Two on Budget Panel Warn of Tax Increases

Times Staff Writer

The top-ranking Republican and Democrat on the Senate Budget Committee warned Sunday that tax increases loom as the only solution to the bulging federal deficit if the panel continues to resist significant federal spending cuts.

In a not-so-subtle prod to fellow members of the GOP-controlled body, Chairman Pete V. Domenici (R-N.M.), appearing on the CBS News program "Face the Nation," said: "We're moving rather quickly as I see it toward taxes."

Although he vowed to oppose any tax increase, Domenici said that if his colleagues continued to reject domestic budget cuts, "they're going to have to put taxes in the (budget) resolution" in order to make any meaningful dent in the deficits, which are expected to reach $220 billion by next year.

Florida Sen. Lawton Chiles, the ranking Democrat on the committee, said on the same program that he believes that enough committee members will support cuts in both domestic and military spending to reach the panel's goal of slashing federal spending by $150 billion over the next three years.

"So, if you want to get to this goal, then I would agree . . . that you will probably have to have some (new) revenues in the package to get to the goal," Chiles said.

Domenici hopes to cut $60 billion from next year's deficit, but aides have calculated that trims approved so far amount to less than one-third of that figure.

Spurns Administration

In four days of hearings last week, the committee repeatedly turned down Administration-backed proposals to end subsidies for student lunches, mass transit systems and Amtrak, and to trim expenditures on Medicare, Medicaid and student loan programs. It also failed to reach a consensus on whether to freeze Social Security benefits, a political hot potato that President Reagan opposes but which is backed by some other Republicans, including Domenici.

The hearings are scheduled to resume Tuesday with the panel taking up Reagan's plan to eliminate the general revenue sharing program, a move strongly opposed by state and local officials of both parties.

Domenici suggested that the budget fight was still in its "early innings" and predicted that committee members would eventually see the light. "From what I can tell, there will be a dose of reality when we're finished with this first round (of hearings)," Domenici said.

Support for Freeze

Chiles, many of whose constituents are retirees, said that elderly voters in his state have told him that they will back a cost-of-living freeze in Social Security benefits as long as they believe that the "pain" of cuts is felt evenly throughout the budget, including that portion earmarked for the military.

Last week, the panel did vote, over Administration objections, to slash the 1986 Pentagon request by $11 billion, a cut that would allow defense spending to increase next year only by the rate of inflation.

"Defense (spending) will have to be as low as it is now, or even lower," Chiles insisted. "Right now, defense is frozen at last year's level but with an inflation adjustment on there, and yet we're asking our senior citizens not to have any inflation (adjustment)."

Echoing Chiles' sentiments, Colorado Sen. Gary Hart, another Democrat on the budget panel, said on NBC's "Meet the Press" Sunday that Reagan's refusal to compromise on the defense budget was the major obstacle to agreement on an overall budget reduction program.

"It (an agreement) will probably have to involve even further reductions in military spending to get a majority that will deal with the issue of the (Social Security) cost-of-living increases and the entitlements programs," said Hart, who is seen as a prime contender for his party's presidential nomination in 1988. "There is not a sense that the Pentagon has taken its fair share of those cuts," he said.

Reagan Criticized

Hart criticized Reagan for staying aloof from the budget process, contending that the President "could have 10 Democrats and 10 Republicans at the White House and in four hours we could have a budget that everyone agreed on."

For the third year in a row, he contended, Congress is rejecting Reagan's budget blueprint and forging a bipartisan document of its own.

"It's almost as if the President isn't even a player, isn't even relevant to this process," Hart said. "What we have, for the first time in a long time, under what is called a strong President, is congressional governing in this country, and it's very, very hard."

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