Senate Stalled on Balanced Budget Rider : Plea by President Is Ignored; Default on Checks Possible

With government bank accounts virtually dry, the Senate remained tied in knots Sunday over a measure to extend federal borrowing authority as Republicans and Democrats pushed competing amendments which would mandate a balanced federal budget by 1991.

The impasse over the deficit proposals, which take different approaches to reach the same goal, is delaying final action on a measure to give the Reagan Administration the authority to continue borrowing by raising the ceiling on the national debt to more than $2 trillion from the present $1.8-trillion level.

The House has already approved a debt ceiling hike, but would have to endorse any changes the Senate might add, such as a balanced budget proposal.

Cash Balances in Jeopardy

In failing to act, the Senate ignored a last-minute appeal from President Reagan and a warning last week from Treasury Secretary James A. Baker III that, without new borrowing power, the Treasury will virtually exhaust its cash balances today. If that happened, Baker said, the government might have to default on its debts for the first time in history and might be unable to cover Social Security checks, payroll checks, unemployment checks, contracts and other obligations.

Art Siddon, a spokesman for Baker, said Sunday that most Social Security and welfare checks for the month of October have already been issued and would not be affected by a cash crunch, should it come. Similarly, Siddon explained, checks issued for the government’s regular payday today should not bounce.

But, he cautioned: “You’ll come to a point Tuesday when we’ll have to stop issuing checks.” One result of that action would be a delay in payments on government contracts, he explained.

‘Zero Hour Is Approaching’

Before the Senate convened in a rare Sunday session, President Reagan, weekending at the presidential retreat at Camp David, warned lawmakers in a statement that “the zero hour is approaching.” He urged them to avoid a “financial emergency” by voting to add the Republican-crafted deficit-cutting scheme to the debt-limit extension.

“The American people have grown very weary of delays, excuses and inaction,” Reagan said. “They cannot accept that this government is incapable of living within a reasonable budget when their families can and do live within their budgets.”

Despite that plea, Republican and Democratic leaders in the Senate stymied each other’s efforts to resolve the impasse.

Republicans were unable to muster a two-thirds’ majority vote to end a Democratic-led filibuster of the GOP deficit-reduction proposal, authored by Sens. Phil Gramm of Texas and Warren B. Rudman of New Hampshire. The vote was 57 to 38, with California’s senators divided. Republican Pete Wilson voted to end debate, and Democrat Alan Cranston voted against ending debate. A two-thirds’ majority vote was needed to invoke cloture, rather than the traditional three-fifths’ majority, because the Gramm-Rudman amendment would affect Senate rules.

Similarly, Republicans refused to go along with a Democratic suggestion to pass a stopgap increase in the debt ceiling. The Democrats contended that the temporary increase would give lawmakers more time to study the deficit-cutting proposals.

The Gramm-Rudman approach would mandate automatic cuts in federal spending across a wide spectrum of domestic and military programs if Congress failed to meet deficit-cutting targets. An alternative backed by Senate Minority Leader Robert C. Byrd (D-W. Va.) and Sen. Lawton Chiles (D-Fla.) would couple the creation of a minimum corporate tax to raise revenues with mandatory spending trims. Either, if fully implemented, would chop the annual budget deficits, now hovering around $200 billion, down to nothing in yearly stages ending in 1991.

‘Think We’ve Gone Bonkers’

“With us $2 trillion in debt and running out of time, the American people think we’ve gone bonkers because we can’t do anything,” complained Senate Majority Leader Bob Dole (R-Kan.) during a speech on the floor.

Later, speaking to reporters, he predicted that the resumption of debate on the measure today would bring “a lot of speeches, a couple of votes, wringing of hands, posturing and no action.”

Byrd argued, however, that the Republican plan shifted too much power to Reagan, whose economic policies the senator blamed for a doubling of the national debt over the last five years.