Senate Votes Plan Tying Defense to Tax Increases

In a direct challenge to President Reagan, the Democratic-controlled Senate Wednesday night approved a $1.1-trillion federal budget resolution that supports increased military spending only if Reagan accepts the idea of higher taxes.

The spending plan, by Sen. Lawton Chiles (D-Fla.), the Budget Committee chairman, was passed 56 to 42, with the vote mostly along party lines. The measure calls for about $18 billion in tax increases from sources other than higher rates on individual or corporate incomes. That would likely mean raising the federal gasoline tax or the levies on cigarettes and alcohol.

“This debate is about whether we borrow more money or live within our means,” Chiles said in appealing for the tax-increase provision.

The Republican budget expert, Sen. Pete V. Domenici of New Mexico, called the resolution “a tax-raising measure, not a budget based on any kind of fiscal restraint.”

‘Pig in a Poke’

“This budget is never going to be enforced. There is no way Congress is going to buy this pig in a poke,” Domenici said.

With final passage, the Senate resolution goes to a conference session Tuesday with the House, which has adopted a spending plan with smaller military outlays and more money for education and job training. Both chambers have a tax goal of $18 billion in new revenues.

The compromise budget resolution that emerges will set limits for broad categories of government spending during fiscal 1988 year, which begins Oct. 1. Specific allocations will be established later by congressional appropriations committees. Tax measures, too, must be adopted by both houses of Congress and are subject to presidential veto.

To secure the support needed to pass the resolution, Chiles revised his original proposal to allow more money for defense, education and health care programs, but the plan links higher taxes and defense spending in a manner unpalatable to Reagan, who has threatened to veto any tax increase.

Since the Administration protested the $7-billion cut from defense spending in Chiles’ original proposal, it should be willing to pay to get that money restored, the Florida senator argued.

Specter of Servitude

Unless more revenue is generated for needed programs, the American people will become “indentured servants” of the foreigners who buy the Treasury Department securities that finance the national debt, he said.

“We’re going to work for the Japanese, work for the Germans, work for the French,” because of the borrowing to support a $2-trillion debt, Chiles said.

Republicans charged that requiring a tax increase was tantamount to holding the defense budget “hostage.”

“Our analysis is very simple,” White House spokesman Rusty Brashear said. “They are proposing to raise taxes and cut defense spending, and we think that’s wrong.” Even with Chiles’ new budget figure, defense outlays would be much less than the amount the President sought.

The debate Wednesday had a strongly partisan tone.

The majority leader, Sen. Robert C. Byrd (D-W. Va.), said the resolution was “a victory for common sense,” passed despite the refusal of the Republicans and the President to participate in negotiations. “The President thinks this is a spectator sport; he’s a no-show,” Byrd said.

Sen. Pete Wilson (R-Calif.) denounced the resolution as a “fiction” and a “sham.”

Politically Unpopular Idea

The country has no appetite for higher taxes, said Sen. Bob Dole (R-Kan.), the minority leader and an undeclared candidate for his party’s presidential nomination. In his travels, Dole said he has found that the people “are not saying, ‘Please raise my taxes if you want to be elected to some other office.’ ”

The budget resolution approved Wednesday proposes total spending of $1.1 trillion and a deficit of $134 billion.

The projected deficit would exceed the $108-billion target figure set by the Gramm-Rudman law, which calls for elimination of the debt by 1991. Congress is likely to accept the $134-billion figure, however, because it represents progress toward closing the huge gap between revenues and spending. This year’s deficit is expected to reach $174 billion.