Three senators who will play a key role in budget negotiations with the Reagan administration urged yesterday that the discussions explore ways to make even deeper reductions in the federal deficit than the $23 billion plan now moving through Congress.
With varying degrees of enthusiasm, Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.), Senate Budget Committee Chairman Lawton Chiles (D-Fla.) and Senate Minority Leader Robert J. Dole (R-Kan.) suggested yesterday that the talks that begin today should aim for a multiyear plan with more ambitious goals to send a reassuring message to troubled financial markets.
Meanwhile, a key administration official, Council of Economic Advisers Chairman Beryl W. Sprinkel, said that "one of the options" to be discussed during the negotiations is a freeze on most federal spending at last year's levels.
A spending freeze, discussed by Sprinkel on ABC News' "This Week With David Brinkley," has also been endorsed by some congressional Republicans, and would save about $11 billion.
More important from the administration's viewpoint, a freeze would mean a smaller reduction in defense spending and a greater cut in domestic accounts than the automatic spending reductions called for by the revised Gramm-Rudman-Hollings law.
A freeze would give the Pentagon about $13 billion more in spending authority than it would have under the automatic cuts, and about $3.6 billion more in actual outlays this year than under the $23 billion deficit reduction required by Gramm-Rudman-Hollings.
Speaking on CBS News' "Face the Nation," Dole said "we ought to do more" than the $23 billion deficit reduction that would be achieved by either the tax increase and spending-cut plan now moving through Congress or the automatic Gramm-Rudman-Hollings cuts.
Dole, endorsing a "multiyear proposal" for deeper deficit reductions, said that achieving "$23 billion or $24 billion is not going to make that much of an impact" on world financial markets.
"We certainly should do more," agreed Chiles, arguing that more ambitious goals would send "a strong signal" to the marketplace.
Bentsen, who last week was cool to the idea of using the opportunity afforded by the stock market crash to push for more than $23 billion in deficit reduction, said yesterday on "This Week with David Brinkley" that he is now "quite prepared to do more."
Also appearing on "Face the Nation," former commerce secretary Peter G. Peterson said that financial markets "would be very disappointed" if the budget negotiations yield an agreement to reduce the deficit by only $23 billion this year.
Peterson said that the marketplace "is not going to be reassured" until the government grapples with reforms in entitlement programs such as Social Security, Medicare, Medicaid and federal retirement benefits. He suggested that a national commission be convened to propose such reforms, a mechanism he said would shield elected officials from the "politically toxic" idea of cutting into middle-class entitlement programs.
Dole gave some tepid encouragement to the idea of a national commission, but recalled that President Reagan has said the only taboo subject in the budget talks is cutting Social Security.
House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.), meanwhile, said it would be difficult for Congress to vote for a deficit-reduction package larger than $23 billion because it would require a larger tax increase than the $12 billion bill slated for House floor action this week.
"When you are in the war room it looks easy, but when you are in the trenches it is a little difficult," said Rostenkowski, who will be on the congressional negotiating team that will meet with administration officials later this week.
Sprinkel also hinted that Reagan may be open to some of the tax increase proposals included in the House and Senate versions of the tax bill when he said that "some say that closing loopholes are nondeleterious" to the economy.
In announcing last week his willingness to negotiate a budget accord with "everything on the table," Reagan stressed that he would continue to oppose any tax increase that is "deleterious" to the economy.
Congressional leaders are to kick off the budget negotiations today with a morning meeting with Reagan at the White House, a session that is expected to be quickly followed by more substantive talks between lawmakers and senior administration officials led by White House chief of staff Howard H. Baker Jr.
"We're ready to negotiate," said Rostenkowski yesterday.