Wright Sets Deadline for Budget Talks : House May Act on Its Own, He Says as Senate Rejects Counteroffer

A budget compromise may be impossible to achieve, House Majority Leader Jim Wright (D-Tex.) suggested Friday, as Senate negotiators rejected a proposal by House conferees that failed to offer any solution to the key stumbling blocks in the fiscal 1986 spending blueprint--Social Security benefits and military spending.

Wright hinted that the Democrats, who control the House, might walk away from budget negotiations if a compromise is not reached by the end of the month, slightly more than a week away.

Refuses to Be Delayed

“Failure of the conferees to agree is not going to delay us any further,” Wright said, explaining that the House intends to act on individual spending bills on its own after the Fourth of July recess.

The House proposal, made in response to a Senate offer two days earlier, would have cut an additional $1.5 billion in domestic spending from next year’s budget, but it held to the House negotiators’ position that no reduction in Social Security cost-of-living increases is acceptable.

The Senate plan, quickly rejected by House conferees, would have fully funded most poverty programs but would have canceled next year’s Social Security increase except for beneficiaries near the poverty line.

In addition, the two groups remain divided over defense spending: The House is demanding that the military budget be frozen at the fiscal 1985 level; the Senate continues to seek an increase equal to inflation, estimated at 4%.

The budget negotiations are designed to set a series of spending ceilings by which congressional committees are supposed to abide, but separate legislation is required to achieve the spending targets established by the budget resolution.

In the meeting of budget conferees Friday afternoon, Sen. Slade Gorton (R-Wash.) complained that the House proposal was “not a serious response” to the offer by Senate negotiators, and Senate Budget Committee Chairman Pete V. Domenici (R-N. M.) told reporters he was “fearful that there isn’t room for give” on the two key areas that divide the conference committee.

Lawton Chiles of Florida, the ranking Democrat on the Senate Budget Committee, worried that the negotiations are going nowhere and that, with the “cards we’re now playing with, there is no way you play this hand to come out with a deficit reduction that this economy needs.”

Each ‘Budged a Bit’

But Rep. Martin Frost (D-Tex.) tried to ease the tension, pointing out that “each side has budged a little bit. Neither side has budged a great deal. I would hope as we proceed with this next week (that) both sides will seek a middle ground.”

There were few signs of compromise on the critical issue of Social Security. Although House Budget Committee Chairman William H. Gray III (D-Pa.) said that all disputed budget items remain “on the table,” Wright said neither Democrats nor Republicans in the House favor limits on Social Security benefit hikes.

“You couldn’t pass a bill in the House that reneged on our Social Security commitment,” Wright said.

Domenici dismissed an off-the-cuff proposal by Gray to allow Social Security benefits to increase in line with the House position and to permit defense spending to rise as much as the Senate wants. Several House Democrats also immediately rejected the idea, and even Gray, when asked about it after the meeting, said that he was not sure he could go along with his own offer.

At the same time, neither Domenici nor Gray responded positively to a suggestion that the negotiators might agree to provide only Social Security recipients with full benefit increases in 1986 while canceling hikes for government retirees and other beneficiaries of federal social programs.

The House offer included a proposal to cut 20%, instead of the initial 10%, from such programs as Urban Development Action grants, mass transit, the Economic Development Administration and the Appalachian Regional Commission. In addition, it proposed $1 billion more in unspecified cuts from farm programs over the next three years.