Leaders of the president's advisory commission on Social Security held secret talks yesterday, but proposals to impose in 1984 payroll tax increases already scheduled for future years met strong objections from Sen. William L. Armstrong (R-Colo.), and no compromise was reached, sources said.
Present at yesterday's meetings were the commission chairman, Alan Greenspan; Sens. Armstrong, Robert J. Dole (R-Kan.) and Daniel Patrick Moynihan (D-N.Y.); Rep. Barber B. Conable Jr. (R-N.Y.); Robert Ball, former commissioner of Social Security; White House chief of staff James A. Baker III; Office of Management and Budget Director David A. Stockman and presidential assistant Richard G. Darman.
Sources said there was considerable discussion of a possible compromise involving taxing half the Social Security benefit for those recipients with higher incomes, advancing to 1984 part of the 1985 and 1990 payroll tax increases, delaying the annual cost-of-living adjustment, and mandatory Social Security coverage for new federal employes.
But one source said Armstrong strongly objected to advancing the 1985 and 1990 payroll taxes.
Armstrong declined to discuss the meeting other than to say "we're not close to agreement." But he did say in an interview that moving the 1985 and 1990 payroll tax increases to 1984 would be unacceptable and would cause a tremendous objection from conservatives.
Sources said Armstrong also insisted that part of the final compromise, if one is worked out, should be removal of any penalty for continuing work after an elderly person begins receiving benefits.
Armstrong said that accelerating the scheduled payroll tax increases would be extremely harmful to many businesses because of the extra burden of taxation, especially on small businesses.
He also said that the reduction of benefits for earnings by retirees should be ended.
The leaders of the commission, which must file its final report by Jan. 15, have been meeting in a strenuous round of last-minute negotiations for several days.