Sen. Russel B. Long (D-La.) yesterday indicated for the first time that he might be willing to agree to use general revenues as well as the Social Security tax to finance Medicare, and thereby help the Social Security trust funds out of their current difficulties.
At present the Social Security tax pays all Medicare costs. Long indicated that he might favor using general revenues for half.
"I don't think it would be drastic if we shifted the costs of Medicare onto general revenues. We could do it if we had to," Long said at a hearing of the Senate Finance Committee, of which he is senior Democrat.
Long, in an interview later, said he isn't committing himself to using general revenues to help bail out Social Security, but "That's one option, and it sounds better to me than some of the others."
Ong noted that in the past he had always opposed using any general revenues for Social Security.
If he finally decides to put his weight behind the general revenue concept, it would immensely strengthen the forces that favor helping the system by that method, instead of by cutting benefits as has been proposed by President Reagan.
A broad coalition of labor unions and organizations of the elderly and disabled opposes Reagan's cuts as being far in excess of what is needed to get the system past its immediate financial problems, caused by the poor performance of the economy over the past few years.
They favor general revenue financing, as the AFL-CIO and others testified yesterday. So does House Social Security subcommittee Chairman J. J. Pickle (D-Tex.). He favors some pruning of benefits as well.
Howevrer, the president opposes any general revenue financing, even if confined to Medicare, and Senate Finance Chairman Robert J. Dole (R-Kan.) and Senate Social Security subcommittee Chairman William Armstrong (R-Colo.) repeated at yesterday's hearing that they oppose it too.
Long's remarks on general revenue financing came as Armstrong was asserting that Social Security does have "a horrible problem out there in the future" and that some of the cuts sought might prove to be not excessive at all.
Long asked AFL-CIO witness Bert Seidman whether giving the troubled old-age fund half the income from the Medicare portion of the Social Security tax and then replenishing Medicare from general revenues would solve the Social Security funding problem.
Estimated Medicare income from the tax in fiscal 1982 is $38 billion, so the sift would involve about $19 billion the first year. Seidman said he believed that would solve the problem. Long then made his comment on general revenue financing, adding, "As of now it is well within our capability to solve this problem."
Although the AFL-CIO, United Auto Workers and American Federation of State, County and Municipal Employes all charged yesterday that Reagan's proposed cuts are excessive, some other groups endorsed changes in benefits.
The Chamber of Commerce favored cuts in a variety of benefits, including the annual cost-of-living adjustment (COLA), plus mandatory coverage of public employes, which it said would help cover the enire short-range deficit.
The National Association of Manufacturers wanted COLA cuts plus an eventual increase in the retirement age to 68, as did the American Council of Life Insurance. The business groups opposed general revenue financing.