Party Civil War Stalls Work on Budget Resolution : House, Senate Democrats Battle Over Defense

WASHINGTON — Efforts to prepare a $1-trillion federal budget resolution collapsed Thursday as a civil war erupted among congressional Democrats over military spending.

Rebelling House conferees refused to accept a compromise fashioned by the budget leaders of their chamber. “There weren’t the votes for a higher defense figure. We will try again,” Rep. William H. Gray III (D-Pa.), chairman of the House Budget Committee, said after a closed meeting of House conferees.

Although the Democrats run both chambers of Congress, they are deadlocked over differences between Senate conservatives and House liberals. Both factions of Democrats want to cut President Reagan’s military budget, but the Senate has insisted on spending $8 billion more than the House would accept.

Feelings ran high Thursday among House liberals. “If the Republicans still ran the Senate and sent us this budget, we’d be kicking their ass all over town,” an angry Rep. George Miller (D-Martinez), a member of the conference, said in an interview. “To beat Ronald Reagan, we’re trying to imitate him.”

Leaders Offer Deal

Until Thursday, Senate and House budget leaders thought that they had a deal worked out calling for $19 billion in new taxes. Under this plan, defense spending would be frozen at this fiscal year’s levels unless Reagan accepts the tax increases.

“Without revenues, we don’t have enough money to do these things, defense or domestic,” House Speaker Jim Wright (D-Tex.) said Thursday, denouncing Reagan’s long-standing promise to veto any legislation that contains tax increases.

The Senate, meanwhile, is steadfast in its insistence on a defense spending figure of $289.6 billion, $8 billion more than the House proposal. “We thought we had a deal,” said Dennis Beal, spokesman for Sen. Lawton Chiles (D-Fla.), chairman of the Senate Budget Committee. “Sen. Chiles is very disappointed.”

Several key Democratic senators had insisted on bigger defense outlays in return for supporting the budget resolution offered by Chiles, who will meet again with Gray next week in their fourth week of efforts to fashion a compromise.

Issue Reveals Split

In the meantime, the issue is revealing an embarrassing philosophical and political split among the Democrats, who have been anxious to show that they can govern effectively since last fall, when they won control of both houses of Congress for the first time since 1980.

The budget resolution for fiscal 1988, which starts Oct. 1, has been one of their first key tests. The resolution establishes broad outlines for major categories of federal spending. Specific spending programs and taxes are handled through separate bills.

But the internal dispute that broke out Thursday illustrated the intensity of the current debate over budget priorities at a time of austerity imposed by a huge deficit.

Rep. Barbara Boxer (D-Greenbrae) said of the rejected budget compromise: “I have never voted against a budget. But at this stage, being honest, it’s a no-go for me. There’s no way I’m about to ask people to pay taxes for an already bloated military budget.

“Instead of spending this extra money for defense, we could have a Manhattan Project aimed at curing AIDS for $2 billion, spend another $2 billion to lift every poor woman out of poverty and use the rest to help reduce the deficit,” she said.

Conferees ‘Are Restive’

Rep. Vic Fazio (D-Sacramento) said that House conferees “are restive about paying more in taxes to get increased defense spending. But the Senate took an unalterable position. It sticks in the craw of some of the House members.”

However, Fazio said that the budget resolution probably will be approved eventually because the House has won commitments from the Senate conferees for additional spending for education, hunger programs and aid to the homeless.

Nevertheless, any military budget that the Democrats eventually approve is certain to be criticized as inadequate by Reagan, whose own budget plan calls for spending $297 billion, compared with $289 billion proposed by the Senate.

Democrats on the House Ways and Means Committee already have begun discussing ways to get the new revenues. The most likely targets are increases in the federal taxes on gasoline, cigarettes, distilled spirits and beer, as well as possible increases in the estate tax.