President Reagan is expected to propose a three-month deferral of cost-of-living increases for Social Security beneficiaries, delays in similar payments for veterans' and other entitlement programs and probably a speed-up in elimination of the departments of Education and Energy, White House and congressional sources said last night.
The proposed Social Security and other entitlement program cuts were outlined late yesterday by top White House aides to Senate Republican leaders as part of a tentative package of about $16 billion in new spending cuts aimed at keeping down the mounting deficit for the 1982 fiscal year, which starts Oct. 1.
Administration sources separately confirmed that elimination of Education and Energy is under serious consideration to achieve savings in fiscal 1982.
The proposal to defer Social Security cost-of-living increases could be especially controversial on Capitol Hill in light of a White House announcement Tuesday that Reagan had no plans to propose "additional cuts in Social Security programs beyond those he has already submitted to Congress."
He had submitted the deferral proposal, but aides implied that it was regarded as a dead issue, leading many members of Congress to think they were safe from this particular Social Security buzzsaw for a while.
Reagan is expected to lay his final 1982 budget-cutting proposals before the Cabinet Tuesday or Wednesday, and sources said the White House has explored the possibility of getting time on national television Wednesday to unveil the new program.
Congressional sources also reported that the White House will seek to achieve its entitlement changes, which cover some of the government's largest open-ended benefit programs, as part of mandatory legislation that Congress must pass by Oct. 1 to increase the nation's debt ceiling to more than $1 trillion.
Without the increase, the government could not borrow money to keep running. Other changes reportedly will be considered in connection with pending appropriations bills.
Other entitlement programs for which cost-of-living deferrals may be recommended could include veterans' benefits, food stamps and civilian and military pay raises.
While the administration apparently remains determined not to recommend any cuts in its defense spending buildup beyond the $13 billion announced last weekend, including $2 billion for next year, Senate sources said the administration is indicating that Reagan would not veto larger cuts if Congress approves them.
The latest round of cuts, coming on top of $35 billion in program slashes that Congress approved during the summer, are prompted by escalating deficit projections, caused largely by stubbornly high interest rates. The administration is attempting to keep the 1982 deficit close to its target of $42.5 billion.
The briefings on Capitol Hill were conducted by Office of Management and Budget Director David A. Stockman, White House Chief of Staff James A. Baker III and congressional liaison chief Max L. Friedersdorf.
Attending the Senate session were Majority Leader Howard H. Baker Jr. (R-Tenn.) and Budget Committee Chairman Pete V. Domenici (R-N.M.), Robert J. Dole (R-Kan.) of Finance and Mark O. Hatfield (R-Ore.) of Appropriations. Stockman and Treasury Secretary Donald T. Regan also met with House Republicans earlier in the day.
Meanwhile, the House gave the administration some time, but little else, as it rushed through a routine 30-day stopgap funding bill for the government without any of the additional spending cuts that the president wants for next year.
Although the so-called "continuing resolution" had once been viewed as a vehicle for the new round of cuts, House Republicans, still awaiting final word from the White House on details of the cuts and the strategy for handling them, let it pass without a fight. It was approved, 281 to 107, and now goes to the Senate.
For the time being, Republican leaders indicated that they will attempt to ratchet down the size of individual appropriations bills as they come along, although they pointedly did not rule out a more comprehensive attack on the money measures if the bill-by-bill approach fails.
"The defense levels are incredibly low, and the domestic levels are incredibly high," said a Republican leadership aide, speaking of the spending levels contained in the House-passed continuing resolution. "But in overall dollars it won't set us back much, just for 30 days."
The resolution is needed by Oct. 1, the start of the new fiscal year, to fund agencies for which money has not been appropriated specifically. So far Congress has yet to send any of its 13 appropriations bills to the president.
Spending levels in the continuing resolution are pegged to current levels or to new levels approved by the House or Senate, whichever are lower, or possibly, in some cases, to budget estimates for next year. In the case of defense, spending could be at this year's level, which is considerably lower than Reagan wants for next year.
House Minority Leader Robert H. Michel (R-Ill.) described the continuing resolution as a "holding action." He said the Republicans' hand in negotiating down the size of individual money bills had been strengthened by Reagan's vow earlier this week to veto a housing and veterans' appropriations bill and by a subsequent House vote indicating that the veto would be sustained.
"You look at that vote . . . and there's still a lot of sentiment for what we're doing," Michel said.
However, there were also signs that the new round of budget cuts may be more difficult than the first round, in which Congress cut programs by $35 billion for 1982, only to find that the administration wants more in order to keep the projected deficit to $42.5 billion for next year.
"The Congress and the president should complete action on the appropriations bills before we consider extracurricular action on spending cuts for 1982," said Rep. Silvio O. Conte (R-Mass.), ranking minority member on the House Appropriations Committee. Conte, opposing use of the continuing resolution as a vehicle for more spending cuts, had joined in sponsoring the resolution