New Budget Plan Passed by Senate : Bush Breaks Tie; Social Security Hike Killed, Arms Boost Limited

The Senate, in a cliff-hanging early morning vote today, approved a revised budget package that would deny Social Security recipients next year’s benefit increase and President Reagan the after-inflation hike in defense spending he had sought.

California Republican Pete Wilson, hospitalized for an emergency appendectomy performed on Wednesday, was rushed to the Senate chamber by ambulance and from his wheelchair cast the vote that threw the issue into a 49-49 tie. Vice President George Bush, having interrupted an official trip and flown back to Washington from Phoenix Thursday, broke the tie with a vote for the revised package.

Shortly before the vote, Senate Majority Leader Bob Dole (R-Kan.) said: “This is the moment of truth, this is it.” He warned that, if the package is defeated, “we only lose the vote. The American people lose confidence in the United States Senate.”

Administration officials said that Reagan had agreed to the revised proposal, despite the fact that last week he had branded the one-year military spending freeze voted by the Senate “an irresponsible act.” It would limit growth in the military budget to the rate of inflation rather than to the 3% after-inflation increase that Reagan had earlier acceded to.

The new package would cut an estimated $56 billion from a 1986 federal deficit projected to approach $230 billion. Over three years, it would save $295 billion, leaving a deficit estimated at $104 billion in 1988.

The final vote capped three weeks of debate in which the Republican-controlled Senate rejected many aspects of the original GOP plan: deep domestic spending cuts and the elimination of almost 20 popular federal programs, combined with the boost in military spending. The Democratic House has yet to act on its budget package, which probably will have to be reconciled with the Senate version in a conference committee.

Some Programs Saved

Under the revised proposal, at least partial funding was restored for many of the programs that had been marked for extinction. Among them were the Job Corps, Amtrak and the Small Business Administration.

However, the proposal would terminate a total of 13 government programs, including a variety of economic development activities and general revenue sharing for local governments.

Although some money was restored to transportation programs, it was unclear whether the package resurrected the fund from which Los Angeles hopes to finance its proposed Metro Rail system.

The package trimmed guaranteed student loans by $200 million, a relatively small cut that is not expected to have much impact on the availability of student aid. Also discarded was a proposed annual limit on the amount of aid a student could receive.

The Senate spent much of Thursday voting on amendments to the original package. Behind the scenes, however, Republican leaders were hastily making deals with members whose votes they needed.

Reagan, still on a European trip, reportedly lobbied by telephone with senators from both political parties.

The package, sweetened with additional aid to farmers, won some Democratic votes also. Nebraska’s Democratic Sen. Edward Zorinsky, before voting for the package, had told reporters that he was “leaning toward” it. “Up to now, my concern was that agriculture was taking a disproportionate share of the cuts,” he said.

Republican negotiators had agreed to restore $3.5 billion in funds to farm programs, including aid that does not appear in the budget, such as loan guarantees and giveaways of government-owned grain to foreign purchasers of U.S. produce.

Some in GOP Balking

But Republicans failed to sway some of their own members. Sen. Alfonse M. D’Amato (R-N.Y.) had vowed to vote against any package that would cut Social Security and did. Sen. Paula Hawkins of Florida also voted against the package.

The new package denies Social Security benefit increases for one year, replacing a formula in the original plan that was projected to cut the benefit increase by half next year. The revised plan would achieve greater savings up front but about the same amount--more than $20 billion--over three years.

D’Amato, along with other Republicans, expressed concern about the effect that curbing the defense increase would have when the Senate begins negotiating with the Democratic-controlled House, which has been more hostile than the Senate to Reagan’s military buildup.

“When you’re down to zero on defense spending,” he said, “what happens when you go to the House?”

Start of Swing Seen

But Democrats saw it as possibly the beginning of a permanent swing in Senate support for increasing Pentagon spending.

“If we do zero, and then find out the Russians aren’t coming, maybe next year we’ll see the same thing,” Sen. Tom Harkin (D-Iowa) said.

Separately, in a show of the mood of Reagan’s party in the House, a 30-member group of moderate House Republicans announced a budget recommendation that would not even allow the defense budget to grow with inflation. It aims to achieve $51 billion in savings next year, but it would leave the issue of whether to cut Social Security to be addressed in a bipartisan agreement.