Chiles Says He’d Restore Defense Cuts for Tax Hike

Senate Budget Committee Chairman Lawton Chiles (D-Fla.), struggling to build a coalition to pass a budget resolution on the Senate floor, offered Tuesday to add $7 billion in defense spending but said it would have to be financed by higher taxes.

Chiles called his plan “pay for defense,” saying he would restore all of the military cuts originally adopted by his committee if President Reagan accepts a budget package with tax increases.

Republicans immediately denounced the offer. Sen. Pete V. Domenici (R-N.M.) said it would “hold defense hostage.”

“You won’t provide for the national defense, and the President won’t be able to get it unless he agrees to new taxes,” Domenici said.

Second Week of Debate

The Senate is in its second week of debate on the budget resolution, which sets the broad limits for federal spending in the 1988 fiscal year, beginning Oct. 1. The House has already passed a resolution calling for significant defense cuts and tax increases, and the two chambers must agree on a compromise measure.

However, Chiles has been unable to assemble a majority on the Senate floor for the spending plan adopted by his committee. His new plan, restoring the $7 billion in military cuts, is designed to win the support of several Democrats who insist on more for defense.

The Senate is expected to vote on the measure later this week. It is uncertain whether Chiles’ tactic will prove to be effective.

“If the Congress and the President want more defense spending, we will have to raise the money to get it,” Chiles said in offering his new proposal. “If the revenues don’t go up to pay for the extra defense spending, the level of defense spending doesn’t go up either. I think this is a fair way to get things done.”

Chiles’ revised budget plan now calls for $18 billion in new tax revenues. The Senate Finance Committee would determine which taxes should be increased.

Reagan Vows Veto

President Reagan has vowed to veto any tax hikes but some Democrats believe he can be persuaded to accept increases in the federal taxes on gasoline, cigarettes or alcohol.

In rewriting his budget plan, Chiles also made concessions to other senators who want more spending for education and Medicare.

Chiles needs overwhelming support from the Democrats to adopt a budget resolution because the Republicans have refused to join in preparation of the spending plan, citing the provision for tax hikes and complaints about inadequate defense funding.

The new plan, said Domenici, who was chairman of the Budget Committee when Republicans controlled the Senate, is “grossly unfair.”

The budget resolution provides limits for broad categories of government spending. It will be followed later by appropriations bills that will set the specific allocations for each federal program.