Senate, Still Unable to Pass Budget, Breaks for 3 Days

The Senate, locked in dispute over budget reforms and unable to pass urgent legislation to keep the government from financial default, headed Friday for a long weekend.

Democrats and Republicans fought to a draw Thursday evening over how best to fix the Gramm-Rudman balanced budget law. They tried to pick up the pieces on Friday, but talks toward a compromise were not expected to bear fruit until next week at the earliest.

The dispute has blocked legislation to raise the ceiling on the national debt. All government credit, including U.S. savings bonds, was halted July 18 and unless debt legislation is approved next week the government will default on its obligations for the first time in history.

Short-Term Action Seen

Congress is expected to avert the crisis by passing an emergency short-term debt bill next week. However, with the Senate not in session until Tuesday, the Treasury will be forced to cancel its Monday auction of short-term securities for the second straight week.

The House has approved increasing the current national debt limit of $2.111 trillion to $2.565 trillion.

Meanwhile, the tax-writing House Ways and Means and Senate Finance committees have decided to delay until September any definitive action to raise the $19.3 billion additional revenue called for in the fiscal 1988 budget.

Sen. Lloyd Bentsen (D-Tex.), Finance Committee chairman, said: “The problem is that we can’t complete the (tax-increase) process before the August recess, and if we start before then, we are setting ourselves up for an ambush. . . .

“The lobbyists would go into a frenzy and have a full month to organize opposition to any proposals that emerged,” Bentsen said.