WASHINGTON -- The Senate Budget Committee yesterday rejected a proposal to lift the spending restraints imposed by the 1990 budget agreement, but even as it acted, other proposals popped up that would partially suspend the pact or abandon it altogether.

The committee voted 19 to 2 against a resolution that would have suspended the spending caps and pay-as-you-go procedures enacted less than a year ago in an effort to stimulate the flagging economy.

The vote was triggered by a provision of the budget law that requires Congress to decide whether to keep the law in place during a recession. Most committee members said, however, that while they are concerned about the economy's continuing slackness, they are appalled by the badly deteriorating deficit situation.

The Congressional Budget Office last month estimated that, even if the budget agreement holds, the deficit will reach an all-time high of $362 billion in fiscal 1992 and then will linger in the $200 billion to $300 billion range for several more years.

"Because of the record deficit, I don't favor suspension," said the committee's chairman, James Sasser, D-Tenn.

He and other committee members admitted that the agreement appears to have done little to keep the deficit from skyrocketing to unprecedented levels, but they said that its spending restraints are better than none at all.

"Gramm-Rudman hasn't worked very well" to bring the deficit down since it was enacted in 1985 and revised last year, said Sen. Trent Lott, R-Miss. "But there was no discipline before the law, and I shudder to think what the deficit might have been without it."

Meanwhile, legislation was developing on the House side of the Capitol building to partially suspend the agreement so that anti-recessionary measures would be easier to pass.

The House Rules Committee was debating a $5.2 billion extended unemployment benefits bill that would declare an economic emergency and exempt the benefits program from the budget agreement's spending limits if the President signs it.

The measure resembles a jobless benefits bill Congress passed before the recess, except that it would not give the President any choice about implementing the benefits program. Mr. Bush had signed the earlier bill but then refused to carry it out, saying there was no emergency and it would violate the agreement.

House and Senate Democratic leaders have made passage of the unemployment benefits bill a top priority. But Republicans argue that it would abuse the budget agreement's emergency suspension procedures, which they say were designed to provide assistance to mitigate unforeseen disasters such as earthquakes and floods.

Another proposal that surfaced yesterday, this one on the Senate floor, would eliminate the budget agreement altogether in light of the reduced defense spending needs and other new spending priorities created by the radical changes taking place in the Soviet Union.

The proposal, sponsored by Sen. Paul Simon, D-Ill., appears to be drawing increasing support from Democrats inside and outside Congress. It calls on President Bush and congressional leaders to divert some planned defense spending into domestic areas in 1992, and to entirely renegotiate the defense and domestic spending levels set by the budget agreement for 1993 and beyond.

The $295 billion defense level for defense next year does not reflect "changing world realities," particularly in the Soviet Union, which have "provided our country with an historic opportunity to re-examine our budget priorities," Sen. Simon said.

By late afternoon, the Senate had not yet voted on the proposal.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.