Hopes for a speedy budget compromise between White House officials and congressional leaders faded yesterday as negotiators became bogged down over critical elements of the plan and President Reagan remained adamant against modifying next year's scheduled tax cut.
"Everyone got their hopes up, and it hasn't fallen in place that quickly," said a Senate Republican leadership source after a morning session that a House Democratic source characterized as "a step back." An aide to House Minority Leader Robert H. Michel (R-Ill.) quoted Michel as describing the session as "a lot of blowing of smoke on both sides."
Senate Majority Leader Howard H. Baker Jr. (R-Tenn.), while claiming "some progress" in the talks, indicated that no agreement is likely until after the House reconvenes next Tuesday and Democratic leaders can consult with members, who are still on spring recess. No further negotiating sessions are scheduled until Monday.
But the problems appeared to go beyond requests for delay, and some sources close to the negotiations again raised the possibility of stalemate. "You may never have a meeting with Reagan because there may be nothing to submit to him," a Senate Republican aide said.
In a not unexpected blow to one potential source of compromise, Republican congressional sources said Reagan indicated to his staff as recently as last weekend that he was "dug in" on the 10 percent individual income tax cut planned for July, 1983. White House officials confirmed that Reagan remains adamant for retaining the cut.
Democrats are insisting that the cut be part of the current negotiations, and Republican pressure is mounting for some modification. A majority of Republicans on the Senate Finance Committee have indicated that they favor some change in the cut, sources said yesterday.
House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) complained yesterday that, while a rollback of the 1983 tax cut would pass the House overwhelmingly, alternative revenue-raising measures probably would be killed.
One proposal under discussion is a surtax on upper-income taxpayers, and Baker yesterday indicated at least qualified support for such a plan, coupled with a minimum tax on corporations and wealthy individuals. The negotiators have discussed a 4 percent surtax on taxpayers with incomes of more than $40,000. Baker mentioned no specific figure.
However, Baker said he opposes another revenue-raising measure under discussion: a $5-a-barrel oil import fee. He said he would prefer as "more equitable" a tax on general energy usage.
Republicans also said House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) has privately renewed his opposition to scaling back cost-of-living increases for Social Security. Many of the negotiators see those as crucial to controlling expansion of benefit entitlement programs.
There is substantial skepticism in Congress that a compromise can be achieved unless Reagan yields on taxes and O'Neill bends on Social Security.
In addition to complaining about Reagan's refusal to compromise on taxes, Democrats complained yesterday that the White House is disingenuous in portraying presidential aides as passive participants in the discussions.
In fact, Democratic aides said, Office of Management and Budget Director David A. Stockman has been presenting plans in 11 different budget catagories aimed a reducing annual deficits well below $100 billion for the next three years. OMB officials declined to comment.
Democrats also complained that Stockman is acknowledging deficits of $180 billion for 1983, $219 billion to $241 billion for 1984 and $239 billion to $241 billion for 1985 if no spending cuts or tax increases are enacted. Those figures are substantially higher than the administration officially acknowledges.
In addition, Rep. Barber B. Conable Jr. (R-N.Y.), ranking minority member of the Ways and Means Committee, reportedly complained about the administration's plan to push ahead with a tuition tax proposal costing $500 million the first year, growing to $1.5 billion, just as the administration and Congress are trying to cut deficits.
There were also signs that, even as the negotiations are under way, the negotiators' goal of a balanced budget by 1985 appears to be slipping.
Baker told the American Bankers Association Monday night that a balanced budget probably cannot be achieved until 1986 or 1987. Another source said that none of the leading options under review by the negotiators anticipates a balanced budget by 1985.
For 1983, one source close to the talks said, a deficit of "slightly less than $100 billion" is about the best that can be achieved, although some of the congressional negotiators are still pushing for a lower deficit.
The talks have been intermittent for three weeks, and have been held at such places as Blair House, where yesterday's morning session, followed by a brief afternoon meeting, took place. Republicans and Democrats from both chambers have been involved, with White House chief of staff James A. Baker III as principal player for the administration.
While reaffirming that Reagan has not agreed to anything in the talks, White House officials said he is kept apprised of what is happening, and described him as having a "guiding hand" in the proceedings. They reiterated that Reagan will not commit himself to anything until a "complete package" is assembled.
White House aides, agreeing with congressional sources, said they did not expect any proposals from Congress at least until next week.