President Says He May Approve Benefit Freeze

President Reagan, denying that he had ever promised during the election campaign to protect Social Security cost-of-living increases, said Wednesday night that he might approve a freeze on Social Security benefits next year if he were “faced with an overwhelming bipartisan majority in both houses (of Congress) in support of that.”

But Reagan, speaking at a news conference, said that he would not let Congress push him into a tax increase or a reduction in his defense buildup, even if there were similar support on Capitol Hill for such measures.

“I just don’t believe” critics who say it will be impossible to reduce the federal budget deficit without a tax increase, Reagan declared. “I think a tax increase would be counterproductive,” he added, noting that any boost in taxes would threaten to slow the economy and plunge the nation into a recession.

The President denied also that a move by Senate Republicans to write their own budget nearly a month before he submits his spending plan to Congress shows that he is walking away from his deficit-reduction effort.

“I don’t mind if they want to do what they are doing. . . . Maybe they’ve got some ideas we hadn’t thought of,” Reagan said.

When Republican senators announced last week that they were undertaking their unprecedented budget-writing initiative--which calls for a comprehensive freeze on both defense and domestic spending--White House officials began dropping hints that Reagan might be willing to back a Social Security freeze if congressional Democrats supported the idea.

Newspaper Interview Even before the news conference, Reagan publicly acknowledged that he might accept a freeze on Social Security benefits for a year, saying in an interview with the Dallas Morning News, published Wednesday, that “if Congress en masse came down on the side of, say, reducing or holding off on the COLA--cost-of-living increase--you know, what would I be able to do about that?”

Reagan insisted that the only promise on Social Security that he made during his election fight was that he would not cut benefits, indicating that a one-year freeze on cost-of-living increases did not fall into that category. During his first debate with Democratic nominee Walter F. Mondale, Reagan declared: “A President should never say ‘never’ but I am going to violate the rule and say ‘never.’ I will never reduce Social Security benefits to people that are now getting them.”

Later, White House spokesman Larry Speakes clarified Reagan’s remarks, saying that Reagan “will never stand for a reduction of Social Security benefits for anybody--those now getting them or future recipients, period.”

At the news conference, the President reiterated his argument that Social Security does not contribute to the massive federal deficit, saying that “it’s far more profitable . . . to turn to the programs that are really causing the deficit.”

However, most economists insist that a reduction in Social Security spending would help ease the deficit because the money saved by the Social Security system would be used to finance government spending that otherwise would have to financed by borrowing elsewhere.

‘Outside Influences’ As for defense spending, Reagan said: “Defense is not a program in which we can determine what we want to spend. That is dictated by outside influences, outside our country.”

He said that Defense Secretary Caspar W. Weinberger had come into the White House budget deliberations with “a bigger cut than had been asked” from his department for fiscal 1986 and that all Weinberger is asking for is that Congress “not pin them down” to spending projections for future years.

Reagan vowed also to push the tax revision proposal prepared by his Treasury Department, saying: “As soon as we get the budget in shape and presented, then we will begin the same lengthy process . . . on the tax simplification.”

And he said that he was determined to keep the tax proposal separate from the budget-cutting efforts.

‘Two-Track Approach’ “We’re going to follow . . . a two-track approach,” he said. “We’re not sending them up as a package that (Congress) can begin trading between one and the other.”

Reagan was adamant in saying that the Administration will submit a budget to Congress next month that will hold spending in fiscal 1986 to the level of the current fiscal year and will place the federal deficit on a “declining path.”

“That’s our target, and we intend to meet that target,” he declared.

Earlier Wednesday, Senate Republican leaders insisted that Congress will need “guts in a lot of areas” to achieve their budget-cutting goals because “there are no painless ways to get the deficit down.”

But, after meeting for 2 1/2 hours behind closed doors to discuss options for cutting the deficit, the GOP Senate group ran into objections from some members that an across-the-board freeze might cripple the nation’s defense capabilities.

Nonetheless, members of the group said that they remain committed to the goal of cutting the deficit to $98 billion by 1988--more than $40 billion lower than the tentative Administration target and less than half of the projected $218-billion deficit for the current fiscal year.

The senators were given a list of more than 70 potential program cuts beyond an across-the-board freeze on both defense and domestic spending.

“These are tough options,” said Senate Majority Leader Robert J. Dole (R-Kan.). “There are no gimmicks. There are not any painless ways to get the deficit down.”

Another Meeting

No agreements were reached, and the senators planned to meet today with White House officials and House Republican leaders to go over the budget.

Sen. Barry Goldwater (R-Ariz.), the Pentagon ally who heads the Senate Armed Services Committee, said that, although he hopes to increase the defense budget by as much as 4% beyond inflation, he might be willing to include defense spending in an overall budget freeze.

“If they freeze everything across the board, we could consider defense,” Goldwater said. “If they don’t freeze (domestic programs) across the board, we don’t freeze anything.”

However, the move to eliminate a Social Security increase next January is still in trouble on the other side of Capitol Hill, where both Democrats and Republicans in the House have expressed opposition.

Beyond an across-the-board freeze, the draft budget paper used by the Senate GOP group calls for an additional $36 billion in domestic program cuts in 1988.