Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) yesterday proposed a plan for more than $60 billion in deficit reductions next year that would freeze Social Security benefits, allow about one-half of President Reagan's military buildup and drop the president's proposed 5 percent pay cut for civilian government workers.
Domenici's proposal for an across-the-board domestic spending freeze, augmented by about 90 percent of Reagan's proposed program cutbacks, was unveiled as the Budget Committee began trying to write a congressional budget for fiscal 1986.
The committee's deliberations, which opened with a partisan squabble over whether the administration's deficit predictions are too rosy, marked the first official congressional move to cut deficits despite two months of high-profile posturing, negotiating and speech-making on the issue.
The committee moved only after Senate Republican leaders failed in their effort to come up with a massive package of spending cuts, as they vowed to do two months ago when the White House fell short of its goal of cutting deficits by half, to less than $100 billion annually in three years.
Domenici's plan, dubbed "The Promised Land," would cut deficits by more than $300 billion over the next three years and meet the target of a deficit figure of under $100 billion by fiscal 1988.
The savings are bigger than Reagan proposed in his budget, largely because of deeper cutbacks in defense spending and a one-year elimination of cost-of-living increases for Social Security, which Reagan did not propose.
But the proposal backs off earlier suggestions by Republican leaders that the freeze apply to defense as well as domestic spending.
In an interview with Business Week magazine published yesterday, Reagan was asked if, in light of his campaign statements against tampering with Social Security, he would seek to kill any effort by the Senate to delay Social Security cost-of-living adjustments (COLAs).
"Well, I'm going to see what happens," he said. "I don't mean to say that I'm retracting or trying to prepare the ground for drawing back. The pledge that I made during the campaign in my mind was aimed at repudiating the charges that I was out to reduce Social Security benefits. Frankly, I have not thought about whether this has anything to do with the COLA increases. Inflation is so low that isn't what it has been in the past."
Reagan's chief spokesman, Larry Speakes, said during the campaign that Reagan would not alter any aspect of Social Security.
The Domenici proposal made yesterday would allow for 3 percent growth in military spending after accounting for inflation, or about half the after-inflation increase of 5.9 percent that the administration proposed. Republicans on the Senate Armed Services Committee earlier opposed anything less than a 4 percent increase.
Domenici's proposal would cut the administration's long-term plans for defense outlay increases by $92 billion over three years. The deficit savings next year would be $9 billion on top of $8.7 billion in reductions proposed earlier by the administration. A freeze would save more than $20 billion.
The domestic spending freeze would apply to all but programs targeted specifically at the poor. The inclusion of Social Security is expected to be especially controversial in light of Democrats' vows to protect the program and Republicans' fear of touching the issue after being repeatedly burned on it by Democrats in the recent campaign.
In a major departure from Reagan's budget script, Domenici's proposal would apply the freeze to federal workers, both civilian and military. He would drop Reagan's proposed pay increase for the military as well as the president's proposed pay cut for civilian employes of the government.
Domenici told reporters his plan had the blessing of neither Senate Republican leaders nor the White House, although he indicated that both supported his intention to move ahead with the budget resolution in the absence of a Republican accord on deficit reductions.
Citing testimony that deficits could more than double to as much as $425 billion over the next few years if there is a recession, Domenici gave the committee an especially bleak outlook for the economy if deficit reductions are not enacted with some urgency.