Deficit Reduction Package a Personal Gamble for Dole

With barely a few weeks of experience under his belt as Senate majority leader, Kansas Sen. Robert J. Dole is taking an enormous personal gamble as he tries to engineer one of the most audacious political compromises of modern times.

His ambitious goal is to convince a bipartisan majority of Congress that it should enact a sweeping, three-year deficit-reduction package that is certain to anger every powerful constituency in the nation, including Social Security recipients, defense contractors and farmers.

“Dole’s really way out on a limb,” one key congressional budget aide observed. “He’s either going to be the greatest thing since Lyndon Johnson and the leading presidential candidate (for 1988) by March, or he could be seen as a disaster in his first two or three months.”

Even before it is scheduled to be made public on Feb. 1, Dole’s proposed compromise budget plan has drawn fire from the Democratic leadership in Congress, the Pentagon and virtually every lobbyist in town. In addition, President Reagan and House Republicans have been reluctant to publicly back Dole’s budget-cutting efforts.

For the new Senate Republican leader, however, it is a risk worth taking. If he succeeds, he will not only further his own political career but also help the GOP protect its slim majority in the Senate when 22 Republicans stand for reelection in 1986.

Sen. John Heinz (R-Pa.) explains: “The future of our party will depend on how we handle these economic issues.”

In Dole’s view, the time is ripe for a deficit-reduction effort. “I don’t know of a single candidate who wasn’t out preaching deficit reduction in 1984,” he noted. “And it seems to me there are enough of us in the Senate and the House, Democrats and Republicans, to put together a credible package and one the President will go along with.”

Killing ‘Sacred Cows’

As it now shapes up, Dole’s plan will call for a freeze on all government programs--including defense and Social Security--plus the elimination of such “sacred cows” as Amtrak subsidies, the Small Business Administration and urban development action grants. The B-1 bomber also is being discussed as a possible target for elimination.

Although the President is still officially opposed to a freeze on defense spending or Social Security benefits, Dole appears to be confident that Reagan ultimately will support whatever compromise is agreed to by a majority in Congress. White House sources say Reagan has assured Dole that he would look favorably on such a compromise.

In fact, even though Reagan is officially neutral, the President is lending considerable support to Dole’s efforts. Budget Director David A. Stockman and M. B. Oglesby, chief White House congressional liaison officer--both acting on the President’s instructions--are working closely with Dole to develop a compromise and explain it to members of Congress.

Dole does not seem to be particularly concerned that House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.) and other Democratic leaders strongly oppose his proposed freeze on the annual Social Security cost-of-living increases. On the contrary, he appears prepared to take advantage of an apparent split in the House Democratic majority.

House Democratic leaders, still smarting from Reagan’s landslide victory over Walter F. Mondale last November, are reluctant to let the President wiggle out of his campaign promise not to reduce Social Security benefits. An aide to the House leadership, who asked not to be identified, described Social Security as “the strongest issue the Democratic Party has had over the past few years.”

At the same time, Democratic leaders would feel vindicated if Reagan were forced to raise taxes to reduce the deficit--as Mondale predicted. As a result, sources say, O’Neill is willing to support a freeze on Social Security benefits only if Reagan agrees to a tax increase. As one source put it, “The trade-off is Social Security and taxes.”

Although Reagan has ruled out a tax hike, many rank-and-file Democrats may be willing to support the Dole budget plan anyway. These are the so-called “budget devotees,” mostly the younger Democrats, who disagree with O’Neill and favor Dole’s plan because it trims the deficit by cutting back on the growth in defense spending.

These Democrats believe also that their party should be appealing to younger voters, instead of Social Security recipients. In their view, O’Neill identifies with retirees because he is 72. “An old leadership identifies with an old constituency,” an aide explained.

Unless O’Neill takes steps to heal the breach among House Democrats, Dole probably will be able to build a bipartisan House coalition behind his budget plan over the Speaker’s opposition. One House budget official predicted: “If the Senate Republicans can put together a package, it will go through the House at 100 m.p.h.”

Democrats Backing Dole

In the Senate, likewise, some Democrats are beginning to join ranks with Dole. Although none has yet formally pledged support for Dole’s budget plan, Assistant Majority Leader Alan K. Simpson (R-Wyo.) reported that at least three Democrats--Sens. Ernest F. Hollings of South Carolina, Lawton Chiles of Florida and Russell B. Long of Louisiana--are looking favorably on the proposal.

In fact, one of Dole’s most potent adversaries will be a Republican, not a Democrat. The Senate majority leader expects Defense Secretary Caspar W. Weinberger, who has argued that a freeze on defense spending would jeopardize national security, to wage a bitter fight to defeat the Senate Republican plan.

“Weinberger knows where the levers are and the methods of using different terminology--real growth and perceived growth,” Simpson said. “He’ll be tough to catch.”

But Senate Republicans believe that Weinberger, too, can be tamed.

Newly elected Sen. Phil Gramm (R-Tex.), who as a House member lent his name to the 1981 Gramm-Latta budget compromise, noted that the Administration has accepted cuts in the defense budget in each of the last four years.

“The President has been more flexible on this issue than he has been on any other issue of his presidency,” Gramm said.

Ultimately, Dole’s biggest enemy could be time. Unless he wins majority support for his budget plan by early March, congressional experts predict, the compromise will fall apart. As White House lobbyist Oglesby put it: “If there is any faltering, it won’t survive.”