Office of Management and Budget Director David A. Stockman criticized some key elements of the Senate Republicans' deficit-reduction package yesterday and warned that additional cuts in military spending would produce only limited savings.
At the same time, Stockman said "pretty steady and pretty encouraging progress" is being made by the White House and the Republicans on a possible compromise and urged lawmakers to look toward deeper spending cuts in discretionary domestic programs.
The deficit problem "cannot be fixed with any of the fiscal placebos being bandied about on Capitol Hill such as program freezes, or spending restraints or loophole closings or tax expenditure cuts," Stockman told the National Press Club.
He said "there will be some adjustment" between the administration's proposal to increase defense spending authority by 5.9 percent above inflation in 1986 and the Senate Republicans' plan, which would allow no growth beyond inflation next year and 3 percent in each of the following two years.
But, Stockman warned, "Big savings in defense come from canceling programs and reducing core structures, not from paper growth-rate exercises in which some of our distinguished legislators apparently are plugging in their locker combination like 0-3-3 or something of that sort.
"While every budget has its wiggles, and defense is no exception," he said, "none can be radically cut without sweeping policy and program changes. In the case of defense, these are not in the cards because the national security risks would be too great -- something that most of the Congress already knows full well and the rest will soon find out."
Instead, Stockman called for a "thoroughgoing housecleaning of the accumulated baggage in the government's discretionary sector," including Amtrak and local transportation systems, the Small Business Administration and Urban Development Action Grants.
"All of these programs are societal amenities, not essentials. They represent . . . parochial claims and the episodic tinkering projects that were marginally affordable in an earlier, happier fiscal era."
The Senate Republicans' plan, aimed at cutting the deficit in half to $100 billion a year by 1988, includes a freeze on 1986 cost-of-living adjustments (COLAs) for Social Security recipients.
That freeze and adoption of administration plans to hold down Medicare costs would have minimal impact, Stockman said, because they total 3 percent of the annual bill for Social Security and other major "social contract" programs.
He said President Reagan's persistent opposition to a tax increase means "taxes are off the table."
He added that "most of the obvious, blatant loopholes" in the tax code have been closed and proposals for further closings are "not just idle talk" but "double talk."