$8.5-Billion Hike Asked for Domestic Programs Is First Reagan Has Sought After Years of Cuts

After years of seeking deep cuts in many domestic programs to finance an arms buildup, President Reagan made his first request Thursday for an increase in those domestic programs--$8.5 billion.

The proposal in his new budget largely conformed to a “summit” agreement last November under which the Administration and Congress settled on a hike of about 2% in spending authority for both domestic and defense programs in fiscal 1989, which begins Oct 1. In fact, the Administration is seeking increases of 3.1% for domestic programs and 2.8% for defense.

Although the increases, on the whole, would not be enough to keep pace with inflation, they represent the Administration’s most generous treatment ever of domestic programs.

Last November’s budget pact was aimed in part at halting the raucous guns-vs.-butter fights that had dominated budget battles for seven years. But while the battles over the aggregate defense and domestic budgets may be averted this year, the Democratic-controlled Congress is expected to skirmish vigorously over several of Reagan’s specific domestic proposals.

‘Very Limited Pot’

“There is going to be a big priorities debate between the President and Congress, and within Congress, over how to divide up a very limited pot” for domestic programs, predicted Robert Greenstein, head of a group that lobbies for programs benefiting the poor.

Calls for large increases for education ($656 million) and the fight against AIDS ($600 million) are expected to be the most popular of Reagan’s proposals.

On the other hand, key lawmakers suggested that Congress will discard quickly several recycled Reagan proposals that have gone nowhere in the past. These include eliminating the Economic Development Administration and the Appalachian Regional Commission.

Separately, Reagan sought increases for another, much larger category of domestic programs--those that make direct payments to individuals.

Social Security will grow with inflation and the elderly population to $234 billion, up from $220 billion this year. Medicare growth, though constrained by last year’s summit agreement will still exceed $5 billion. In addition to Medicare cuts adopted last November, Reagan would tighten procedures by which doctors are reimbursed for their Medicare patients.

Discretionary Programs

But this year’s most contentious battles are likely over Reagan’s proposals to tamper with the so-called discretionary programs--those whose spending levels can be fixed on a yearly basis. Particularly likely to arouse congressional opposition are presidential proposals to boost spending on space, scientific research and law enforcement programs and to make further cuts in mass transit subsidies and social programs for the poor.

The battles on those issues could divide along regional lines and cut across political parties and ideologies.

For example, several states with bipartisan congressional delegations, such as Colorado and Texas, are competing for federal approval to build a Superconducting Super Collider for high-energy physics research. Lawmakers from these states presumably will back Reagan’s recommendation to spend $363 million in 1989 on the controversial project.

However, representatives of Frost Belt states with no chance of landing the Super Collider might want, instead, to use those millions to help restore a proposed 25% cut in fuel-bill subsidies for low-income residents.

Similarly, many urban lawmakers might want to trim a proposed 20% increase for space programs to restore recommended deep cuts in emergency food and shelter (33%), community services block grants (22%) and housing assistance for the elderly and handicapped (40%).

Nutrition Subsidies

“I have a feeling that Congress will keep most domestic programs at roughly their current levels, except for some increases for AIDS, education and perhaps nutrition subsidies for women and children,” said Rep. Leon E. Panetta (D-Monterey).

“My view is that Congress is likely to reduce the President’s dramatic space request and transfer the money to other programs already in place that impact communities, programs like housing, education and health research.”

But Senate Budget Committee Chairman Lawton Chiles (D-Fla.) charged that Reagan had “cleverly” made it difficult for Congress to change his domestic priorities.

He noted that the Administration had proposed about $10 billion in asset sales and other payment shifts, plus $4 billion in Medicare and Medicaid savings, to help finance the huge recommended increases in space, education and scientific research.

That combination will put Congress in a bind, Chiles said, because it will never approve the $14 billion in deficit reduction measures, yet it will be under pressure from special-interest groups to add to Reagan’s spending requests.

“In the past, the Administration low-balled education and NASA and the National Science Foundation,” Chiles said. “This year, they’re giving them pretty good numbers. The expectations are very high and the education people and others will say: ‘What the hell, you’ve got to add to that. That’s a floor, not a ceiling.’ And yet the dollars are not there.

Not ‘Clear Sailing’

“So, I don’t think it’s clear sailing,” Chiles concluded. “But the problems are not the magnitude that we’ve had before.”

The proposal to spend $2 billion on AIDS, a 40% increase over 1988, is the highest in the history of the seven-year-old epidemic. The figure includes $1.3 billion for research and public education and $736 million primarily to help pay for care of AIDS patients.

Rep. Henry A. Waxman (D-Los Angeles), chairman of the House Energy and Commerce subcommittee on health, praised the Administration’s request for research but termed the request for education “short-sightedly small.”

“The Administration still has not figured out that, without a cure or vaccine, AIDS education is our only hope for slowing the epidemic,” Waxman said.

Rudolph Penner, a senior fellow at the Urban Institute, predicted that Reagan will fare better on budget details this year than he has in the past, largely because the general amounts of money for defense and domestic programs already had been set in the November budget meetings between the White House and congressional leaders.

“I’ll bet the main increases are in the things he likes and the main cuts are in the things he dislikes,” said Penner, who was director of the Congressional Budget Office until a year ago.

Stanley Collender, director of federal budget policy for the Touche Ross & Co. accounting firm, said that his soundings indicate that whatever trims Congress makes in specific programs “will not impact on individuals much.

Little Voter Impact

“There may be restraints imposed on research and development, energy, some funding of government agencies,” he said. “To the extent federal employment is reduced, some individuals are affected. But that’s a small group of people and outside Washington they are not terribly important, voter-wise.

“Congress,” he added, “came up with a plan (at the budget summit) that would minimize disruption before the elections.”

Rep. Mickey Edwards (R-Okla.), a member of the House Budget Committee, lamented that the budget agreement was a boon for congressional Democrats.

“I don’t think there’s any question that the Democrats came out ahead,” Edwards said. “They managed to preserve a good part of their domestic programs and got the President to sign off on it. So they’re not going to be able to be hit in election campaigns with being big spenders because that money is in the President’s budget request.”

Sen. Phil Gramm (R-Tex.) conceded that the summit pact had eased the brakes on domestic spending.

“It was a political compromise that protected the most sensitive political programs without any real idea toward addressing long-term budget concerns but quite frankly it’s what you end up with in election years,” he said.

Gramm contended, however, that “explosive domestic spending” traditionally seen in such years had been restrained by the deficit-reducing law that he co-authored with Sen. Warren B. Rudman (R-N.H.).

“It’s sort of like the drug that prevents a cold from turning into pneumonia,” he said.