Balanced Budget Plan Hits a Snag : Rebels in Both Parties Hold Up Proposal to Halt Deficits by 1991

A congressional plan to balance the budget by fiscal 1991, endorsed by President Reagan today, immediately ran into a snag when some senators balked at attaching the measure to the bill needed to raise the debt ceiling.

Senate Republican leader Bob Dole early in the day predicted that the balanced budget amendment would “sail through” the Senate, and it appeared to be picking up steam. But later, some Republicans refused to go along, and Democrats, who could not agree on an alternative strategy, also rebelled.

Senate Minority Leader Robert C. Byrd of West Virginia urged Dole to pass a small increase in the debt ceiling temporarily to give senators time to look at the budget-balancing plan.

The plan was attached to the bill to lift the debt ceiling from $1.8 trillion to $2 trillion needed by Monday to keep government checks from bouncing.

Caps for Each of 6 Years

The deficit reduction plan, sponsored by Sens. Phil Gramm (R-Tex.), Warren B. Rudman (R-N.H.) and Ernest F. Hollings (D-S.C.), would put caps on the amount of the deficit in each of the next six years.

Sen. Lowell P. Weicker (R-Conn.) argued against the plan, saying Congress already has the power to balance the budget with taxes or spending cuts.

“This is a legislative substitute for the guts we do not have to do what needs to be done,” he said.

Under the Gramm-Rudman-Hollings plan, if the annual deficit limits are violated by more than 5%, reductions would be mandated in all government programs except Social Security. It would also permit unspecified tax increases, although Reagan maintained today that he liked the plan because it “attacks deficit the right way, not by raising taxes but by cutting government spending.”

Senate Democrats were working on an alternative proposal that would reduce the deficit to zero by 1990, a year earlier than the Gramm-Rudman-Hollings plan and would call for specific budget cuts.

“I’m announcing today what may well be a historic agreement to bring federal spending under control and at long last bring the United States a balanced budget,” Reagan told members of Congress at a White House gathering.

“We cannot escape the truth that the budget process has failed,” he said. “We’re going to put our house in order and finally live within our means.”

Although there is no mention of maintaining military spending in the plan, Reagan declared: “We will maintain a strong defense, and I expect Congress to live up to its commitments on defense.”