President Reagan has scheduled a meeting with Republican congressional leaders on deficit-reduction efforts today, as officials expressed guarded optimisim that negotiations with Capitol Hill are making progress.
A senior White House official said yesterday that Reagan and congressional negotiators might reach agreement this week on a package that would win bipartisan support on Capitol Hill.
"In a lot of ways they're closer than they think they are," said the official, who asked he not to be identified. "They're down to talking about . . . numbers. We may not know how to solve the great issues of our time, but we do know how to negotiate numbers."
Yesterday's apparent progress came as Democrats and Republicans traded concrete proposals. Sen. Pete V. Domenici (N.M.), the ranking Republican on the Senate Budget Committee, presented a proposal to cut the deficit by about $30 billion in fiscal 1988 and about $45 billion the following year. The proposal includes about $9 billion in new taxes.
Domenici would not discuss the details of his proposal but said late yesterday that the talks have reached "a growing frustration level, and that's good." The senior White House official, who also would not discuss details, said an agreement might be reached today or Saturday. Such expressions of optimism have often proven wrong in the past.
Congressional negotiators emerged from their final meeting late yesterday afternoon suggesting that the talks may have entered a more hopeful, productive stage after days of frustration.
"I'm deeply encouraged; there's light in the tunnel," said Rep. Silvio O. Conte (R-Mass.), who hours before had dismissed other negotiators' upbeat statements of recent days as "baloney" designed to mislead the news media.
According to officials familiar with the talks, there was renewed, though scattered, interest in making cuts in popular entitlement programs -- including retirement benefits and even Social Security, which was the only area in which Reagan ruled out cuts before the discussions began.
In returning to a consideration of reductions in cost-of-living allowances (COLAs) for federal retirees and Social Security beneficiaries, the negotiators appeared to be conceding that entitlement cuts are the only way to achieve major reductions in the deficit given the deep divisions over taxes, defense and domestic spending.
The lawmakers and others close to the talks were exceedingly cautious in even discussing the issue of retirement-benefit cuts, referring to them indirectly. In the talks, for example, Social Security has been renamed "the unmentionable," and House Majority Leader Thomas S. Foley (D-Mass.) has said cuts in the retirement program could only come about through "immaculate conception."
Rep. Leon E. Panetta (D-Calif.), one of the congressional negotiators, said the talks have produced the conclusion that "you absolutely have to have some symmetry to make any program work. There has to be a sense of fairness that everyone makes a sacrifice." Asked whether that means Social Security cuts will have to be part of the mix, Panetta replied: "I'll leave that to you."
Some negotiators have argued that it would be unfair to cut some federal retirement programs without including Social Security. Conte also appeared to suggest that retirement COLAs might be part of a package. The negotiators, Conte said, "realize that for the good of the country, to bring the deficit down, everyone is going to have to give."
According to one source, negotiators are discussing disallowing anywhere from the first one to three percentage points of any annual cost-of-living adjustment. Disallowing the first two percentage points would save about $4 billion in the current fiscal year and $12 billion in fiscal 1989.
Whether any package that includes a reduction in retirement benefits for those on Social Security can pass Congress is another question. "What a paradox," said Rep. Sam M. Gibbons (D-Fla.). "You're going to bail out the wealthy gamblers on Wall Street with COLAs? That can't fly from here to there."
House Budget Committee Chairman William H. Gray III (D-Pa.) was less optimistic than many. "We're about the same as we were this morning; we've got a long way to go," he said.