Senate Democratic leaders split yesterday over Social Security as Sen. Lawton Chiles (D-Fla.), ranking Democrat on the Budget Committee, outlined a deficit-reduction alternative that would freeze benefits for a year and Minority Leader Robert C. Byrd (D-W.Va.) stepped up his campaign against any cutbacks.
Chiles' proposal was seen as significant, especially because he played the key role in passage of a budget compromise last year.
Also yesterday, the White House and Senate Republican leaders agreed on relatively minor modifications in their own budget plan in preparation for the opening of debate Monday. They decided to retain the Small Business Administration's minority procurement services and advocacy office, although the rest of the agency, including its loan program, would be eliminated.
Sources said it also was agreed to phase in transaction fees for government credit programs rather than impose them immediately. Increases in fees for veterans' housing loans also would be modified.
Chiles, the first Democrat to come up with a comprehensive alternative, would restore some domestic spending that the Republicans would cut, especially in "growth" areas such as research and trade promotion. He would make up the difference by restraint in defense spending and tax increases of roughly $1 for every $3 in spending cuts, amounting to about $70 billion in unspecified revenue increases over three years. No individual income tax increases would be required, he said.
On Social Security, Chiles would eliminate next year's cost-of-living increase, although he would set aside 20 percent of the resulting savings to protect low-income retirees, possibly through increases in benefits under the Supplemental Security Income (SSI) program for the aged, blind and disabled.
In an interview, Chiles, who unsuccessfully challenged Byrd for the post of minority leader last year, said he was introducing the plan in part because he believes Democrats want "something positive to vote for."
As Chiles spread word of his plans, Byrd appeared before television cameras with Sen. Donald W. Riegle Jr. (D-Mich.) to vow an all-out drive to retain full cost-of-living increases for Social Security.
Office of Management and Budget Director David A. Stockman continued to push for the Republican plan to cut the cost-of-living increases, calling it a "small sacrifice" to keep the economy growing.