Dole Gets Regan Peace Pipe in Budget Dispute

White House Chief of Staff Donald T. Regan, who outraged Senate Republicans last week with his blistering criticism of a congressional budget deadlock, went to Capitol Hill Monday bearing a gift-wrapped Indian peace pipe as a 62nd birthday present for Senate Majority Leader Bob Dole.

The Kansas Republican, gingerly holding the pipe to his ear, joked: “Is there anything ticking?”

But, behind the jests lay more serious business as the Republicans from opposite ends of Pennsylvania Avenue moved to resolve their differences and begin trying to come up with a proposal that could bring House and Senate budget negotiators back to the bargaining table this week.

Recruiting Reagan

However, it was unclear how successful Dole would be in recruiting President Reagan into the budget effort. Although White House spokesman Larry Speakes made it clear that Reagan’s “presence will be forceful” in trying to revive the budget talks, the Administration believes the matter should be settled in Congress.

“We’ve compromised. Now it’s up to the Senate and the House to work out their differences and produce a budget,” Speakes said. “This is a matter for Congress . . . . I don’t think (Reagan) is going to ride a white horse to Capitol Hill on this one.”

The talks broke up last week after the Senate rejected what House negotiators insisted was close to their bottom-line offer.

Many on both sides say that the negotiations were soured by a deal between Reagan and House leaders that abandoned both a House proposal to allow no growth in new military spending commitments and a Senate plan to deny next year’s cost-of-living allowances to Social Security recipients.

Senate Republicans bitterly criticized Reagan’s decision to withdraw his support from the politically risky Social Security cut that they had proposed in the name of deficit reduction, and many blamed Regan and Rep. Jack Kemp (R-N. Y.) for persuading him to do the about-face.

Regan than compounded the ill feelings by saying in a speech to a U.S. Chamber of Commerce group that Congress was being “ridiculous” in not being able to agree on a budget.

Ill Will in Senate

The White House reversal, House Budget Committee Chairman William H. Gray III (D-Pa.) said, has “created some ill will, to say the least, on the Senate side.”

“We’re trying to work out with the Senate Republicans some type of satisfactory answer to this budget problem,” Regan said, adding that Dole “accepted (the peace pipe), and I think that will be the story from now on.”

Dole said that he had received a phone call from Reagan, who said he was “ready to go to work.”

But time is running out on efforts to significantly curb the federal deficit, now projected to approach $230 billion next year. Committees in both the House and the Senate already are cranking out their fiscal 1986 spending bills, even though the two sides have not been able to agree upon an overall spending plan.

Farm Spending Cuts

Even as Senate Republicans were criticizing House negotiators for refusing to cut deeply enough into domestic spending, they were struggling to live within the guidelines of their own budget proposal, which calls for $5.5 billion in agricultural spending cuts over three years.

Aides to Dole say that, with the farm credit crisis worsening, the Senate Agriculture Committee will be hard pressed to suggest any spending restraint in its fiscal 1986 legislation. Moreover, recent statistics show that it will cost $8 billion more than previously estimated just to continue providing the current level of federal support to farmers.