney told bargainers that his presentation did not represent a new proposal. Later, though, he told reporters at the Pentagon that it did reflect his thinking about a new five-year plan now being developed.
House Armed Services Committee Chairman Les Aspin (D-Wis.) complained that Cheney's numbers assumed no change in research and development spending from Bush's original proposal and had little reduction in operations and maintenance accounts.
"Even if we had an agreement on a 25 percent force-structure reduction -- which we don't -- we are nowhere near an agreement on what the resulting budget number would be," Aspin told reporters.
The House-passed budget projects military spending for fiscal 1991 at $295.4 billion, and the Senate Budget Committee resolution proposes spending at $293.9 billion.
Later, the bargainers held a general discussion about revenues. "Nobody presented any plans," said House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.). "We just looked at some charts."
Meanwhile, backers of a proposed constitutional amendment requiring a balanced budget succeeded yesterday in gaining enough support to force a House vote on the issue by next month, over objections of House Democratic leaders.
The supporters collected the 218th signature on a petition to take the measure from the House Judiciary Committee to the floor. "They can't prevent this now," said Rep. Larry E. Craig (R-Idaho).