President Reagan said last night that he would "look at" a deferral in Social Security cost-of-living adjustments to help reduce the federal deficit if he is "faced with an overwhelming bipartisan majority in both houses in support of that."
In his remarks at a nationally televised news conference, Reagan appeared to be opening the door for the first time to a one-year delay in Social Security inflation adjustments. But he continued to stand fast against any tax increase or scaling back of his military buildup.
During his reelection campaign, Reagan promised through a spokesman not to tamper with any aspect of Social Security, including annual cost-of-living adjustments. Senate Republicans have suggested a one-year delay that could reduce the estimated deficit by about $6 billion next fiscal year and save $22 billion over three years. Deficits are expected to be over $200 billion a year through the rest of the decade if no action is taken to cut them.
While Reagan said last night that he would resist any changes in Social Security, he added that, if Congress insisted, "I would have to look at that situation and what I was faced with, with regard to a possible congressional mandate."
Reagan's comments came as Senate Republicans got off to a shaky start yesterday in drafting an alternative to Reagan's budget for fiscal 1986 as defense advocates, led by Armed Services Committee Chairman Sen. Barry Goldwater (R-Ariz.), claimed that a spending freeze could jeopardize national security. Details, Page A3.
The president said the budget request he is scheduled to submit to Congress Feb. 4 would meet his goal of holding total spending next fiscal year to this year's levels, not counting interest payments on the national debt. But he acknowledged that some programs "are going to spend more, some are going to spend less, and some we're just going to wipe out entirely." White House officials have said Reagan will not meet another goal that they had originally set in connection with reducing the deficit to $100 billion, or about 2 percent of the nation's expected gross national product, by 1988.
The officials said domestic spending cuts approved by Reagan fall short of the goal. But he has resisted retrenchments in either Social Security or defense, which together with interest comprise two-thirds of the budget.
Reagan also has resisted tax increases and said last night that a tax increase would be "counterproductive" and would hurt the economic expansion.
The president was not specifically asked, and did not mention, the $100 billion deficit goal for 1988 last night, but he did vow to put the deficit on an unidentified "declining path" in later years.
Reagan stood fast against any further cuts in his defense buildup, of the sort Congress is discussing, saying that "defense is not a program in which we can determine what we want to spend. That is dictated by outside influences, things outside our country."
After noting that the Defense Department offered "a bigger cut than had been asked of it" for next year, Reagan said he agreed with the military that "it is impossible to make a projection over three or five years as to what you will spend. . . .
"What if some development on the other side of the ocean absolutely makes it necessary for us to do something that we can't even contemplate now with regard to national security?" Reagan asked, echoing an argument made recently by Defense Secretary Caspar W. Weinberger.
Weinberger has agreed to cuts for next year of about the size Reagan's budget writers want, but he has fought changes that also would cut outlays in future years. Reagan seemed to support this last night, saying it is "impossible" to predict spending over the long term.
". . . There isn't any economist in the world who can . . . accurately tell you what you're going to need down the road, and I'd like to point out that all the projections we inherited went out the window, they didn't match what we're doing now," Reagan said. "Those projections, frankly, I pay no attention to them."
On Social Security, Reagan's chief spokesman, Larry Speakes, told reporters during last year's reelection campaign that the president would "never stand for a reduction of Social Security benefits for anybody . . . ."
Last night, Reagan was asked whether the cost-of-living adjustment in Social Security was "off-limits, as you promised in the campaign, or is it negotiable?"
"Well . . . I never specifically mentioned that," Reagan said. "I did say, however, that I would resist anything that would reduce the payments and the benefits . . . ." Reagan recalled that Democratic presidential nominee Walter F. Mondale had accused him of having a "secret plan" to reduce Social Security benefits.
"I had no such plan, and I am resisting this," Reagan said.
The president again said that Social Security "is not a part of the deficit problem. It is totally financed by a payroll tax, and that tax is totally dedicated to that one program. If Social Security's spending were reduced, you could not take that money saved and use it to fund some other program in the deficit. It would simply go back into the Social Security trust fund."
However, Social Security taxes are counted as federal revenues, and benefits as spending, so changes in either taxes or benefits directly change the deficit estimates.
The president also vowed to press Congress for aid to the rebels fighting the Sandinista government of Nicaragua, which was terminated by the last session. A vote is expected early this year.