Reagan Accuses Congress of ‘Dithering’ : Wants Action on Bill Hiking Debt Limit, Forcing Balanced Budget

President Reagan accused Congress Monday of “inexcusable dithering and delay” in failing to act promptly on a bill to couple a hike in the national debt ceiling with a Republican plan to force a balanced budget by 1991.

But his advisers privately conceded that the balanced-budget measure would make a tax increase virtually inevitable next year. “If this were to pass, it would change the landscape completely,” a top-ranking official said.

The plan would mandate across-the-board cuts by the President in a wide range of domestic and defense programs to meet annual deficit ceilings declining from $180 billion next year to zero by 1991, if Congress fails to enact spending cuts and tax increases sufficient to stay under the deficit ceilings.

Democrats Suspicious

Although many Democrats have expressed guarded support for the concept, key party members have grown increasingly suspicious that Reagan would manage to put the ax to social spending but keep his defense buildup intact.

“He could use this when it suited him and not use it when it suited us,” House Appropriations Committee Chairman Jamie L. Whitten (D-Miss.) said.

Defense Secretary Caspar W. Weinberger fueled Democratic anxieties last week with his warning that “we can’t have our defense and our security policy be a total prisoner of a rigid formula designed to reduce the budget.”

Rep. Leon E. Panetta (D-Monterey) said: “A question has been raised whether the President in his commander-in-chief responsibilities can virtually say . . . ‘I intend to ignore whatever is in this law.’ ”

White House officials maintain that Reagan’s spending predilections are irrelevant because the budget formula’s deficit ceilings are so demanding that they could not be met if defense were left intact.

“Everybody’s looking to see who gets gored the worst,” a top aide said. “The fact is it would be hard on everyone.”

This official and others who asked not to be identified acknowledged that a tax increase would become almost certain if Congress enacted the balanced-budget measure, whose principal sponsors are Sens. Phil Gramm (R-Tex.) and Warren B. Rudman (R-N. H.).

One aide said that it would be impossible to cut the deficit by $36 billion a year, as the bill requires, if Reagan holds to his commitment not to raise taxes. “People are starting to read the fine print,” this official said.

Reagan has supported the Gramm-Rudman bill despite the prospect of defense cuts and tax increases. White House officials argued that defense, which they said has been taking a disproportionately large share of budget cuts in recent years, would be less vulnerable under Gramm-Rudman’s formula for across-the-board spending cuts than it would be on its own.

As for taxes, aides said that Reagan is an eternal optimist who believes the strength of the economy will boost tax revenues and forestall the need for higher tax rates. In a statement applauding a rise in the nation’s productivity, the White House noted: “Our economic future is bright and, if there is any cloud in an otherwise bright sky, it is a Congress that is dragging its heels.”

The Senate has attached the Gramm-Rudman bill to a measure lifting the ceiling on the national debt from $1.8 trillion to more than $2 trillion. The Treasury Department has warned that, if Congress does not enact the debt ceiling increase by Friday, it will run out of authority to borrow the money needed to operate the government.

Reagan warned that the government might then have to sell securities held by the Social Security Trust Fund and other government trust funds to raise operating cash.

Affecting Social Security

“We’re running up against the possibility that we may have to disinvest the Social Security Trust Fund, short-changing that trust fund of accumulated interest, all because of the inexcusable dithering and delay in meeting the responsibilities about raising the debt ceiling,” he said in a White House speech.

Rep. Marty Russo (D-Ill.) said the Treasury Department informed him that the trust funds could lose as much as $100 million in interest from Nov. 1 to Nov. 15 if the Administration were forced to tap them.

House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.), who has denounced the balanced-budget amendment as a “political gimmick,” promised that the Democrats on the House-Senate conference committee will try to complete action by Friday.