Reagan Says He’ll Sign Bill to Cut Deficits

Despite misgivings about harming his defense buildup, President Reagan said Tuesday night that he would sign into law a sweeping deficit-slashing plan agreed to by House and Senate negotiators earlier in the day.

The announcement, which ended weeks of waffling by Reagan over the measure, will avert a looming government cash crisis that had threatened to force a shutdown of many federal agencies at midnight tonight.

“I strongly endorse the measure and urge Congress to act quickly and make this the law of the land,” the President said shortly after a House-Senate conference committee agreed to the final shape of the program.

Both chambers are expected today to pass the so-called Gramm-Rudman initiative, designed to bring the bloated federal deficit into balance by fiscal 1991 through spending cuts in each fiscal year of about $36 billion. By 1991, if all goes as planned, the defict would be eliminated.

Rise in National Debt

The program is linked to a rise in the national debt ceiling to $2 trillion from $1.8 trillion, which must be passed by the end of the day or the government will run out of operating cash and be forced to shut down.

Also Tuesday, the Senate approved on a voice vote its $489-billion version of another major spending measure needed to fund the operations of most government programs, including defense, after the present authority expires at midnight Thursday. The House last week passed a $480-billion version of the bill, which Reagan has threatened to veto as too stingy on defense but too expensive overall.

Negotiators for the Senate and House still must reconcile their differences over the legislation, designed to keep the agencies running through next Sept. 30. Because they are not expected to reach a consensus before the Thursday deadline, an additional brief extension of spending authority may be necessary.

The thorny budget-slashing issue was resolved after two months of intense partisan haggling that tied Congress in knots and several times brought the government to the brink of default, forcing the Treasury Department to borrow from the Social Security trust fund to raise cash.

The panel of House and Senate conferees endorsed the landmark legislation on a voice vote and with virtually no debate as they rushed to finish business and get to the annual White House Christmas party.

In its final form, the measure would require the Pentagon to absorb about half of all mandatory budget cuts that would take effect if government spending exceeded a descending series of annual budget targets. The White House, after initial grumbling, acceded to the 50-50 split but sought the flexibility to apply the spending cuts in defense programs as it saw fit.

Some Flexibility

In the end, it got some--but not all--of the flexibility it desired. In a four-paragraph statement issued after the committee vote, Reagan said that he welcomed the compromise but was still “concerned that in the extreme it could have adverse effects on maintaining adequate levels of defense spending.”

Reagan’s decision came despite a desperate, last-ditch effort by the Pentagon earlier in the day to scuttle the measure.

At a briefing for reporters, Defense Department spokesman Robert B. Sims complained that the cuts that would be mandated by the Gramm-Rudman initiative “could be disruptive and damaging” to Pentagon programs and “would be putting us at risk in some of our important security areas.”

“It would be sending a message of comfort to the Soviets at a time when we’ve just seen them recognizing the sustained U.S. buildup in defenses, returning to the bargaining table, sending their general secretary to Geneva to meet with our President,” Sims said.

Could Hamstring Defense

House Armed Services Committee Chairman Les Aspin (D-Wis.) agreed that the measure could hamstring Reagan’s defense plans. But Aspin said that Reagan had only himself to blame because the President had endorsed the Gramm-Rudman concept several months ago before studying its impact on the Pentagon.

“He never should have gotten into it,” Aspin said. “ . . . They (the White House) played politics with this thing, and now they’re reaping the whirlwind.”

The Pentagon push Tuesday highlighted an apparent rift between Defense Secretary Caspar W. Weinberger and White House Chief of Staff Donald T. Regan. Defense officials complained that supporters of the balanced-budget program had sold Regan “a bill of goods” while promising to protect defense spending.

By the time Weinberger and Secretary of State George P. Shultz looked at the fine print in the measure, it was too late and the President had already endorsed it in principle, the officials charged.

“You have to ask if Donald Regan wants the same level of defense as President Reagan,” one Administration official said.

Possible Pentagon Targets

Although Pentagon officials refused to disclose specific targets for reductions, Sims indicated that, if cuts must be made immediately, the Pentagon dollars that are spent in the same year they are allocated--particularly those going to meet personnel costs--would be at the top of the list. Funds for major weapons, such as submarines, are spent over several years, and reducing such projects would not necessarily produce major, immediate savings.

“Some very tough decisions would have to be made, and it would be very disruptive for the Joint Chiefs and the secretary to decide on how to make these cuts in the middle of the year which had already been planned and programmed,” Sims said.

The Gramm-Rudman plan is named for its sponsors, Sen. Phil Gramm (R-Tex.) and Warren B. Rudman (R-N. H.).