Reagan Opens Fight Against Democratic Budget Plans : Warns That Any Tax Measure ‘That Makes It Into Oval Office Won’t Make It Out Alive’

President Reagan on Monday opened a tough partisan campaign against the Democratic budget and tax programs, vowing that “any tax bill that makes it into the Oval Office won’t make it out alive.”

The Senate and House, both controlled by Democrats, are expected this week to approve a $1-trillion federal budget resolution calling for $65 billion in higher taxes over the next three years.

“The tax-and-spend crew might as well just face the fact--there isn’t going to be any tax hike in this Administration,” the President told workers and families of the Dictaphone Corp. at a company picnic.

Uses Strong Language

The President used some of his strongest language as he began a summer-long drive for more White House control over the budget. “What there is going to be is a Capitol Hill cleanup--a radical reform of the budgetary politics that pays for today’s excesses with tomorrow’s money,” he said.

White House strategists believe that a hard line on budget issues will enable the President to recapture the image of decisiveness and determination that may have been dissipated by the continuing concern over the Iran- contra affair.

The White House is prepared for months of political confrontation with the Democrats, who control both houses of Congress for the first time since 1980 and are determined to prove that they can govern effectively.

“I have agreed to have members of my Administration sit down with Congress and talk about the budget process,” Reagan said during his second speech of the day, an address to a luncheon of the Melbourne Chamber of Commerce. It was the first time that the President has publicly discussed negotiations with Congress, discussions that so far have been tentative and informal. The Democrats want a budget “summit meeting,” with the President participating and with taxes on the agenda.

There seems little ground for compromise, because the Democrats’ budget plan would increase domestic spending and raise taxes, both ideas abhorrent to the President. “Raise taxes, cut vital defense programs and increase domestic spending by tens of billions; if you’ll permit me, there they go again,” Reagan told the Chamber of Commerce in a reprise of a line he has used to attack Democrats in the past.

Pressuring President

After weeks of squabbling, the Democratic leaders in Congress agreed last week on a budget plan linking taxes and military spending in a way calculated to put maximum pressure on the President.

If Reagan accepts the increased taxes, $19 billion next year, he would get a budget with $296 billion in military spending authority under the Democratic plan. If he rejects the higher taxes, military spending would be frozen at current levels, $289 billion.

The President wants a higher level of military outlays but says he will not accept any higher taxes. He does not trust the Democrats’ assertion that tax increases would help reduce the massive budget deficit.

“Some in the Congress are reverting to their old habits of tax and tax, spend and spend,” Reagan said at the Dictaphone employees’ picnic. “They’re squandering your hard-earned money on politically motivated spending projects and special-interest payoffs.

“Well, I say no way. No way are the American people going to be made to foot the bill for the tax-and-spend crew on Capitol Hill.”

Republican senators gave the President a giant pencil at a Capitol Hill luncheon last week. “I’m keeping that pencil at the ready in my desk,” he said, “and, believe me, any tax hike bill that makes it into the Oval Office won’t make it out alive.”

The President promised to travel the country, stumping for budget reform. But he will be pushing proposals with negligible chance of acceptance by the Democratic majorities in Congress. These include a constitutional amendment requiring a balanced budget and a line-item veto that would allow him to reject parts of spending bills he does not like.

Employment Triples

Reagan chose Melbourne as the kickoff site of his campaign. It is a city of 56,000 where employment has tripled in the last 10 years because of a fast-growing electronics industry.

“The so-called budget process has become an embarrassment to the American way of governing,” Reagan said. “And that’s why I have come to you, the American people, asking for your support to put pressure on Congress to bring reliability and credibility to the federal budget process.”