President Reagan said yesterday he would be "willing to look at additional revenue sources" and some cuts in military spending in an effort to lower the deficit, but his remarks were greeted skeptically by Democratic congressional leaders who said the administration had offered nothing new in an attempt to gain a compromise.
Hours after Reagan spoke, budget negotiators for Congress and the White House said they had abandoned discussions on any reduction in the 7.4 percent cost-of-living increase for Social Security recipients that is scheduled for July 1.
This decision leaves a projected deficit for 1983 of between $100 billion and $110 billion, according to the Office of Management and Budget worksheet being used by the negotiators, and a budget deficit of between $50 billion and $65 billion by 1985.
Reagan's unspecific but carefully couched offer to consider additional taxes came during an otherwise fiery defense of his economic program before the U.S. Chamber of Commerce.
Using language that others in the administration have used before, the president said he would be willing to accept revenue increases "so long as they are not inconsistent with the tax incentive measures for individuals and businesses that were adopted last year."
The remark failed to impress congressional negotiators, who seem to share with their White House counterparts an increasing pessimism that any settlement can be achieved. The negotiators, who already have met 12 times, are scheduled to confer again today, and both sides appeared to be positioning themselves to blame the other if the talks collapse.
"The whole thing may be dead," commented one knowledgeable Republican congressional source.
"If the president is rigid in the view that no significant change is necessary in his economic program, then there is no hope for compromise," said House Budget Committee Chairman James R. Jones (D-Okla.).
Earlier, refering to Reagan's pledge of last week to "go the extra mile," which he repeated yesterday, House Majority Leader James C. Wright Jr. (D-Tex.) said the president "hasn't gone the first mile yet."
Congressional skepticism about the administration's intentions was fueled yesterday by Secretary of Treasury Donald T. Regan, who in a speech to the American Newspaper Publishers Association in San Francisco, blamed Congress for the budget impasse.
"The failure of most in Congress to respond to the president's call for further spending cuts is feeding uncertainty in the financial community, and this is keeping interest rates up," Regan said. "It's prolonging the recession . . . "
A Republican congressional source called this "a dumb thing for Regan to say," observing that Regan was part of the White House negotiating team and that he was "accusing the negotiators of bad faith."
The president's comment in his speech yesterday that he was trying to reduce the size and intrusiveness of government into the private sector--"if it ain't broke, don't fix it"-- aroused the ire of Budget Chairman Jones, also a member of the negotiating team.
"The administration's rigid attitude makes policies to restore economic health impossible at this time," Jones said. "The next step is up to the president. If he believes, as he said today, that 'it ain't broke,' then it's not going to get fixed."
House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.), also speaking to the newspaper publishers, made a similar point, saying that only the president was able to break the impasse.
The president's speech yesterday was the first carried over a new business satellite television network on its first day of operation, and it was a classic example of Reagan's frequent celebration of free enterprise.
"Our task is to restrain spending, create incentives, provide hope, opportunities and help our economy grow again," Reagan said to loud applause. "Our administration promised a program of tax incentives so industry could retool and families could save again for their future. We've kept that promise with the first decent tax reduction in nearly 20 years."
Reagan again said, as he has frequently in recent weeks, that his tax cut does not unfairly benefit the wealthy, whom he said find more tax shelters, creating "a capital drain" when rates are raised.
"Reducing high tax rates provides incentives to get more people paying taxes again," the president said. "Just as important, we preserve one of the few systems left on earth where people at the bottom of the ladder can still get rich."
Reagan called upon his appreciative audience to "mobilize" the 240,000 chamber members nationally and urge Congress to cut spending, rather than increase taxes. Leaders of the chamber strenuously opposed excise taxes on gasoline, liquor and other products when Reagan considered them early in the year, and were considered by many to be a decisive factor in their ultimate rejection.