President Reagan, battling to demonstrate control over the federal budget, issued his first veto threat yesterday but reiterated that he will not propose more cuts in Social Security in 1982.
The Reagan administration and leading Republicans in Congress are in apparent disagreement over how to realize the new round of federal spending reductions necessary to keep the 1982 budget deficit close to Reagan's target of $42.5 billion.
At a White House meeting yesterday Reagan heard Republican leaders make a strong pitch for cuts in expensive "entitlement" or basic benefits programs that went relatively untouched in the first series of Reagan budget cuts. "He didn't close the door, but he didn't seem brimming with enthusiasm either," Sen. Paul Laxalt (R-Nev.) said after the meeting.
Reagan and his advisers were even more adamant on defense spending, making it clear that if they have to attack either of the large budget areas now in dispute, defense or entitlement programs, it is the latter that will feel the ax. White House communications director David Gergen said the president is not interested in negotiating further defense cuts for fiscal 1982 beyond the $2 billion he proposed Saturday.
White House advisers also sought to cut off controversial talk of cuts this year in Social Security cost-of-living benefits, which some Senate Republicans favor as a way of limiting the deficit. Gergen arrived at the daily White House news briefing with a statement to read: "The president announced that he has no plans to propose additional cuts in Social Security programs beyond those he has already submitted to Congress."
Reagan felt the political heat that proposals to change Social Security generate last spring when he recommended a three-month delay in a cost-of-living increase and sharply lower payments to those who elect early retirement. The president stands behind those proposals, Gergen said, but he conceded that they are dead in the water.
Laxalt, Reagan's closest friend in the Senate, said after yesterday's meeting that for 1982 "there was no serious discussion concerning any cuts in Social Security at all. That should be put to rest."
Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) made a strong appeal to Reagan to cut into entitlements, Laxalt and other participants said.
Afterward, Domenici said, "We are looking at everything. No absolute bottom lines have been drawn on anything."
Reagan's problem was summed up by Laxalt, who said it is "abundantly clear to those of us who are working these budget numbers" that entitlements have to be cut because there is not much room left to cut other nondefense items, and Reagan has put defense off-limits to the budget cutters.
House Speaker Thomas P. O'Neill Jr. (D-Mass.) announced that Reagan had threatened to veto the $60.7 billion Housing and Urban Development appropriations bill as beyond his budget.
The House passed the bill yesterday anyway, but the vote, 209 to 197, indicated that Reagan would have no trouble sustaining a veto. All Maryland representatives except Marjorie S. Holt (R) voted for the bill. All Virginia representatives voted against it.
Senate Republican sources said the Senate leadership may try to head off any confrontation over the bill, which includes funds for the Veterans Administration, the space agency, the Treasury Department and the Environmental Protection Agency as well as HUD, by not bringing it up for a Senate vote. The affected agencies would then presumably operate under an interim funding resolution.
Although Gergen insisted that the president still aims at keeping the 1982 budget deficit to $42.5 billion, Laxalt added his voice to that of Commerce Secretary Malcolm Baldrige who said yesterday anything under $50 billion would have the desired result of showing investors that Reagan can and will control federal spending.
Domenici joined the chorus, saying: "There is no magic in $42.5 billion."
At a reception for supporters of his economic program on the White House south lawn, Reagan said, "We'll continue to make budget adjustments as needed and we'll hold the line." The president has said that the budget deficit will not be over $42.5 billion. He attempted to allay any fears by telling his audience yesterday that the budget will not be balanced "at the expense of those dependent" on the pension programs.
O'Neill, however, registering Democratic opposition to any entitlement cuts, said: "It is interesting to note that with the ship in trouble, this Republican crowd takes the position that women and children should be the first in the water, not the first in the lifeboats."
Sen. Ernest F. Hollings (D-S.C.), the ranking Democrat on the Budget Committee, said the Republicans' effort to control spending reminded him of an old shipboard saying: "When in danger, when in doubt, run in circles, scream and shout."
Hollings and other Senate Democrats proposed a variety of measures that would help raise revenue for the government, but which run counter to Reagan's program. Hollings suggested reducing Reagan's tax cut to 15 percent over three years instead of the 25 percent the Congress approved.
Sen. Bill Bradley (D-N.J.) proposed an amendment to the debt ceiling bill that would withhold the tax cut due in the summer of 1983 if the deficit is larger then than Reagan has promised. Sen. Gary Hart (D-Colo.) recommended delaying the personal tax cuts in the Reagan package until the budget is balanced.
Meanwhile, the Senate Finance Committee reported out the debt ceiling bill, 9 to 7. In the bill the federal debt tops $1 trillion for the first time. It would be $1,079.8 billion. Republican conservatives Charles Grassley (Iowa) and Steven Symms (Idaho) joined five Democrats in voting against the bill.
The Senate Budget Committee heard Congressional Budget Office Director Alice Rivlin testify to the dilemma Reagan faces. Either revenues have to be increased or cuts made in defense spending or reductions made in entitlements, she said. Without one or more of those steps, to balance the budget "You'd have to close down the government and that's not going to happen," she testified.