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Reagan Threatens to Veto Bills Above Senate Spending Cap

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Washington--Dissatisfied with the spending cuts in the Congress's mid-summer budget resolution, President Reagan last week threatened to veto fiscal 1986 appropriations bills that exceed funding levels approved by the Senate last spring.

The Senate budget plan would freeze most school-related spending, while the one passed by the full Congress Aug. 1 would allow funding for education programs aimed at the disadvantaged, such as compensatory education, to keep pace with the inflation rate.

According to reports from the Western White House in Santa Barbara, Calif., the President's chief spokesman, Larry Speakes, said that Mr. Reagan would seek to hold spending levels "very close" to the Senate budget resolution for the fiscal year that begins Oct. 1.

A House Appropriations Committee staff member called the President's statement an episode of "saber-rattling." But he added that the committee had intended to draft a bill that freezes spending near the Senate-passed levels anyway.

After weeks of stalemate, the Congress passed a $967.6-billion budget for the fiscal year that aims to reduce total federal spending by about $55 billion from current levels. The $31.55-billion section of the budget that includes education funds--known as function 500--is targeted for about $500 million in savings.

The relevant House and Senate committees would save $100 million in administrative costs from the Guaranteed Student Loan program and $800 million in the program overall during the next three years.

The budget also assumes $400- million in savings from education and training programs next year but does not specify or direct how to do it, according to an aide to Representative Pat Williams, Democrat of Montana.

Meanwhile, the House--despite the budget deadlock throughout July--began to pass 1986 appropriations bills without the spending blueprint.

For the school-lunch program, the Agriculture Department's 1986 appropriations bill, HR 3037, provides $4.1 billion, which would permit services to continue at their current levels. A House-passed bill reauthorizing child-nutrition programs had called for an additional $1003million for the program.

The bill for the Department of Housing and Urban Development and related agencies provides money for the National Science Foundation--which supports some science-education programs--and the Environmental Protection Agency--which underwrites asbestos abatement in schools. Under the bill, HR 3038, the nsf would get $1.52 billion--about $200 million above fiscal 1985--and the epa would get $50 million for school asbestos abatement, the same as this year.

Neither the House nor Senate appropriations subcommittees have completed drafting a spending bill for the Education Department.

Before recessing, the Congress also allocated additional funds for the current fiscal year in a supplemental appropriations bill.

Among the extra funds earmarked for education: $102 million for vocational education, to meet the authorization ceiling for the Carl D. Perkins Vocational Education Act of 1984; $287 million for Pell Grants to low-income college students; and $720 million for the Guaranteed Student Loans program.

In the supplemental bill, the Congress also agreed to extend for one year a program that allows schools to receive government-surplus food after it has been converted into products suitable for use in school-lunch programs.

The Agriculture Department had said in May that it would discontinue the program at the beginning of the 1985 school year.

President Reagan has promised an "all-out offensive" this fall on behalf of his tax-reform plan. The issue concerns educators because the Reagan plan would eliminate taxpayer deductions for state and local taxes, both major sources of school funding.

Officials of numerous education organizations, including the American Federation of Teachers, the National Education Association, and the National School Boards Association, have testified before the House Ways and Means and Senate Finance Committees against eliminating the deductions.

On another tax-related issue, the House Ways and Means Committee voted to extend the 16-cent federal tax on cigarettes. The tax is scheduled to be scaled back to 8 cents next year, and several states plan to pick up the 8 cents to help finance education reforms. Neither the full House or Senate Finance Committee has acted on the measure.

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