Democratic budget: 'yes' to lower spending, 'no' to tax cut for the rich

Senate Democrats, having failed in their own attempt, now look at their colleagues in the House to skew the 1982 budget more to Democratic liking. It will be a tough job, for the Senate has just given President Reagan all he wants and a bit more in the way of budget trims for fiscal 1982.

Point man on the House side is Rep. James R. Jones (D) of oklahoma, chairman of the House Budget Committee, where the Democratic "alternative" budget first will be hammered out.

His committee -- with 18 Democrats and 12 Republicans -- plunges into its work using Mr. Jone's "mark," or proposed budget, as a starting point.

"I happen to believe," Jones says, "that a dramatic change in fiscal policy is long over-due and I share [White House] goals."

Congressman Jones, in other words, favors deep cut in federal spending. He wants the government, over a period of time, to take a smaller slice from the US economic pie.

But he and other Democrats want those cuts to be less burdensome on Americans toward the bottom of the economic heap than is the case with the budget Mr. Reagan sent to Capitol hill.

Thus, the Jones "mark" restores $7 billion for various social service, health , education, transportation, and scientific research and development programs.

Striking differences mark the Jones and Reagan approaches to the nation's next budget. These spring partly from differing assumptions as to how the economy will perform this year.

House Budget Committee experts believe that inflation, unemployment, and interest rates all will be higher than the White House projects for 1982. This committee estimate is buttressed by a Congressional Budget Office study, as well as by some leading private forecasters.

To the extent the higher estimates are right and the White House is wrong, one would expect the 1982 budget deficit to be larger than the $45 billion projected by the White House. Indeed, using less-optimistic economic assumptions, Jones estimates that Mr. Reagan's budget in fact would end up $50. 45 billion in the red.

Mr. Jones projects a 1982 deficit of only $24.6 billion. How can this be?

For one thing, the Jones effort calls for tax cuts of $35 billion, compared with the $54 billion anticipated under the White House plan. The government, under the Jones "alternative" budget, would collect roughly $20 billion more in taxes with which to offset spending.

Gone, under the Democratic proposal, is Mr. Reagan's cherished hope of cutting personal income taxes by 10 percent a year over three years -- the so-called Kemp-Roth approach.

The size and composition of any 1982 tax cuts will be set by the House Ways and Means Committee, also Democratic-controlled, not by the Budget Committee. But Congressman Jones and Rep. Dan Rostenkowski (D) of Illinois, Chairman of Ways and Means, are working together in the effort to forge a Democratic consensus on taxes and budget trims.

Jones's tax suggestions, in addition to being much smaller than the Reagan tax cuts, would benefit chiefly Americans in lower income brackets.

"No one with taxable income above $50,000," said a key aide to the Budget Committee chairman, "would get a tax cut." Under the Reagan plan, all taxpayers would receive a 10 percent reduction.

The Jones budget would trim $4 billion from the Reagan defense budget by eliminating what is called an "unnecessary pay raise." Under the President's plan defense spending in fiscal 1982 would turn out to be $194.1 billion, not the $188.8 billion forecast by the White house, according to Democratic analysts.

The budget crafted by Jones and his staff trims nothing from "weapons and readiness," said a key aide.

Other potential savings suggested under the Jones approach:

* $4 billion by reducing waste and inefficiency "across the board," in the words of an aide.

* $3 billion less in interest payments on the national debt than projected by the Reagan budget, because the Democratic alternative calls for a much smaller deficit.

Essentially, the Jones approach is conciliatory toward the White House. It goes along with 75 percent of the cuts Reagan wants and adds some proposed by Jones.

But the Jones budget devotes more money to disadvantaged Americans, gives less of a tax break to the well-to-do, and cuts the anticipated deficit almost in half.

Now the Budget Committee takes up the Jones "mark" and sends its verdict to the full House. The House budget, when passed, will be reconciled with the already-passed Senate version in conference. The final result goes back to both chambers for enactment into law.