Budget Committee Mulls Cutting Benefits

WASHINGTON--White House and congressional budget negotiators, a deficit-reduction blueprint suddenly slipping from their grasp, considered yesterday delaying cost-of-living increases for Social Security recipients and federal workers.

Asked what issue was blocking agreement, which seemed so close on Wednesday, House Majority Leader Thomas S. Foley (D-Wa.) said: "Everything."

"I don't expect any early resolution of the talks...it may take us into next week," said Foley, who heads the working group which had hoped to finish by today.

"Maybe it just gets darkest before the dawn," said House Republican Leader Bob Michel of Illinois.

Trying to come up with more spending cuts to satisfy administration demands, the negotiators considered imposing a three-month delay for the cost-of-living increases scheduled in January for federal pay and retirement benefits.

Such a move would cut the deficit by about $2 billion in fiscal 1988.

Several sources close to the negotiations said the idea was favorably received in the group but no agreement was reached. There were doubts about the political viability of a move that could affect so many people.

"It's one of the ideas being discussed," said Rep. Leon Panetta (D-Cal.). Asked who proposed it, he said, "It's bipartisan."

Foley denied that Social Security delays were "on the table" and Sen. Pete V. Domenici (R-N.M.), senior Republican on the Senate Budget Committee, told reporters that "none of the automatic cost-of-living indexes are being seriously considered at this point."

The topic of Social Security cuts is such a hot item the negotiators refer to it as "the unmentionable." Asked who made the suggestion, Sen. Bob Packwood (R-Ore.) said, "I think the Senate chaplain left it."

The group had been zeroing in Wednesday on the outlines of a plan to reduce the deficit for fiscal 1988, which began Oct. 1, by about $30 billion and the deficit for fiscal 1989 by $45 billion or more. The plan included about $10 billion in new taxes this year.

But agreement became elusive when they began discussing important details of how that would be done--especially Republican concerns over what types and amounts of taxes would be raised and the military spending level.

White House representatives, including Treasury Secretary James A. Baker III and presidential staff chief Howard H. Baker Jr., pushed hard Thursday to lower the tax bite from about $10 billion that was being discussed and gain more control over which levies would be raised.

"They say the first things the man downtown will ask are what kind of taxes are there, and how much are they," said Packwood.