Assails Inaction, Signals He Won’t Compromise : Reagan Prods Congress on Budget

President Reagan blamed Congress on Saturday for inaction on the fiscal 1987 budget, indicating he is not ready to give ground on his own budget proposal or to begin working with Congress on a compromise.

His remarks in his weekly radio address suggested that, with Congress already lagging behind its self-imposed schedule for producing a spending plan, all the ingredients remain for a stalemate.

Reagan also hailed plummeting oil prices as a key cause behind “sustained and vigorous economic growth,” further dampening speculation that the White House is considering dramatic moves to slow the price slide that is smothering the economies of Texas, Oklahoma and other oil-producing states.

‘Misguided Thinking’

In urging Congress to accept his proposed budget, Reagan said: “Part of the problem here is misguided thinking. Many don’t understand that the real trouble isn’t just the federal deficit itself, but government overspending.”

However, congressional leaders of both parties have insisted that the priorities outlined in Reagan’s plan--sharp cuts in domestic spending coupled with 8% after-inflation growth in defense spending--have no chance of being enacted. They have urged the President to begin working with Congress to come up with an alternative that many say must include new taxes and a curb on defense spending.

To increase pressure on Reagan, the Republican-led Senate on Thursday voted 72 to 24 to refuse to consider a tax-overhaul plan until there is a budget agreement--in essence, indicating that it is ready to hold Reagan’s top domestic priority hostage until then.

Reagan fired back in Saturday’s talk, again criticizing the budget plan produced last month by the Senate Budget Committee. That proposal includes more than $18 billion in new taxes next year and a $25-billion cut in the White House’s Pentagon spending request.

“A tax hike now would only encourage the Congress to spend more. All we’ve worked so hard to achieve, all the good economic news, would be harmed,” Reagan said.

Veto Pen ‘Inked Up’

Although the President does not have the power to veto Congress’ annual budget resolution, he can block the subsequent tax and spending bills that carry out the broad goals outlined in the resolution. Reagan said that if Congress sends a tax increase to his desk, “my veto pen is inked up and ready to go. Sometimes a President just has to spell relief V-E-T-O.”

The House has not begun work on its budget resolution. House Budget Committee Chairman William H. Gray III (D-Pa.) has said that his committee is ready to consider several alternatives but wants to see what the Republican Senate does first. The Democratic-led House committee does not want to be in the forefront of a drive for a tax increase for fear that Reagan will use it as a political weapon against Democrats, as he did in his 1984 reelection campaign.

Reagan chided Congress for missing its deadline of this Tuesday for producing a budget resolution, adding that Tuesday is “the deadline American taxpayers must meet (by filing income tax returns) whether we want to or not.”

Congress has often missed its self-imposed budget deadlines in the past, but its schedule is viewed with more urgency this year because of the newly enacted Gramm-Rudman law. That law will force wide-ranging automatic spending cuts on Oct. 1, the opening of fiscal 1987, unless Congress has passed legislation reducing the deficit by almost $40 billion, to $144 billion.

Free-Market Policy

Reagan’s comments on oil prices came as Vice President George Bush ended a weeklong Middle East tour in which he had discussed with Saudi Arabian officials the Saudi-engineered worldwide oil glut that has driven prices to about one-third their November levels.

Bush had indicated before his trip that he would try to impress upon the Saudis the disastrous effects the decline is having on the U.S. oil industry, but the Administration insisted that it was not considering abandoning its policy of not interfering with world markets.

Reagan noted that falling oil prices have meant “a difficult adjustment” for some, but added: “Overall, less expensive oil represents a tremendous boom to our economy. . . . Isn’t it good to be able to put a gallon of gas in the car for less than a dollar again?”

The President also put in another pitch for a balanced-budget amendment and the power to veto individual items within spending bills. However, Congress shows no signs of going along with either request.