Darman Responds to Democratic Critics With Offer of Budget Plan Compromise

Under heavy fire from hostile Democrats attacking President Bush’s day-old spending blueprint, Budget Director Richard G. Darman signaled Tuesday that the Administration is ready to negotiate with Congress on alternative proposals.

Darman dutifully defended the President’s good faith and willingness to make tough budget choices even as he hinted at possible compromises in testimony to the House Budget Committee.

Even Rep. Bill Frenzel (R-Minn.), ranking GOP member on the panel, said of the new $1.23-trillion budget: “I suspect it’s not going to be Congress’ cup of tea.”

Rep. Marty Russo (D-Ill.) sharply accused the Administration of concealing the true deficit through use of accounting gimmicks.

“This budget process stinks and lies,” Russo shouted.

Darman, showing signs of flexibility, replied: “I do look forward to alternative proposals--we’re not going to walk away from the process.”

Another senior Republican on the panel, Rep. Bill Gradison of Ohio, deplored the partisan rhetoric but indicated he favored budget changes as well. “The Administration has given us its best shot,” he said. “Now it’s up to us.”

Cuts Called Unrealistic

Critics charged that Bush had proposed unrealistic cuts in popular domestic programs that Congress never would accept to achieve a $63.1-billion deficit, barely meeting a congressional target that would avoid automatic spending cuts.

The mood was testy as Darman made his first appearance on Capitol Hill to advocate the first budget developed by the Bush Administration, but he got faint praise from one Democrat, Rep. Jerry Huckaby of Louisiana.

“You at least have left a mark here where we can negotiate,” Huckaby said.

At the outset of the five-hour hearing, Rep. Leon E. Panetta (D-Carmel Valley) told Darman: “Both Democrats and Republicans will demand greater defense reductions, including troop cuts in Europe and high-ticket strategic weapons.”

While acknowledging that Congress was likely to trim the $306 billion Bush proposed for military outlays in the year starting Oct. 1, Darman said estimates of the potential size of the “peace dividend” this year were highly inflated.

Later, replying to prodding from Rep. James L. Oberstar (D-Minn.), he added: “I agree with you that many Americans want to spend less on defense. I think the public has an inflated expectation of what is possible.”

While larger than this year’s defense budget in dollar terms, the President’s proposed defense budget for fiscal 1991 represents a reduction of about 2% from the amount that would be needed to keep up with inflation.

No Support for Freeze

Asked whether military outlays could be frozen at the current level, Darman replied: “I’d be surprised if you actually go for that. . . . When people discover what has to go to get that much (of a cut), they may not vote for it.”

A controversial proposal by Sen. Daniel Patrick Moynihan (D-N.Y.) to reduce Social Security payroll taxes by $62 billion was criticized by Darman on grounds that it would result either in lower retirement benefits or an offsetting increase in income taxes.

“My personal opinion is that he (Moynihan) never intended the plan to be taken as seriously as it was by the media,” Darman said. “He intended to use it as a bargaining wedge.”

Chairman Panetta, however, said that he had spoken to the New York lawmaker. “He’s quite serious about the proposal,” Panetta said.

The sharpest criticism of the director of the Office of Management and Budget, however, came from Russo, an eight-term Chicago Democrat.

“Dick, you don’t know what a tough choice is,” Russo told Darman. “A tough choice for me is cutting $5 billion from Medicare. A tough choice for you is soaking the rich, raising their taxes.”

Darman argued, however, that the President’s proposals to deny cost-of-living increases for retired federal employees and to lower Medicare payments to hospitals and doctors by $5.5 billion have been politically costly for Bush.

Hints at Compromise

When Rep. Ed Jenkins (D-Ga.) told him it was not possible for Congress to reduce Medicare outlays again this year, Darman again signaled his willingness to settle for less.

“We don’t expect to get every dime,” he said. “Let’s take smaller steps if we can’t take larger steps.”

Similarly, he said the Administration was ready to discuss its proposal to terminate a farmers’ crop insurance program if Congress gave some assurances that it would restrain the cost of drought relief or other farm disaster legislation.

“We’re flexible,” Darman said.

Unlike past occasions when he has charmed members of the committee with his quick wit, however, the hearing Tuesday was marked by angry outbursts and clashing opinions.

When Darman, for example, told Rep. Marcy Kaptur (D-Ohio) that the public does not care about the federal deficit, she snapped: “I think you’re dead wrong.”