Senate Budget Compromise Is Reagan Goal

The Reagan Administration hopes to compromise quickly with Senate Republicans, win Senate approval by the end of next month on a budget package to slash federal spending in 1986 by $50 billion and push the package through the Democratic House because the Democrats are divided, a group of Administration officials said Saturday.

The White House believes the compromise package will not include the across-the-board freeze on spending that many Senate GOP leaders advocate. It will probably leave Social Security benefit increases intact and avoid significant cutbacks in Reagan’s massive defense buildup, the officials said.

Consequently, Senate Republicans would have to accept nearly all of the domestic spending cuts Reagan is expected to recommend when he delivers his own budget on Feb. 4, according to one of the officials, Budget Director David A. Stockman.

Deeper Defense Cuts Seen

The White House might be prepared to shave about $12 billion to $15 billion off the Pentagon’s original plan to spend $286 billion next year, one official closely involved in the White House budget process hinted. That would be a slightly deeper cut than the $9 billion already accepted by Defense Secretary Caspar W. Weinberger.

A deal on a budget package to trim the deficit could easily fall apart, however, because many Senate Republicans are insisting that any such package must include a freeze on next year’s military spending. That would slow Reagan’s defense buildup by about $20 billion.

Administration officials believe a deal on a budget package in the Republican-controlled Senate would put enormous pressure on the Democratic-dominated House.

“The Democrats will have to either come up with an alternative, which they cannot develop without major tax increases,” said an Administration official, “or they are going to have another choice--give us a vote, get out of the way.”

In a background session with a number of reporters, Administration officials agreed to talk about the White House budget strategy on the condition that no sources be identified by name. Subsequently, United Press International, which did not attend the briefing, disclosed that Stockman was a member of the group.

“There’s a decent chance . . . the Senate could bring, with Administration support, a comprehensive spending reduction bill to the floor” by the end of February, one member of the group said. “If the election meant anything, it means the government ought to try in this first round of deficit action to reduce spending to the maximum degree possible before anybody raises a hint about taxes.”

Administration officials hope a package cutting the 1986 deficit to under $180 billion can be put together that is acceptable to both President Reagan and a Senate majority that would include at least a handful of Democrats. But they acknowledge that such a compromise would probably fall well short of the three-year goal outlined by Senate Majority Leader Robert J. Dole (R-Kan.), who has called for cutting the deficit to $100 billion by 1988.

If Dole accepts a compromise with the White House and pushes a spending package through the Senate by the beginning of March, Administration officials argue, Democrats will have no choice but to let the proposal come to a vote in the House.

As these officials see it, House Democrats are split into so many warring factions that the Democratic leadership will be incapable of developing its own deficit proposal. In addition, House Democrats have vowed not to propose a tax hike unless President Reagan asks for it, making it all but impossible for them to cut next year’s deficit from a projected $230 billion to Reagan’s $180 billion target figure.

“The Democrats have made it clear they are going to lie in the weeds,” said one Administration official. “And they are so divided, you couldn’t negotiate with them even if you wanted to.”

Perhaps the biggest obstacle to any overall budget compromise, Administration officials acknowledge, is Weinberger’s opposition to any further restrictions on the Pentagon budget.

Previous Cuts Assailed

In Reagan’s first term, officials explained, nearly all of the cuts Congress has imposed on the defense budget have been painless. This is because lower inflation has permitted the Pentagon to continue buying as many weapons as it wants since the weapons have proved less expensive than originally expected. “We’ve not really been cutting our defense budget,” said an official. “We’re just refinancing it (out of inflation savings).”

Senate Republicans--faced with political pressure to reduce budget deficits by the 1986 mid-term election and worried that President Reagan, who is ineligible to run for reelection, would not propose a politically acceptable deficit package--took the unprecedented step late last year of starting work on their own budget proposal.

The White House still vows to come close to the goal of cutting the deficit to 4% of the nation’s gross national product next year, but a senior Administration official said reporters should not hold the White House to such specific projections anyway, because of the many uncertainties involved in forecasting a deficit.

“What’s $10 billion or so in a trillion-dollar budget?” chided an Administration budget official. “That’s close enough for government work.”