WASHINGTON — House and Senate negotiators, already falling behind deadlines set by the Gramm-Rudman deficit-reduction law, struggled in marathon bargaining Wednesday to compromise on a fiscal 1987 budget before Congress recesses for the July Fourth holiday.
They reported slow progress as they met into the night, divided over domestic spending as well as defense and taxes.
Still reportedly under discussion in the closed-door talks was a Senate proposal for a reserve fund to finance additional spending for defense and domestic initiatives if taxes are raised to finance them.
Both the Senate and the House have voted to slash President Reagan's $320-billion defense spending request for next year, with the Senate proposing $301 billion and the House $285 billion. Under the reserve proposal, as originally advanced by the Senate, defense spending would be $293 billion without new taxes, and $299 billion with them.
House bargainers balked at the reserve proposal.