House and Senate negotiators Wednesday crept toward agreement on a plan to balance the budget by fiscal 1991 with both sides expressing some optimism about a compromise on the far-reaching proposal.
Meanwhile, a bipartisan group of senators, including Majority Leader Bob Dole (R., Kan.), announced support for legislation to head off protectionist measures by toughening existing laws in order to reduce the U.S. trade deficit.
The trade bill, which is sponsored by a quarter of the Senate, also is meant to send a strong signal to President Reagan that Congress continues to be unhappy with administration trade policy, according to a Senate leadership source.
The negotiations on the budget-balancing proposal went on behind closed-doors among a small group of House and Senate leaders who did not want to be too specific about possible agreements for fear of upsetting the delicate talks.
But Sen. Pete Domenici (R., N.M.), chairman of the Budget Committee and one of the Senate`s chief negotiators, said the House offered ”tentative proposals on almost every major issue.”
”Clearly, they show a very significant movement in the direction I think could yield a bill,” Domenici told reporters.
An aide to Majority Whip Thomas Foley (D, Wash.), one of the House`s main negotiators, also reported an air of optimism about ”the conceptual outlines” of a compromise.
However, the issues still to be completely resolved are some of the same ones that have been causing the impasse over the budget plan for weeks.
Domenici said there are ”still some problems” with how much will have to be cut from the fiscal 1986 deficit and with the list of social programs the House insists should be exempt from reductions.
A House Republican leadership source said there also could be continued problems with the idea of having defense and domestic programs share ”50-50” in reductions.
The proposal would mandate annual deficit targets and if the President and Congress did not meet them, an automatic procedure for meeting the goals would be triggered.
Defense Secretary Caspar Weinberger has contended that across-the-board cuts in military spending could gut the President`s build-up, making observers in both parties suspect that Reagan might eventually oppose the budget-balancing plan.
Also, House Republicans were said to be concerned about the effect of the Geneva summit on the President`s defense policy.
But the GOP leadership aide said Wednesday that there was optimism the issue could be resolved.
Negotiators were expected to meet again Thursday, but final agreement probably won`t come until after the Thanksgiving recess, Domenici said.
The budget-balancing plan is tied to legislation raising the national debt limit to more than $2 trillion that must be approved by mid-December to keep the government from running out of cash.
The trade legislation proposed by Dole and other senators would require the administration to enforce existing trade laws.
Unlike other measures, such as the recently approved bill limiting textile and shoe imports, the legislation does not deal with specific industries and is aimed more toward opening foreign markets to U.S. goods than at restricting imports.
”It may provide a little bit of cover for those senators who want to do something but do not want the textile bill,” said Sen. Max Baucus (D., Mont.), one of the co-sponsors.
