Under pressure from Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.), the Democratic-dominated House Ways and Means Committee yesterday killed a proposal for major long-range cuts in Social Security benefits. These included raising the basic Social Security retirement age from 65 to 67, reducing future retirees' benefits about 6 percent from levels called for in current law, and cutting future cost-of-living increases.
The cuts proposal, put forward by Social Security subcommittee Chairman J. J. Pickle (D-Tex.) and senior Republican Barber B. Conable Jr. (R-N.Y.) as a way to assure the system's solvency, was shot down on a largely party-line vote of 18 to 14.
The committee then voted to go to conference with the Senate on a lesser bill to restore the minimum Social Security benefit killed earlier this year and to reallocate funds internally to tide the system over in the short run.
President Reagan earlier this year also proposed large long-range cuts in Social Security benefits. Congressional Democrats resisted, congressional Republicans flinched and, in the face of opposition in the public opinion polls as well, the president withdrew the proposal.
In yesterday's action on the proposed cuts, all 18 votes against came from Democrats and all but four in favor from Republicans. Ways and Means Chairman Dan Rostenkowski (D-Ill.) was one of the 18.
Conable said after the vote, "It's a disgrace the way we've turned tail and run on Social Security."
Yesterday's vote on the Pickle proposal means that action on Social Security's long-range financing problems will likely be delayed at least until after the 1982 elections while a presidential commission seeks a bipartisan solution.
O'Neill and other Democratic leaders have been in dispute with the president for most of the year on whether major long-range cuts are needed now to shore up the system. O'Neill takes the position that it can get along for another two to three years, even under bad economic conditions, if the large old age insurance fund which faces temporary insolvency next year is authorized to borrow from the better-off disability and Medicare funds.
At a stormy session yesterday, O'Neill and other Democratic leaders reportedly warned Pickle that they still oppose long-range cuts and that if his amendment succeeded in committee it would never be allowed to reach the floor.
The Pickle plan had three provisions, the first of which would have phased in a new retirement schedule from 1990 to 2000 under which at age 65, a retiree would get only 88 percent of the full benefit. He would get the full benefit at age 67. Individuals could still retire at 62 but with a permanently reduced benefit equal to 69 percent of the full benefit, instead of the current 80 percent.
The second change would have revised the formula for benefits over the three years 1983-85 so that future retirees would get about 5 or 6 percent less than under the present formula. The third change would have pegged the annual cost-of-living increase for all beneficiaries at the lower of wage or price increases in the preceding year; they are now based only on prices.