Office of Management and Budget Director David A. Stockman said yesterday that a freeze on cost-of-living increases in the government's basic benefit or so-called entitlement programs "may be warranted . . . as a temporary expedient" to help reduce budget deficits.
He did not say whether Social Security might be included in such a freeze, as some congressional Republicans have suggested, but did not rule out such action as Congress awaits recommendations later this year from a bipartisan commission studying Social Security.
In his testimony before a House Budget Committee task force on entitlements, Stockman defended the administration's proposals for $12.8 billion in cuts from benefit programs other than Social Security, which the administration has attempted to shield from cuts pending the commission's report.
The administration's proposed cuts come primarily from tightening eligibility standards and increasing that part of services for which beneficiaries must pay.
But Stockman took note of proposals from Congress, including one from Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) that would freeze or otherwise limit spending on entitlement programs, including Social Security as well as Medicare, Medicaid, federal workers' pensions and other benefit programs.
"Some kind of interim measures . . . may be warranted . . . as a temporary expedient," he said, although he warned that any freeze "cannot work . . . as a permanent mechanism."
Among other things, he said, a prolonged across-the-board freeze would not "recognize the enormous differences in need" on the part of recipients of the various entitlement programs.
"It is one thing to ask a civil service retiree with a monthly pension of $2,000 to forgo a scheduled 8.1 percent increase," said Stockman. "It is quite another thing to ask a Supplemental Security Income (SSI) beneficiary, whose sole source of income may be a $275 per month welfare check, to live another year--or more--on that amount in the face of steadily rising living costs."
Stockman was not signaling a change in administration position on freezing cost-of-living increases, but simply addressing the possibility of congressional initiatives in that area, according to an aide.
According to Stockman's testimony, cost-of-living increases for entitlement programs would cost $24.9 billion in fiscal 1983, including $16.3 billion for Social Security alone. The cumulative cost of these increases through fiscal 1985 would exceed $120 billion.
Stockman reacted in low-key fashion to a report Thursday from the Congressional Budget Office that the administration, in its proposed fiscal 1983 budget, has vastly underestimated future deficits even if Congress approves all the savings that President Reagan wants.
"I'm not going to react violently until I find out that they're wrong," he told reporters. He conceded that the administration's estimates of farm price supports is low, as CBO contended, but questioned some of its other conclusions.
As for rumors that he may resign, he said, "I'm not discouraged. I have no intention of resigning."
Meanwhile, House Minority Leader Robert H. Michel (R-Ill.) sent out a "Dear Colleague" letter designed to challenge any impression that he was walking away from the Reagan budget.
Responding to reports in The Washington Post and other newspapers from an on-the-record breakfast with reporters Thursday, Michel said "there is no definitive Republican strategy in the House" to rewrite Reagan's budget and said he was committed to "the same basic goals" as the president.
Michel indicated one overnight change in his position. Where he told reporters on Thursday that he would support proposals to advance the effective date of the mid-1982 income tax cut and defer the cut scheduled for mid-1983 for some months, he said yesterday, "I remain opposed to any deferral or elimination of either the 1982 or the 1983 tax reduction."