House Conferees Offer New Budget Trims : Domestic Programs Would Lose $24 Billion Over Three Years

House budget negotiators, making what one said is “very close to our bottom-line offer,” agreed Tuesday to trim about $24 billion over three years from domestic programs other than Social Security, moving more than halfway toward the Senate on cuts in these areas.

Senate conferees are expected to respond to the offer today, but Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) told reporters: “I am not that much more encouraged.”

Domenici and other Senate negotiators suffered a severe setback last week, when President Reagan--trying to break a House-Senate deadlock over the budget--withdrew his support for a Senate proposal to deny next year’s cost-of-living increases to recipients of Social Security and other federal retirement programs. In exchange, House conferees agreed to allow an increase in long-range defense spending commitments to be made next year.

‘America Needs a Budget’

House Budget Committee Chairman William H. Gray III (D-Pa.) urged Senate negotiators to take his proposal seriously, declaring: “We feel that the hour is getting late, that America needs a budget, that we need to move forward.”

Without any change in existing policy, deficits are expected to exceed $200 billion a year for the foreseeable future.

Overall, the House plan would trim almost $273 billion from the deficit over three years, leaving a $117-billion deficit in 1988. Although this adds $13.5 billion to deficit reduction contained in the original House spending plan, it does not go as far as the Senate plan, which would reduce the deficit by $295 billion.

Offsetting some of the new savings claimed by the House was its decision to abandon a proposal to save about $12 billion by contracting out many jobs now performed by the government. That plan had been labeled “smoke and mirrors” by Senate negotiators, who argued it probably would never materialize.

New spending cuts were made in dozens of federal programs, including the Export-Import Bank, Superfund, rural housing, Small Business Administration programs and mass transit. In this area, their proposal fell only $4 billion short of the $28 billion in additional cuts demanded by Domenici.

Indeed, the cuts were so sharp that one aide to the House leadership said that Gray may have difficulty persuading powerful House committee chairmen to go along with them. “At the moment, Bill Gray is probably a little ahead of a consensus,” said the aide, who spoke on the condition he not be identified.

One Senate objection to the proposal stems from a disagreement over what was decided in last week’s meetings with the White House.

House conferees insist that they agreed only to “move toward” a Senate-passed provision allowing defense spending authority to grow enough to keep up with inflation--about $9.9 billion in 1986. But Senate negotiators say the pact included allowing the full amount authorized by the Senate. The House offer includes only an additional $5.4 billion in new defense spending authority.

“Our understanding was that the President agreed to trade their position on (cost-of-living allowances) for our position on defense,” Sen. Slade Gorton (R-Wash.) said.

House conferees warned senators not to expect many more concessions from them. “We feel this is very close to a bottom-line offer,” Rep. Martin Frost (D-Tex.) insisted.

Added California Rep. Vic Fazio (D-Sacramento): “If they reject this, they are, in effect, saying they want to trash the budget process.”