Congressional negotiators and Reagan administration officials indicated yesterday that they may agree this week on a compromise plan to reduce the federal deficit, but predicted that any agreement is unlikely to affect Social Security or other federal retirement plans.
"We are closer to an accord than we were last week," said House Majority Leader Thomas S. Foley (D-Wash.) as he emerged from a late afternoon meeting at which House and Senate Democrats refined a response to a plan offered last week by House Minority Leader Robert H. Michel (R-Ill.).
Foley, who has repeatedly played down expectations of an early agreement in the talks that began two weeks ago, said the Democrats had prepared "some ideas" that he hopes can "attract bipartisan support" when they are presented today to Republicans and Reagan administration negotiators.
Foley said the Democratic proposals are in the "same ballpark" as last week's plan offered by Michel, which proposed a $30 billion reduction in the federal deficit this year. Foley said the Democratic alternative would call for equal amounts of new revenues and spending cuts.
One Democratic congressional aide said the "chances are very, very strong" that an agreement on the major revenue and spending-cut components of the plan could come as early as today. "They're very close to the terms where everyone wants to end up," said the aide.
Meanwhile, negotiators on both sides said that hopes are dimming for any agreement on cutting cost-of-living allowances for federal retirees, an ingredient that has frequently been mentioned as a means of reducing the deficit by far more than the $23 billion goal set by the revised balanced budget law.
"It seems to be dead," said Sen. J. Bennett Johnston (D-La.), "though there is a lot of sentiment that it should not be." Johnston said that "obvious political difficulties" appear to have doomed any effort to cut retirement benefits.
Another person familiar with the negotiations said that President Reagan is willing to accept some form of reduction in inflation adjustments to retirement benefits, including those received by Social Security recipients, but not if it means going along with Democratic demands for higher taxes than the administration is willing to accept.
It is widely assumed that Democrats will accept cost-of-living reductions only in exchange for higher taxes than the administration has so far signaled it will accept. Michel's plan, which was endorsed in concept by the administration, called for $6 billion in real tax increases, about half what Democrats have sought in their tax bills.
Although the plan Michel proposed Friday contained less from tax increases and more from spending cuts than Democrats prefer, it did represent significant movement on higher revenues and defense spending.
White House spokesman Marlin Fitzwater said again yesterday that the president's position in the talks is that "Social Security is not on the table." But when pressed whether that formulation applies to cost-of-living reductions, Fitzwater replied, "Well, I'm not going to give a definition."
If negotiators fail to reach an agreement on cutting $23 billion from the fiscal 1988 deficit by Nov. 20, the balanced-budget law requires across-the-board spending cuts equally apportioned among military and domestic programs -- although a number of programs, including Social Security, are exempt from the automatic trims.