Sen. John G. Tower (R-Tex.) was incorrectly referred to yesterday as the Senate Republican Conference chairman. The conference chairman is Sen. James A. McClure (R-Idaho).
Senate Republican leaders flinched yesterday and agreed to revamp their proposed budget for next year by dropping plans for $40 billion in Social Security savings over the next three years and adding money for veterans' benefits, space programs, student loans, housing and Medicare.
The revisions, approved in a caucus by Republican senators and due for formal introduction today, would raise the Senate's projected 1983 deficit of $106 billion by $6 billion for Social Security and by about $3 billion for the other programs, according to Senate sources.
It would add $51 billion to projected deficits over three years.
But Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) said that budget will require Congress to take unspecified action by the end of the year to assure the solvency of the financially strained Social Security system. The budget will then be amended to account for the effect of these changes on the deficit, he said.
Domenici unveiled the proposed changes, demanded by many moderate GOP senators facing reelection this fall, only a day after he vigorously defended his committee's proposal to find $40 billion in deficit reductions from Social Security, calling it "truth-in-budgeting" to acknowledge the need for more money for the system.
Rejecting suggestions that the Republicans are now playing with numbers and spending "sweeteners" to win support for their budget, Senate Republican Conference Chairman John G. Tower (R-Tex.) said, "It'll be the most truthful budget you ever saw."
But Sen. Edward M. Kennedy (D-Mass.) immediately accused the Republicans of trying to impose a "gag rule" on the Senate by holding off introduction of Democratic amendments until the Republicans agree on changes of their own, which can be inserted in the budget without item-by-item votes.
Kennedy charged that the Republicans had not left the Democrats enough time to debate the 14 amendments they have prepared.
In a day of intense maneuvering aimed at patching together coalitions for an alternative to President Reagan's budget, already declared unacceptable in both houses, House GOP leaders also reached a tentative accord with some Republican moderates and conservative Democrats on a budget alternative. It will be offered as a substitute to the Democratic budget proposed last week by the House Budget Committee.
Compared with the Democratic proposal, the new House Republican plan would make fewer cuts in defense and more in domestic programs, and would include a considerably smaller tax increase.
According to Republican sources, it would produce a deficit of just under $100 billion, compared with the projected Democratic deficit of $104 billion.
Other than its resulting in a smaller deficit and that it never contemplated cuts in Social Security, it is considerably closer to the Senate budget than to the Democratic plan from the House Budget Committee.
"I believe we have the essence of a bipartisan compromise," said Rep. Phil Gramm (D-Tex.), who helped put together the conservative coalition that passed Reagan's huge program of tax and budget cuts last year.
But other sources cautioned that the coalition is fragile, and they shied away from predicting passage of the package. "Nothing may pass the first time around," one House Republican said, "but this is a good start toward building the kind of coalition we need in the end."
The picture in the House, which will take up its version of the budget later this week, is complicated by many alternatives, including some from liberals and from conservatives and a "bipartisan" plan from a group of Republican and Democratic moderates. That was being touted as everyone's second choice.
The flurry of activity yesterday reflected the difficulty of trying to patch together enough tax increases and spending cuts to lower the deficit close to $100 billion, which many lawmakers consider necessary to persuade financial markets to lower interest rates. Without such changes, next year's projected deficit would exceed $180 billion.
But cuts necessary to satisfy one group anger another, and the eventual compromises, especially "sweeteners" for popular programs, tend to drive up projected deficits.
Reagan had embraced the Senate Budget Committee's proposal officially, although White House aides more recently seemed to welcome efforts to back away from the Social Security cuts, which were seen as a political liability for the president.
Office of Management and Budget Director David A. Stockman participated in the House Republican meetings, led by Minority Leader Robert H. Michel (R-Ill.), but participants said that could not be interpreted as a White House blessing for the results.
The new House Republican plan reportedly proposes $27 billion in defense cuts over the next three years, compared with $47 billion in the House Democratic budget proposal. Cuts in domestic programs would amount to $81 billion in the Republican plan and $39 billion in the Democrats' proposal.
The Republicans are proposing tax increases of $95 billion by 1985, as the Senate plan also anticipates, while the House Democrats called for tax increases totaling $147 billion over the three years.
In the Senate, the Republicans faced an embarrassing defeat on Social Security unless they took from the budget the $40 billion in unspecified savings, which many members feared would be interpreted by voters as likely benefit cuts. At least eight Republicans were prepared to join most Democrats in voting to drop the $40 billion plan.
Even Domenici, perhaps the Senate's strongest advocate of restraint in the growth of benefit entitlement programs such as Social Security, conceded Monday that he faced probable defeat on the issue.
But he and others insisted on mandating cost-saving measures to assure the solvency of Social Security by the end of the year, based on recommendations from a special commission studying the system's financial problems.
"We're now saying, 'Do it and, whatever the results, they'll be put in the budget,' " he said.