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Congress Gives Final Approval To Budget Balancing Plan

December 12, 1985

WASHINGTON (AP) _ Congress gave final approval Wednesday night to a novel bill designed to wipe out the nation’s $200 billion deficits by 1991. But a rebellious House also sidetracked far-reaching tax overhaul legislation - forcing President Reagan to scramble in a bid to resurrect his top domestic priority of the year.

With Congress struggling to wrap up its work for the year, the House met late into the evening before adopting the landmark budget balancing plan on a vote of 271-154 The Senate gave its assent earlier, 61-31, rejecting allegations that the bill was ″unthinking, unnecessary, unwarranted and perhaps unconstitutional.″

Despite the criticism, Senate Majority Leader Robert Dole said, ″We made history of some kind. We’ll see how it works next year.″ The plan, attached to an urgently needed measure raising the debt limit above $2 trillion, would require defense and domestic program cuts of $11.7 billion early next year as a down payment on the deficit. The White House said President Reagan would sign the measure ″first thing in the morning.″

″With his assurance, the Treasury and the Federal Reserve will be able to continue normal finanail operations without interruption,″ White House spokeswo man Denny Brisley said in a statement.

In the House, the 223-202 vote to bottle up the most sweeping change in the tax laws in a lifetime was sparked by Republicans acting in defiance of President Reagan’s wishes.

House Speaker Thomas P. O’Neill Jr., said the vote showed Republicans had ″turned their backs on the man who had brought them victory and pride,″ but said Democrats were ready to try again with the tax bill if Reagan could produce enough GOP votes to assure success.

The president responded by dispatching top aides to the Capitol and summoning recalcitrant GOP lawmakers to the White House. ″The president said to me, ’I hope you will not let me down,″ said one visitor, Rep. William Carney, R-N.Y..

Reagan himself appeared before reporters and television cameras and said, ″ We do not believe that after all our good-faith efforts on both sides of the aisle, that our work should be lost for lack of a handful of votes.″

Republican leaders insisted the stunning vote was not a defeat for the president, but O’Neill, D-Mass., had another interpretation. ″Today, with glee in their faces, Republican congressmen voted to humiliate the man who had led them to victory,″ he said.

O’Neill added, ″If the president really cares about tax reform, then he will deliver the votes. Otherwise, Dec. 11 will be remembered as the date that Ronald Reagan became a ‘lame duck’ on the floor of the House.″

The drama on taxes and the balanced budget plan unfolded on the House and Senate floors as leaders of the two houses began negotiations on a mammoth, catch-all spending bill needed to replenish federal coffers for the current fiscal year by Thursday at midnight. In early maneuvering, the Senate agreed under administration pressure to drop a $55 million emergency job training program for Vietnam Veterans.

In a separate room in the sprawling Capitol complex, meanwhile, lawmakers labored to draft long-term farm legislation.

Senate Majority Leader Robert Dole told reporters there was ″still a glimmer″ that Congress could close up shop by the end of the week, even though Reagan was holding out veto threats for any spending or farm measure that he deemed too costly.

Lawmakers had long ago given up hope of enacting tax overhaul legislation this year. They had settled instead on a strategy of moving a bill through the House and postponing Senate consideration until next year. Reagan has placed the issue at the top of his second-term domestic agenda, and urged lawmakers to approve a Democratic-drafted plan as a ″first step.″

But on the 223-202 vote, lawmakers refused to consider either the Democratic plan or a GOP alternative, with 164 of 182 Republicans joining 59 Democrats in opposition.

Republicans sought to shield Reagan from political fallout.

″I don’t think this is a defeat for the president,″ said Rep. Jack Kemp, R-N.Y., and a leader of the drive for major tax revision. ’We don’t think the reform movement is over ... It is just starting.″

Rep. Dick Cheney, R-Wyo., said sponsors of the Democratic plan were ″never able to produce evidence it would produce economic growth.″

The blueprint for a balanced budget was worked out during weeks of tedious negotiations, and would trigger automatic spending cuts in defense and domestic program if Congress did not meet pre-designated deficit reduction targets for each of the next five years.

The first cuts would total $11.7 billion, and would be made early next year. Social Security and several poverty programs would be exempt from the cuts, while the reductions would be cushioned for Medicare and certain other health programs.

Sen. Bob Packwood, R-Ore., called the measure the ″last significant opportunity to deal with the deficit,″ which has exploded during Reagan’s five years in office from roughly $50 billion a year to more than $200 billion in the fiscal year that ended last Sept. 30.

But critics of the plan said the required spending cuts would be so large that the measue would actually pave the way for tax increases, and Sen. J. Bennett Johnston, D-La., said the plan was an invitation to a train wreck. ″We’re either going to have to dream that impossible dream of agreement with the president (on cuts to reach the deficit targets) or we’re going to have that automatic thing take over,″ he said. ″You’re going to have to take the blame for it and there’s going to be a lot of blame.″

Sen. Alan Cranston, D-Calif., said the proposal was ″unthinking, unnecessary, unwarranted ansd perhaps unconstitutional.″

On the spending measure, negotiators needed to reconcile a $490 billion Senate-passed measure with a $472 billion bill approved by the House.

Officials said one key sticking point was likely to be defense spending, where the administration is calling for the Senate level of $282.6 billion. The House measure provides $268.8 billion for the Pentagon.