House Democratic leaders moved yesterday to shift the blame for Social Security benefit cuts to the Republicans, saying they will fight all the major reductions proposed by President Reagan on the grounds that they aren't needed to keep the system solvent.
"We don't intend to have him wreck the system," said Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) after a closed-door leadership meeting at which the decision was made.
The Democrats' announcement threw the Social Security burden into the Republican Senate, where Chairman Robert J. Dole (R-Kan.) is already at work on a set of alternatives on which his Finance Committee may start work next week.
These reportedly would cut Social Security by $34 billion from 1982 through 1986, about half what Reagan proposed May 12.
Dole has so far left off his list the most controversial of Reagan's proposals, to cut benefits sharply for people who retire in the future at 62 instead of 65. Also excluded were some provisions making it much harder to qualify for Social Security disability benefits.
Dole will, however, ask the committee to consider other Reagan proposals. These include cutting basic benefits for future retirees 10 percent below where they would be under current law; reducing cost-of-living increases in benefits in some future years; postponing the cost-of-living increases in benefits each year from July 1 to Oct. 1; increasing the waiting time for initial receipt of disability benefits from five months to six; taxing sick pay; cutting Social Security benefits for persons also receiving payments under public employe pension plans, and limiting family benefits to 150 percent of the worker's basic benefit.
One alternative for reducing future cost-of-living increases for beneficiaries would be to base them on the percentage increase in wages in any year when that is less than the increase in prices, on which they are based now. So far the White House has opposed this provision.
Another item on Dole's list is reportedly to restore the minimum Social Security benefit, which Congress eliminated at Reagan's request, for at least some of the 3 million people already on the minimum benefit rolls.
Dole also will ask the committee to let the retirement and disability trust funds, which are the worst off, borrow from the better-off Medicare fund so they can stay solvent.
The decision by House leaders to oppose all the major Reagan cuts, which may be duplicated by the Senate Democrats at a caucus next week, is, in effect, a decision to make Social Security the turnaround issue on which to break Reagan's sway over Congress.
O'Neill said the leaders had concluded that "the system is not in disastrous condition" and could get over its short-run financial problems by having the cash-short old age fund borrow from the more affluent disability and health insurance funds.
This judgment is based on new studies by the Congressional Budget Office and Social Security Administration which project that Social Security can probably get by with interfund borrowing, and possibly a small increase in revenue, assuming the economy doesn't tailspin, until major new revenues start coming in through four payroll tax increases already scheduled from 1982 to 1990.
O'Neill said the House Social Security subcommittee "does not intend to go forward at the present time" with legislative action.
"We are absolutely opposed to the deep cuts . . . . We're going to fight," said Majority Leader James C. Wright Jr. (D-Tex.). Subcommittee Chairman J. J. (Jake) Pickle (D-Tex.), who opposes many of the Reagan proposals, said he would abide by the leadership decision, although he seemed dubious that interfund borrowing would be enough.
In response, Dole said that "current half-step measures proposed by the Democratic leadership, mainly interfund borrowing solutions, only cloud the need for substantive reform . . . . Unfortunately, we are witnessing the politicization of this crucial issue, and I think that Americans will note that it will be responsible Republicans and Democrats who will be working together in the next few weeks to fashion a workable reform program to save this system."
In a related development, Sen. Harrison H. Schmitt (R-N.M.) won approval in a Senate Appropriations subcommittee of a legislative rider that would keep the 3 million people now on the minimum benefit rolls eligible for benefits until June 30. Under the minimum benefit provision that was signed into law as part of the Budget and Reconciliation Act, these beneficiaries are to be cut off Feb. 23, 1982.