House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) told President Reagan yesterday that he will not obstruct his budget in the House but insisted that spending cuts to achieve deficit reductions must come from defense as well as domestic programs.
O'Neill also said for the first time that Social Security was "on the table" for bargaining over deficit cuts, but he told Reagan that the Democrats will not take the lead in proposing cuts in any part of the budget, including Social Security benefits.
In an extraordinarily conciliatory statement after a post-inaugural meeting between Reagan and leaders of both parties in Congress, O'Neill said he told the president that "in my 50 years of public life I've never seen a man more popular than you are with the American people," and added:
"We're not going in any way to thwart the will of the American people, we're not going to be obstructionist in any manner."
But O'Neill also made it clear that Reagan and Senate Republicans would have to take the lead in proposing controversial spending cuts to reduce $200 billion annual deficits and thereby take the political consequences for the results.
"You can be sure that the Democrats are not going to cut Social Security as a whim of their own, no way . . . . I said, 'We need leadership from you, Mr. President, on the items that are out there," said the speaker, who has firmly resisted Social Security cuts in the past. Reagan has said he, too, will resist such cuts unless bipartisan majorities in Congress press them.
O'Neill's comments came as the Senate Republicans' drive to put together a big deficit reduction package slowed to a crawl, threatening their timetable for action and raising questions about whether their targets can be achieved.
After moving quickly to seize the initiative on deficit reductions three weeks ago, Republican senators remain far from agreement on key elements of a spending freeze that would include defense and Social Security and even farther from nailing down additional program cuts necessary to meet the savings target.
In interviews yesterday, Senate Majority Leader Robert J. Dole (R-Kan.) and other GOP leaders continued to express optimism that they can draft a plan to cut deficits by half to less than $100 billion by 1988, starting with at least $50 billion in spending cuts next year.
"I'm optimistic . . . . We haven't backed backed down on anything. . . . It's moving along," Dole said.
But several key senators cited problems that could seriously hamper their efforts, ranging from Reagan's refusal to consider significant restraint in defense spending to a reluctance among individual senators to take the first plunge in cutting or eliminating sensitive domestic programs.
With some senators not returning to Washington until this week, consultations with White House officials also are taking longer than expected, thereby delaying the program-by-program analysis that committees are undertaking to nail down the specific spending cuts that will be included in an overall package.
While Dole continued to insist that the Senate was "on schedule" in its work, Budget Committee Chairman Pete V. Domenici (R-N.M.) said yesterday he would be surprised if the committees came up with $50 billion in spending cuts by Feb. 1, the original target for putting a plan together.
Stressing the need for concerted action so that no one has to go first in proposing unpopular moves, Finance Committee Chairman Bob Packwood (R-Ore.) said, "We're going to have to step together and we aren't there yet."
Beyond the timetable, defense spending is emerging as a critical problem. Not only does defense account for a big chunk of proposed savings over the next three years, but it also is widely regarded as a key lever for forcing domestic spending cutbacks that might otherwise be unpalatable to Democrats and moderate Republicans.
"At the moment, there are not the [defense] cuts there because, at least in the few meetings I've been in with the president, he has all but indicated if we send him a defense budget that is too low, he'll veto it and [take] it to the country," Packwood said.
As of now, he added, Senate Republicans "have no heart right at the start for a knock-down, drag-out with the president over defense."
In his comments outside the White House, O'Neill said he told the president that, while he was open to bargaining over the entire budget, "we're not just going to talk about nondefense items."
Noting the Senate Republicans' apparent determination to cut deeper into defense than Reagan wants, he said, "It seems to me he has a problem in his own party with regard to defense.