Congress Looks at Sweeping Budget Cuts : Senators Unveil Proposals to Eliminate Deficit Within Six Years

Fearing a voter backlash over its inability to put a significant dent in the bulging federal deficit, Congress Thursday moved to take up unprecedented spending restraints that--if actually carried through--could end federal red ink in six years at the latest.

As the Senate considered a bill hiking the national debt ceiling to more than $2 trillion, Republicans and Democrats in the Senate unveiled sweeping deficit slashing amendments that could require the kinds of defense and domestic spending cuts that lawmakers up to now have found politically unpalatable.

However, like the statutory ceiling on the national debt--itself created to restrain spending--the budget curbs now under consideration could be modified or suspended in future years by Congress. Indeed, a key element in their political appeal appeared to be the fact that they would allow lawmakers to respond to widespread public concern about the deficit without taking immediate action against specific spending programs.

Reagan Endorsement Seen

The Republican plan is expected to get an endorsement from President Reagan today and could also come to a vote in the Senate, which is rushing to complete action on the debt ceiling bill by early next week--when Treasury Secretary James A. Baker III says the federal government will reach the limit of money it can legally borrow to keep running.

Drafted by Sens. Phil Gramm of Texas and Warren B. Rudman of New Hampshire, the amendment requires annual cuts in budget deficit levels that would bring the budget into balance by the fall of 1991. If spending in any year exceeded targeted deficit levels, Congress would either have to order necessary cuts or the President would be required to impose across-the-board trims on virtually the entire range of federal programs.

Only Social Security benefits would be spared under the Rudman-Gramm proposal.

Similarly, a competing Democratic plan laid out a schedule of deficit trimming goals and mandatory spending cuts. But it gave President Reagan the option of delaying defense reductions if he thought they would damage national security and required the adoption of a minimum tax on business corporations to raise revenues before ordering spending cuts.

Political Appeal

The varied political appeal of such schemes is clear:

--For Republicans in the Senate, where 22 GOP seats are at stake in 1986, they could offset the damage suffered this summer when GOP senators voted to cut Social Security to reduce the budget deficit, then saw the White House undercut them by pulling back from its commitment to their package.

--For Democrats in both the Senate and House, the plans are a way to avoid the lingering voter suspicion that--though Republican Reagan is in the White House--Democrats and their big spending tendencies are mainly responsible for the budget deficit.

--And for the White House, they offer a way to cut the deficit the only way the President is willing to do it--by cutting spending, not raising taxes.

House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.), though expressing disdain for the way Republicans were ramming their plan through the Senate, acknowledged that chances were good for quick approval of something like it in the Democratic-run House. And Senate Majority Leader Bob Dole (R-Kan.) said that President Reagan would announce his support for the concept today.

Close to Commitment

Reagan came close to making that commitment Thursday when, in a speech to businessmen in Cincinnati, he said that the White House had long been developing a budget-cutting mechanism similar to one proposed in the Senate by Rudman and Gramm. “We found out that we were sure thinking alike,” the President said.

Congressional Budget Office estimates indicate that the federal budget was $210 billion in the red during the fiscal year that ended Monday. Despite a months-long struggle in Congress to significantly chop future spending, the budget office predicts that the deficit will decline only to $175 billion in the current 1986 fiscal year and still hover around $120 billion in 1990.