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Senate Votes Curb on Hikes for Defense : Acts to Cap Growth at Inflation Rate Despite White House Pressure

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Times Staff Writer

The Senate, despite a full-court press from the White House in favor of President Reagan’s military buildup, narrowly voted Thursday to allow the Pentagon budget to grow no faster than projected inflation next year.

The vote on the 1986 military budget--in which the Republican-controlled Senate spurned Reagan on an issue that he has made a top priority--marked the second major setback in two days for a fiscal 1986 spending package backed by the White House and Senate Republican leaders. On Wednesday, the Senate had voted overwhelmingly to reject a curb on Social Security increases contained in the plan.

“Both of the White House positions have failed. I hope the President understands we made the best effort,” Senate Majority Leader Bob Dole (R-Kan.) said. However, he pointed out that both votes could be reversed as the Senate struggles to cut more than $50 billion from the 1986 federal deficit that is expected to approach $230 billion if present spending plans are not changed.

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3% Increase Rejected

The after-inflation freeze on military spending was approved without a roll-call vote after an earlier test on a procedural issue indicated that the Senate was divided 51 to 48 in favor of the measure. Reagan originally had asked for a 6% after-inflation military spending hike but had scaled his request back to 3% in a compromise with Senate Republican leaders. Inflation is expected to be about 4%.

Sen. Charles E. Grassley (R-Iowa), sponsor of the amendment, said that the vote “reflects, for once, that grass-roots America won out over the military-industrial complex.”

In earlier debate, Grassley had contended that curbing growth in defense spending could help eliminate waste and inefficiency at the Pentagon. “The defense budget has, in effect, become one of our nation’s largest entitlement programs, and it has nursed a new generation of welfare queens, the defense industry,” he said.

However, Senate Armed Services Committee Chairman Barry Goldwater (R-Ariz.) said that backers of the amendment were paying too much attention to public opinion--which increasingly has turned against further military increases--and not enough to national security.

“Let’s think about our country,” Goldwater said. “Let’s stop thinking about ways to get reelected.”

Warning on Deficit

A dozen Republicans sided with Democrats in favor of the after-inflation freeze, while eight Democrats voted against it.

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Sen. Sam Nunn of Georgia, one of the Democrats who had voted with the Administration and one of the Senate’s most influential members on defense matters, said that “3% is the level we really need in terms of defense.” But he warned that, under the press of a growing deficit, “at some point, defense is going to pay the price.”

Although the White House had steered clear of debate on the Social Security amendment a day before, top Administration officials had spent much of Thursday on the telephone lobbying with key senators--both Democrats and Republicans--on the defense issue. President Reagan reportedly had even made a few calls from Bonn, where he is participating in a seven-nation economic summit meeting.

‘Initial Skirmishing’

Sen. Thad Cochran (R-Miss.) said that the Administration stepped up its pressure because it thought it had a better chance of winning on the defense issue and because “at the center of the President’s policy is rebuilding national defense.”

White House spokesman Larry Speakes, commenting in Bonn on the previous day’s Social Security vote, said: “We have always regarded these votes that take place during the week--there will be 50 or so of them--as part of the initial skirmishing that will take place as the budget heads toward final approval. We don’t think the Social Security vote is the end of the world, as some are suggesting.”

In a separate action late Thursday, the Senate voted 80 to 18 to allow other federal pensions to rise with inflation, echoing the decision it had made on Social Security. The budget package had proposed curbing increases in Social Security and all other federal pensions at two percentage points under the inflation rate, with a guarantee of at least a 2% hike.

The package before the Senate has sparked opposition from a wide range of groups because it would reduce the deficit by cutting almost every domestic program, eliminating almost 20 of them.

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The Senate approved, 79 to 17, a non-binding measure expressing its support of requiring corporations to pay at least a minimum tax. The additional revenues would be used as part of an overall tax reform package aimed at lowering rates paid by most taxpayers and not at reducing the deficit.

The measure, coming amid disclosures that some of the nation’s largest and most profitable corporations pay no income tax, was an effort to stave off a move to use such a tax as an alternative to reducing the deficit through spending cuts. In addition, it allowed senators to be on record as favoring the increasingly popular idea of a minimum corporate tax.

The Senate will continue its debate on the budget resolution today, taking up proposed cuts in Medicare and Medicaid.

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