A meeting called to pave the way for a possible budget compromise between President Reagan and Senate Republicans flared into disagreement yesterday over the key issues of Social Security cost-of-living adjustments and defense spending, informed sources said.
Senate Republicans suggested to senior White House officials, including chief of staff Donald T. Regan, that they would take a course independent of the president's unless he agrees to compromise on defense and Social Security, the sources said.
Reagan, in his nationally televised news conference last night, hung tough in defending his budget, particularly his defense budget. He said he had cut the defense budget before submitting it, and "any further cuts are actually going to run the risk of lowering our capability at preserving national security."
He also said "we're wasting a lot of time" talking about Social Security because "Social Security is running at a surplus. And it is totally funded by a tax that can only be used for that purpose. So, when we talk about Social Security, we're not really getting at the deficit problem at all."
The Senate Budget Committee has voted a one-year delay in Social Security cost-of-living adjustments (COLAs) and no growth above inflation in defense spending next year.
The senators who met with Regan yesterday warned the White House that unless Reagan agrees to a compromise on defense spending, he may get a Pentagon budget for next year with no growth above inflation, officials said.
Sources familiar with the session described it as a heated "flare-up" on the eve of today's White House meeting between the senators and Reagan. Yesterday's meeting left key senators increasingly doubtful of any cooperation with Reagan on the budget, the sources said.
Included at the Capitol session were: Majority Leader Robert J. Dole (R-Kan.), Budget Committee Chairman Pete V. Domenici (R-N.M), Armed Services Committee Chairman Barry Goldwater (R-Ariz.), Sen. Paul Laxalt (R-Nev.), Sen. William L. Armstrong (Colo.), who is second-ranking Republican on the budget panel, Majority Whip Alan K. Simpson (R-Wyo.) and Appropriations Committee Chairman Mark O. Hatfield (R-Ore.).
The White House officials included Regan, Office of Management and Budget Director David A. Stockman, national security affairs adviser Robert C. McFarlane and legislative affairs assistant M.B. Oglesby.
The meeting was planned as a prelude to today's White House session, which some officials said they had hoped would lead to a compromise between Reagan and the senators despite their major differences on defense, Social Security and domestic budget cuts.
Yesterday, Domenici reviewed what the Budget Committee had approved, including three-fourths of the amount of domestic, non-defense cuts Reagan had sought, as well as the one-year freeze on Social Security COLAs and no increase above inflation for defense.
Hatfield reportedly told the White House officials that they risked getting no growth for defense if Reagan continues to balk at compromise.
Laxalt agreed with this assessment, said one source who was present. The senators presented the White House with a "pretty united front" on this point, the source said.
Regan asked whether the senators would tell this to the president today. Armstrong was quoted as responding, "Everyone in this room has told him at least four times."
Regan also told the senators that Reagan would "never buy" a Social Security freeze or the zero real growth in defense approved by the Budget Committee. Laxalt said that all the senators can expect from the White House on Social Security is "benign neglect," according to one official.
The official said the message from the senators to the White House officials was, "Either the president goes with us or we go without you."