Congressional Democratic leadersannounced a compromise has been reached on a 1988 budget,
paving the way for final approval of a trillion dollar spending
plan.
    House Speaker Jim Wright and Senate Majority Leader Robert
Byrd told a news conference that final congressional approval
of the plan to reduce an estimated 171 billion dlr deficit next
year to 134 billion dlr was expected next week.
    The plan was worked out by Democrats who control both House
and Senate but who have been stalemated for a month over
different House and Senate budgets that passed earlier.
    The budget proposes 19.5 billion dlrs in new taxes next
year, 65 billion dlrs over a three year span.
    It would cut President Reagan's request to spend 298
billion dlrs for defense in 1988 by about nine billion dlrs,
but only if he accepts the proposed tax increase to pay for it.
    If Reagan rejects the tax rise, which he has said he would,
defense spending under the plan would drop automatically by
about five billion dlrs, the leaders said.
    Reagan's own budget was rejected by wide margins in both
House and Senate by a combination of Democrats and his own
Republican party who said it was unrealistic.
 Reuter
