Defense Slashed in Budget OKd by House Panel

The heavily Democratic House Budget Committee approved a fiscal 1987 budget plan Thursday that would slash defense spending below today’s levels and follow the Republican-led Senate in proposing more than double the amount of new taxes recommended by President Reagan.

Approval of the $1-trillion House committee package, which was endorsed on a 21-11 vote a week after the Senate passed no more than an inflationary increase in military spending, makes it virtually certain that Congress will reject a continuation of Reagan’s defense buildup this year.

Moreover, if it is approved by the full House, the committee recommendation would set the stage for a showdown with Reagan, who has threatened to veto tax increases beyond the relatively modest ones that he has proposed himself.

Accounts for Deficit

The House committee package, like the Senate-passed plan, contains $7.3 billion in taxes beyond the new taxes in Reagan’s budget proposal. However, the committee has earmarked at least $4.7 billion of those revenues specifically for deficit reduction below the levels required by the new Gramm-Rudman balanced-budget law.

Committee Chairman William H. Gray III (D-Pa.) pronounced the package “fairer and more equitable” than either the President’s budget or the Senate plan because it would devote more of its revenues to deficit reduction and take a smaller share of its cuts from domestic programs.

But committee Republicans roundly denounced the package, and only one sided with Democrats to approve it. The sharp partisan division suggests that the plan will face strong GOP opposition when it comes to the House floor next week.

The question of GOP votes will be a critical one. The House Democratic leadership--fearful that the White House could use the tax issue as a political weapon against their party--has made it clear that it is prepared to jettison the bulk of the additional taxes--the $4.7 billion set aside for deficit reduction--unless the plan draws support from House Republicans.

However, the committee plan drew stinging criticism from the Pentagon, where spokesman Robert B. Sims said that the committee’s proposed $35-billion cut from President Reagan’s defense request would “destroy the recent and impressive momentum we have made in rearming America.”

“The proposed House Budget Committee targets represent political bargaining positions,” Sims told reporters. “The President’s budget request represents real national security requirements.”

Committee Republicans tried several times with no success to increase the defense figure, which amounts to an $8-billion reduction from present spending rates, adjusted for inflation.

‘Unrealistic Figure’

“It’s an unrealistic figure. Everyone knows that,” Rep. Delbert L. Latta (R-Ohio) said as he led a futile effort to increase the defense-spending figure by $19 billion to the $301-billion level approved by the Senate.

The White House has insisted that even the Senate-passed figure--which would allow the Pentagon budget to grow only as fast as inflation of about 3%--is unacceptable and has continued to press for its requested increase of 8% after inflation.

Committee Democrats maintained that their defense proposal will give them the political high ground, particularly in the wake of revelations over the last few years of fraud and waste in Pentagon spending practices. “The public no longer supports the increases that the President wants,” Rep. Thomas J. Downey (D-N.Y.) said.

Noting that the government has spent about $1 trillion on defense under Reagan, he said: “The American people are indeed concerned that while there are improvements (in military strength), there are not $1 trillion in improvements.”

Below Gramm-Rudman Target

Overall, the committee plan would yield a $137-billion deficit, which is well below the $144-billion target set under the Gramm-Rudman law.

Unless Congress enacts a budget resolution that would bring the deficit down to that target figure, the law would force sweeping and painful automatic spending cuts. Committee members said that the additional savings will give them “running room,” in case the deficit does not live up to present forecasts and the economy worsens.

The House committee plan would make roughly the same amount of domestic cuts as the Senate-passed budget, although it would distribute those reductions somewhat differently. The committee plan would provide more funds, for example, for low-income and education programs, with particular emphasis on those aimed at children.

The committee also approved an amendment, sponsored by California Rep. George Miller (D-Martinez), that would set aside $250 million next year toward holding down increases in the out-of-pocket costs paid by Medicare recipients.

Near the end of its deliberations, the committee staged what some members said was an embarrassing reversal that demonstrated the clout that could be exercised by a well-organized, if somewhat obscure, lobby.

Only two hours after voting with little fanfare to delete $111 million in price supports for honey, the committee voted 17 to 10 to put the money back into the budget.

Committee sources said the move came after a swarm of honey lobbyists convinced committee members that they could force the House Agriculture Committee, which would ultimately make the cut, to take the funds out of some other program instead. The amendment to restore the funding was sponsored by California Rep. Vic Fazio (D-Sacramento) and Rep. Pat Williams (D-Mont.).

Times staff writer James Gerstenzang contributed to this story.