House Expected to Approve Budget Reagan Opposes

The House is expected to approve a fiscal 1987 budget package today that President Reagan has insisted is “totally unacceptable,” because it would slash defense spending and raise taxes $7.3 billion above the level the President has said he will accept.

The House will consider three budget alternatives, including one sponsored by the Republican minority, but those options are not believed to have a significant chance of prevailing against the proposal passed last week on a party-line vote by the Democrat-controlled House Budget Committee.

Nonetheless, because the committee budget plan faces potential opposition from both ends of the political spectrum, “I think it will be close,” House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.) said as debate on the budget began Wednesday.

Defense Spending

Republicans and some conservative Democrats object to the tax increase and defense cuts in the plan, but even the GOP alternative would leave military spending below the level approved May 2 by the Republican-led Senate. The GOP package would authorize $293 billion in new defense spending next year, which is between the $285 billion proposed by the House Budget Committee and the $301 billion approved by the Senate.

In contrast, Reagan asked for $320 billion.

The Senate’s budget, passed over Reagan’s objections with votes from a majority of each party, proposes exactly as much in new taxes as the House committee plan.

Rep. Trent Lott of Mississippi, the House’s second-ranking Republican, charged that the Democrats’ “liberal left wing,” seeking higher taxes but afraid of political criticism, decided to “take that amount (of taxes) and hide behind the Senate’s bipartisan skirts.”

‘Best Medicine’

On the other side, some liberals have complained about the reductions the committee budget would make in a wide range of domestic programs. House Budget Committee Chairman William H. Gray III (D-Pa.) asked those critics to “look at the forest, not just one tree that grows in their garden. . . . All of us will suffer.

“It is the best medicine for an America that is getting terribly sick of red ink.”

But Rep. Delbert L. Latta of Ohio, the committee’s ranking Republican, insisted that Americans would prefer the GOP alternative of further domestic spending cuts to the tax increases and military reductions in the Democratic plan.

What forces such trade-offs this year is the new Gramm-Rudman law, which would require Congress to pass a budget that will yield a deficit of no more than $144 billion--almost $40 billion less than what it is expected to be under present spending policies. The law, which is being challenged in court, would make wide-ranging automatic spending cuts if Congress fails to pass laws that bring the deficit within $10 billion of that target.

Two Alternatives

The House will also consider two other budget alternatives.

One, offered by the Congressional Black Caucus, would protect domestic spending by increasing taxes and cutting defense further than the amounts proposed under the Budget Committee plan.

Another, by California Rep. William E. Dannemeyer (R-Fullerton), would allow defense spending to grow 3% a year more than inflation and would hold domestic spending at current levels.

Dannemeyer proposes to meet the deficit target by setting the value of the dollar to a fixed weight of gold. Returning to the gold standard would lower interest rates enough to cut the deficit well below the Gramm-Rudman target, Dannemeyer asserts.