Panel Rejects Sharp Reagan Cuts in Farm Programs, Leaves Subsidy System Intact

The Senate Budget Committee, in the third day of piecing together its fiscal 1986 budget recommendation, Wednesday rejected the sharp cuts that President Reagan wants in federal farm programs, opting instead to leave the existing farm subsidy system virtually intact.

By late in the evening, the committee’s spending package was running $6.5 billion over the target that Chairman Pete V. Domenici (R-N.M.) had set as part of his overall goal to slash up to $60 billion next year.

However, the committee cut more than $23 billion from next year’s deficit, which is projected at $230 billion if current spending policies continue. And its recommendations are $3.2 billion below those of the President for the programs it acted on.

The panel, freezing most programs and voting down many of the most unpopular cuts both Reagan and Domenici had recommended, lost the ground it had gained Tuesday by voting to freeze after-inflation defense spending. The Administration had asked for a 6% defense spending increase after allowance for inflation, and Domenici had proposed 3% over inflation. The inflation increase is projected at 4% to 5%.

Adopts Exon Proposal

“If they don’t want to go back and regroup, it won’t be a very good budget,” Domenici told reporters after the Administration-backed agricultural program was defeated by a vote of 13 to 9.

Instead, the committee adopted by a 14-8 vote a proposal by Sen. J. James Exon (D-Neb.) that would provide a modest decrease in the farm subsidy program. Exon’s proposal did not specify the cutbacks and instead would leave it up to the Senate Agriculture and Appropriations committees to work them out.

Even Exon’s plan received sharp criticism from some farm-state senators, who had sought an absolute freeze on farm spending rather than any cutbacks. But Exon told them: “Agriculture has been going up rather rapidly during the past few years, to the place that most farmers I talk to say: ‘We are ready to take some cuts to get this budget under control.’ . . . They are ready to make some sacrifices.”

The committee rejected a total freeze on farm spending, proposed by Sen. Charles E. Grassley (R-Iowa), by a vote of 16 to 6.

Turf Fight Forecast

Domenici warned the committee that, even if it could reach his goal of finding $60 billion in spending cuts, the plan would never become reality unless it were backed by tough legislation mandating that various Appropriations subcommittees stay within its target, a move that almost certainly would spark a bitter political turf fight between the drafters of the budget and the other committees.

In other action Wednesday, the committee:

--Scaled back Administration requests for sharp cuts in the Export-Import Bank’s budget by adding a $1-billion “war chest” that the bank could use to counter predatory trade practices by other countries.

The same plan, approved 17 to 1, would also freeze security assistance to countries other than Israel and Egypt rather than provide the $1 billion that the Administration requested for fiscal 1986. The panel approved the Administration’s proposals for increased aid to Israel and Egypt.

Space, Science Freeze

--Approved by voice vote a proposal to freeze space, science and technology programs at this year’s level in 1986 and to allow them to grow only by the rate of inflation in the two subsequent years.

--Voted 14 to 8 to reduce the rate at which the government is filling the Strategic Petroleum Reserve by about two-thirds, to 50,000 barrels of oil a day. The Administration had asked to stop filling the reserve for at least one year.

--Rejected the sharp cuts that the Administration had urged for environmental programs, including parkland acquisition and the Superfund toxic dumps cleanup program. The committee voted 13 to 9 to freeze natural resource and environmental budgets.

--Recommended cutting the Small Business Administration’s budget by two-thirds, rather than abolishing the agency, as the Administration had proposed.