Senators Scramble to Shape Budget Plan

Senate leaders, running out of time in deliberations on a proposed fiscal 1987 budget, scrambled late Thursday to strike a delicate compromise that would balance domestic spending cuts, military spending growth and new taxes, and that could win a majority of votes in the Senate and at least tacit approval from the White House.

The plan approved last month by the Republican-led Senate Budget Committee, which had drawn fire from President Reagan and almost half the Senate’s GOP majority, appeared doomed. However, it was unclear whether any viable alternative had emerged.

Senate Majority Leader Bob Dole (R-Kan.), after huddling in his office much of the day with key senators and White House Budget Director James C. Miller III, said that the group had come up with a package to present to Senate Democrats.

Could Delay Vote

Dole said he hoped to finish work on the budget late Thursday or early today, but it was possible that the Senate would put off the final vote until Monday. Although the Senate had almost finished the 50 hours of debate time allotted for the budget, it could delay a final vote by adjourning, calling a recess or voting to give itself additional time.

If no plan passes, budget writers would be forced to start again from scratch.

Dole did not disclose the details of his spending package, but it was believed to include more in defense spending and less in new taxes than the Budget Committee had recommended. His task was complicated by the fact that President Reagan was traveling in Asia and negotiators were having difficulty touching base with White House Chief of Staff Donald T. Regan.

Asked what he would do if top Administration officials reject the proposal, Dole replied with an imitation of a telephone operator: “Wrong number.”

The Senate’s ultimate goal is to approve a plan that would cut next year’s deficit by about $40 billion to a level of $144 billion. That is the target level set by the new Gramm-Rudman law, which would force wide-ranging and painful spending cuts automatically, if laws to reach that goal are not in place by September.

From the start, Reagan has argued that cutting social spending--rather than curbing defense growth or raising taxes--is the way to meet the Gramm-Rudman target. Budget Director Miller also has suggested relying on more optimistic projections for economic growth and spending that would make the task less difficult.

The Republican-led committee, however, turned Reagan’s spending priorities on end.

Its package would slash $25 billion from Reagan’s request for an 8% after-inflation increase in defense spending--cutting it to a level that critics said would not allow enough growth to keep military purchasing power abreast of inflation.

Rejecting half the amount that Reagan had asked in domestic spending cuts, the committee proposal also includes about $19 billion in new taxes next year. By comparison, Reagan had proposed a relatively modest $6 billion in additional revenues, to be raised largely through imposing fees for use of government services and selling off federal assets.

“Unfortunately, the Senate Budget Committee has taken a step in the wrong direction,” Reagan had written in a letter to Dole that was made public earlier this week. “They have relied on unacceptable tax increases and defense cuts.”

Dole, staging a display of rhetorical fireworks early Thursday, had waved a document on the Senate floor that he said was a newly discovered “smoking gun”--a copy of a budget proposed by House Democrats that did not include new taxes, and instead met the Gramm-Rudman target by making deep cuts in defense spending.

Political Weapon

If the Senate approved the committee plan, Dole warned, House Democrats would turn that vote for higher taxes into a political weapon against them by drawing an embarrassing comparison with their own tax-free budget.

“I’m not going to walk that plank for the House Democrats and their allies in the Senate,” Dole declared.

House Budget Committee Chairman William H. Gray III (D-Pa.) countered that Dole, finding himself in a political squeeze, was trying to “hide behind” what was actually “an out-of-date House Budget Committee staff working paper.”

“The House position is that additional revenues are needed, but that the House will not consider them until the President and the Republicans signal agreement,” Gray said.

Rep. Charles E. Schumer (D-N.Y.), one of the House Budget Committee members who had been working on the budget document that Dole criticized, insisted that the committee had not approved the plan, either formally or informally. In fact, he added, some committee Democrats had not even seen it.

‘Looking for . . . Excuse’

“Bob Dole doesn’t have the votes in the Senate (for his own budget proposal) and is looking for any old excuse, and a month-old House budget document will do,” Schumer said.

Senate Democrats also criticized Dole for employing what they said was a desperate diversionary tactic.

“We ought not be distracted by this red herring that’s purported to be the House budget,” Minority Leader Robert C. Byrd (D-W.Va.) said.

Sen. Lawton Chiles (D-Fla.), the Senate Budget Committee’s ranking Democrat, added that the budget debate was “reaching a point that everybody . . . is seeing all kinds of bogeymen.”