House Panel Approves $995B Budget Plan

WASHINGTON -- The Democratic-controlled House Budget Committee pushed aside Republican complaints yesterday and approved a fiscal 1987 budget that would slash military spending, freeze or trim most domestic programs and embrace a tax increase to reduce the deficit.

By a party-line 21-11 vote, the panel agreed to the $994.2 billion spending plan proposed by committee Chairman William H. Gray III, D-Pa. It would reduce the deficit next year to $137 billion, $7 billion below the Senate budget passed last week and well within the statutory limit of $144 billion.

Action by the full House is expected within two weeks.

As a series of GOP amendments to sharply alter the plan were defeated, Rep. Delbert L. Latta of Ohio, the panel's senior Republican, complained, "We were getting rolled all day" by the Democratic majority.

However, Gray defended the plan saying, "It would result in a lower deficit than the Senate plan, and achieves this by spreading the cuts more equitably. Spending cuts are divided almost equally between defense and domestic programs."

"Contrast that with the Senate budget, which places 86 percent of the cuts on the nonmilitary side of the budget," said House Majority Leader Jim Wright, D-Texas, a member of the committee.

The Democratic plan would cut military budget authority next year to $285 billion, $1.8 billion below the current level, and $3 billion of that would be held in abeyance until the Pentagon agrees to an audit of how past years' increases were spent.

The Senate approved a $301 billion budget for the military, while President Reagan requested $320 billion in budget authority, which includes some money actually spent over several years.

The low House figure would constrain new military programs but actual outlays of cash during the year would rise $6.7 billion to $276.2 billion.

Gray's proposed budget accepts the full $13.2 billion in new taxes passed by the Senate, but Democratic leaders remained wary. House Speaker Thomas P. O'Neill Jr. has warned that Democrats would be blamed for any tax increase above the $6 billion proposed by President Reagan unless it passed without Republican support.

As a result, $4.7 billion of the tax increase was dedicated to deficit reduction and put into a separate account that could be dropped. That would raise the budget deficit to nearly $142 billion.

The spending plan would peg total federal revenues for the fiscal year beginning Oct. 1 at $857.2 billion.

Domestic spending cuts are spread widely in the Democratic plan, with many government agencies facing an across-theboard 2^4 percent cut. Selected programs would be increased, mostly those for children, education and medical care for the poor.

The $4-billion-a-year program of revenue sharing with local governments would be eliminated next year, a step the Senate also took.

Highway programs would be cut 5 percent in the House plan, and mass transit cut 10 percent. Amtrak, however, would have its budget slightly increased.

Deep cuts proposed by Reagan in housing programs and urban aid are avoided, although the Community Development Block Grant program would be reduced by 10 percent. Several government loan portfolios would be sold to raise money.

The House proposal would give military and civilian government employees a 3 percent cost-of-living raise.