The Reagan administration will consider proposals to change the cost-of-living indexing system for Social Security when it starts negotiations with Congress, perhaps as early as Thursday, on its controversial plan to cut back the program, Health and Human Services Secretary Richard S. Schweiker said yesterday.
But Schweiker said he thought such a step, which could reduce future increases in benefits for people already on the Social Security rolls, would stir up more opposition than the administration's heavily criticized proposals.
"If you thought the hue and cry was great on my plan, when you tell 36 million Americans that you're going to cut their benefits I dare say the decibel level will go up a little higher," he said on "Meet the Press" (NBC, WRC).
In time, he predicted, the administration's plan would be recognized as the least painful way of restoring financial health to the beleagured Social Security system.
The HHS secretary laid down some of the administration's general lines for the negotiations, saying it does not want to shift financing of Medicare from the Social Security trust funds to general revenues. He also said it does not want to alleviate the problem by taxing part of Social Security benefits, though he added, without elaboration, that the administration would "consider some aspects" of taxing benefits while regecting the "general concept."
President Reagan previously has rejected any suggestions of taxing Social Security benefits.
Schweiker said the administration is willing to negotiate changes in the indexing system, which some argue has overcompensated the elderly for inflation, as well as on permitting the deficit Old Age and Survivors Insurance funds to borrow from the other two surplus Social Security funds and other suggestions Congress might make.
He suggested that the negotiations will start with Rep. JJ. Pickle (D-Tex.), chairman of the House Ways and Means subcommittee on Social Security, which has begun work on Social Security revisions. It was partly to head off the Pickle subcommittee that the administration rushed out its proposals, sources said last week.
Congressional protests over proposals for sharp cutbacks in benefits for future retirees, especially those who retire early, forced the administration to back off from its plan last week and offer to compromise on a bipartisan bill to shore up the Social Security trust fund.
Despite a 96-to-0 vote in the Senate last week against certain elements of the administration's plan, Schweiker refused to characterize the proposals as a political blunder. But he said he would be "glad to compromise," particulary on the phasing-in of changes.
Schweiker said his department considered suggesting a phase-in of its most controversial proposal -- the plan to reduce benefits for future early retirees -- but in the end the administration decided it "needed the money now."
He confirmed that President Reagan attended only one hour-long meeting on the proposals before they were released.
Sources have suggested that Office of Management and Budget Director David A. Stockman was a key proponent of big early cuts in Social Security benefits. He argued this would ease budget problems and reassure conservatives in Congress and financial markets of the administration's strong intention to control spending and borrowing sources have said.
Schweiker suggested that phasing in the proposed reductions for those retiring at 62 instead of 65 would get rid of the obvious objections to them. But in reply to a question, hes said he thought changes should be phased in before 1990 because the Social Security trust fund needs money now.
Meanwhile, House Majority Leader James C. Wright Jr. (R-Tex.) said on "Face the Nation" (CBS, WDVM) that he thought there were "possible ingredients" of a compromise on a tax bill between the administration and Democrats in the House.
He said Democrats might be willing to vote a multiyear cut, provided it was scaled down from Reagan's plan, and angled to help middle- and lower-income groups more.
House and Senate tax writers, with the administration's blessing, have begun efforts to work out a bipartisan tax bill, which would include some of the president's rate cuts and other -- measures such as a reduction in the so-called marriage penalty and increased savings incentives.
Wright said it was crucial that the president "embrace" any compromise and "admit paternity" of the tax bill if the Democrats were to move toward him.