Democrats OK Budget Plan Hiking Taxes

Democratic conferees Thursday approved a $1-trillion budget plan, including $65 billion in higher taxes over three years but President Reagan called the package “an offer I can refuse.”

The Democratic budget plan was approved by a conference of House and Senate members despite unanimous opposition by Republican conferees. It is expected to win final congressional approval next week.

But Reagan, who has promised to veto any legislation calling for a tax increase, said in a statement issued by the White House: “The American people don’t want more spending. They want better results.”

Challenge to Reagan

The Democrats, who control both houses of Congress, are directly challenging the President by making an increase in defense spending contingent on his acceptance of higher taxes.

“If Congress has its way, national security will decline in real terms for the third year in a row,” Reagan said. “Their price for meeting our national security needs is this: For every $1 of defense it will cost $10 in new taxes. That’s an offer I can refuse.”

The dispute between the Democratic Congress and the Republican President will be heightened in July when the nation reaches its debt limit ceiling of $2.5 trillion.

Ceiling Linked to Budget

The congressional conference Thursday decided that legislation raising the debt ceiling should be included as part of the tax and budget bills being prepared by Congress, a move that would put additional pressure on the President to accept higher taxes.

Reagan spokesman Marlin Fitzwater said the plan’s call for $64.3 billion in taxes over the next three years, including $19.3 billion next year, was “a pickpocket way to lift your wallet to pay for your dinner. The President isn’t buying it and neither will the American people.”