Defense Major Issue as Budget Sessions Begin

House and Senate negotiators offered good intentions but underscored their differences over defense spending Tuesday as they began what could be a long and bitter effort to work out a final congressional budget resolution for 1987.

House Budget Committee Chairman William H. Gray III (D-Pa.) noted hopefully that there are “more similarities than differences” between the versions of the budget that were passed by the House and Senate.

“I wish I could share your optimism,” Senate Budget Committee Chairman Pete V. Domenici said from across the conference table. “We are substantially apart.”

And House negotiator Marty Russo (D-Ill.) said that the House will be “very, very vehement” about its defense spending proposal.

Confrontation Possible

Both the House and the Senate budgets could force a confrontation with the White House over the issue of new taxes by calling for $7.4 billion in new revenues beyond the relatively minor increases that Reagan has said are the maximum he will accept. The two budgets also reject about half of the domestic spending cuts that Reagan recommended.

“For the first time in my eight years in Congress, the budget fully protects education and low-income programs,” Rep. Pat Williams (D-Mont.) said.

Where the two plans differ sharply is over military spending. While the Senate would provide $301 billion for defense, enough to keep the Pentagon budget abreast of inflation, the House budget would cut defense spending by 5% below that figure to $285 billion. Both proposals fall well below Reagan’s request of $320 billion, or roughly 8% beyond projected inflation of 3%.

Hanging over the House-Senate negotiators is the threat of painful automatic spending cuts mandated by the new Gramm-Rudman budget-balancing law. Those cuts, to be made equally from nearly all government programs, will take effect if Congress fails to cut the deficit, projected at more than $170 billion under current policies, to $144 billion.

Projected Deficits

The Senate budget projects a deficit of exactly $144 billion and the House budget includes a deficit of $137 billion.

“I sense this wedding we are at today is not strictly one of convenience,” warned Sen. Lawton Chiles of Florida, the Senate Budget Committee’s top-ranking Democrat. “I suggest there is a shotgun. We need to get this marriage together in time for an event we know is going to happen.”

Pending tax-overhaul legislation could ease the burden of meeting the Gramm-Rudman target. The version of the bill passed by the House would bring in about $7 billion in additional revenue the first year, while the bill pending before the Senate could reap a $22-billion windfall.

However, leading negotiators for both the House and Senate have expressed reservation about counting upon those additional revenues to meet the Gramm-Rudman target.