Democrats’ Budget Endorsed in House : Partisan Vote Approves Higher Taxes, Defense Cuts; Reagan Plan Defeated

The House, brushing aside President Reagan’s budget, Thursday approved a trillion-dollar Democratic budget resolution featuring higher taxes and lower defense outlays.

The 230-192 vote followed party lines as the Democrats insisted that the President must change his mind about tax increases. “Everyone in this town knows we can’t solve this (deficit) problem without significant revenues. The President knows that,” Rep. Marvin Leath (D-Tex.) said.

But Republicans were equally adamant in their rejection of new taxes. “If you vote for this proposal, you’re voting for more taxes,” Rep. Harold Rogers (R-Ky.) said. “Take that and tell it to your home folks.”

Objects to Cuts

President Reagan, in West Lafayette, Ind., for a speaking engagement, said that he objected to “cuts in defense that potentially threaten our national security,” saying that the Democrats were “passing the buck to pay for their excesses.”

“The process hasn’t worked. It’s time for something that’s enforceable, credible and reliable. I call on the Congress to recognize their process for what it is--out of control and ready to be fixed; that we should work together to meet that goal. At least one thing--they voted today,” he said.

Reading a statement, he said of the budget: “It’s been on the floor of the Congress, of the House. There’s an old saying: ‘If it ain’t broke, don’t fix it.’ In the case of the congressional budget and appropriations process, it hasn’t ever been fixed enough to be broken.”

The House resolution sets total spending guidelines for the federal government during fiscal 1988, which begins Oct. 1. But the specific spending levels for individual programs will be set later by the various committees as they consider appropriations bills.

The Senate will vote later this month on its spending resolution. The Budget Committee in that chamber has recommended a package of tax increases and spending cuts similar to the House program.

Before passing its spending blueprint, the House rejected the President’s budget by a vote of 394 to 27. Thursday’s House votes make clear the sharp differences in spending priorities between the Administration and congressional Democrats.

Defense Differences

The President wants to increase defense spending $8 billion above current levels, while the House voted for a $9-billion reduction, although it did not specify where the cuts should be made. Both budgets called for lower domestic spending, but the amounts differed widely: Reagan wanted cuts totaling $22 billion, compared with $9 billion ordered in the House resolution.

As opposed to the $6-billion hike in tax revenues supported by the President, the House resolution calls for $18 billion in unspecified new taxes. In addition, the Democratic plan projects $1 billion from increased tax enforcement and $2 billion from so-called user fees and premiums charged for governmental services.

Any tax increases would be imposed on gasoline, beer, wine and cigarettes, the burden of which would fall most heavily on “your middle-income, average taxpayer,” Rep. William M. Thomas (R-Bakersfield) warned.

But Rep. Dan Rostenkowski (D-Ill.), who would have to determine which taxes would be raised as chairman of the Ways and Means Committee, said: “I commend Speaker Jim Wright (D-Tex.) for having the guts to tell the American people increased revenues have to be part of the solution.”

Like the President’s budget proposal, the Democratic plan would provide full cost-of-living increases for Social Security beneficiaries and other retirees. However, it would continue to finance at lower levels urban and rural development grants that Reagan wants to abolish.

The House plan also would provide $28.7 billion for agriculture programs, a slight reduction from current levels but still $2 billion more than the President’s proposal.

In addition, the Democratic resolution calls for a $2-billion increase in spending for education, which the Reagan plan would have reduced. It also would boost spending for programs affecting trade, health and the homeless but would allow much less for foreign aid programs than the Reagan plan had proposed.

Overall, the House plan foresees $38 billion in taxes and spending cuts that would help reduce the budget deficit, compared with $36 billion in the White House plan. The House expects a deficit of $107.6 billion in fiscal 1988. Theoretically, this would comply with the $108-billion deficit level in the Gramm-Rudman law, which provides for gradual elimination of the deficit by 1991.

However, the Congressional Budget Office says that the economic forecasts in the budget are too optimistic and predicts that the House plan would yield a deficit of $132.5 billion. This would follow the pattern of recent years, when the actual deficit has exceeded the target established by Congress.

The Democrats’ victory Thursday was a partisan triumph: Not a single Republican joined the 230 Democrats who supported the budget resolution. Voting against it were 173 Republicans and 19 Democrats.

A tough partisan tone was expressed after the vote by the author of the spending plan, Budget Committee Chairman William H. Gray III (D-Pa.), who called Reagan “the Babe Ruth of deficits, the top banana of spending.”

“If the President wants to continue to play cowboy with the American economy, he can do so,” Gray said. “I do not know what will engage this President. Maybe he forgot he submitted a budget.”

Vow to Fight

But the House Republicans vowed to continue to fight. “I reminded Democrats that President Reagan has pledged to veto any broad new taxes,” said Rep. Delbert L. Latta (R-Ohio), the ranking Republican on the House Budget Committee. “Thus, if the Democrat majorities in both houses of Congress persist on new taxes, they could precipitate a stalemate.”

The budget fight will be much closer in the Senate, which the Democrats control by a margin of 54 to 46. A number of Senate Democrats have serious disagreements with their Budget Committee’s plan for defense cuts and tax hikes.

A plan offered in the House by Rep. William E. Dannemeyer (R-Fullerton), providing for domestic spending cuts of $26 billion, new revenues of $15 billion from a federal tax amnesty and the use of gold-backed bonds to retire the national debt, was defeated by 396 to 47.

A budget offered by the congressional black caucus, defeated by a 362-56 vote, would have increased domestic spending by $35 billion, with expanded outlays for health care, education and housing.