Budget Calls for $7.3 Billion in New Taxes

United Press International

Senate budget negotiators proposed a budget today calling for $7.3 billion in new taxes to be used to pay for defense and a few other programs, hoping to force a compromise on next year’s budget.

The Senate proposal, made by Republicans and Democrats, would split major differences between the House and Senate on defense spending and then allow extra money if Congress and President Reagan agreed to raise taxes to pay for it.

“We’re saying if you want to do new things and provide for defense . . . this will do it,” said Senate Budget Committee Chairman Pete V. Domenici (R-N.M.).

White House Silent


Domenici said the White House, which had previously rejected the idea of raising taxes to pay for anything, has not yet responded to the Senate’s proposal.

But Domenici said the idea is to force Reagan to accept new taxes if he wants to preserve his military buildup. The taxes called for by the Senate budget are $7.3 billion above the amount Reagan requested.

House budget negotiators did not immediately respond to the proposal.

Under the plan, $293 billion would be allowed for the Pentagon in fiscal 1987, splitting the difference between the House-passed amount of $285 billion and the Senate’s $301 billion. That number could rise only if new taxes were approved to pay for it. Reagan had wanted $320 billion for the Pentagon.


Opposition Repeated

White House chief of staff Donald T. Regan met with Senate GOP leader Bob Dole of Kansas and Domenici Thursday and once again reiterated the President’s opposition to new taxes.

Rejecting the proposal, Regan said there were “other ways” of gaining revenue--specifically selling government assets.

“You could get any amount (of money) you want (with that method,)” Regan told reporters following a one-hour private meeting.


But Domenici and Sen. Lawton Chiles (D-Fla.), the leading Budget Committee Democrat, dismissed the idea of selling government assets and said they were not close to agreement with the White House on the budget.