Pushed to Accept Senate Plan; Baker Urges Debt Ceiling Action : Congress Pressured on Balanced Budget

President Reagan, GOP congressional leaders and Administration officials Friday stepped up pressure on Congress to accept a Senate-passed balanced budget plan and reject a version pushed by House Democrats.

Reagan and the GOP lawmakers renewed their support for the original Senate-passed plan, saying the rival House proposal is “phony.”

Treasury Secretary James A. Baker III warned of “swift and severe repercussions” fiscally if Congress fails to act by the end of next week on legislation, linked to the budget plans, that would restore the government’s authority to borrow money.

However, Defense Secretary Caspar W. Weinberger, who does not like either budget plan, said any legislation that could force automatic cuts in military spending threatens the nation’s security and undercuts the President’s position in talks with Soviet leader Mikhail S. Gorbachev.

After a White House meeting with Reagan, Senate Majority Leader Bob Dole (R-Kan.) said that the President backs the Senate version of the bill because it would provide for a military spending increase that keeps pace with inflation in this fiscal year and increases of 3% after inflation in the next two fiscal years.

“He likes the Senate version,” Dole said of Reagan’s position. As for the House plan, it is “phony,” Dole added.

Dole said Baker had also told the Republican legislators that “we may not know the seriousness of what may happen . . . if we don’t act” on federal borrowing authority before the deadline at the end of next week.

The government has reached its borrowing limit of $1.824 trillion, and Treasury Department officials say they will run out of cash next Friday. Legislation raising the borrowing limit to more than $2 trillion has been stalled by wrangling over the balanced budget plans that the House and Senate have attached to the measure.

Baker later told reporters that, if the debt limit is not “increased by midnight on the evening of the 14th of November, the United States will default unless the President orders me to sell our gold, and I don’t anticipate that happening.”

He added: “Any default will have swift and severe repercussions both domestically and internationally, and it is our view that it will probably raise general interest rates, costing the United States a significant amount of money in the absence of congressional action.”