Senate Budget Chairman’s Deficit-Cutting Plan Aims at Social Security, Military

Senate Budget Committee Chairman Pete V. Domenici (R-N.M.), officially launching his committee’s efforts to write a fiscal 1986 federal budget, presented a sweeping proposal Monday that would freeze Social Security benefits for a year and hold next year’s military spending increase to about half of what President Reagan has requested.

Domenici’s plan fills the vacuum created by the failure of Senate Majority Leader Robert J. Dole (R-Kan.) and other Republican leaders to put together a deficit reduction package.

“It is now impossible to have any more meetings with Republicans, with Democrats, with anyone, and come up with numbers we can agree on,” Domenici said. He said it is up to his committee to engineer a budget that is “meaningful, tough and reduces the deficit.”

Domenici’s proposal opened what will probably be several weeks of meetings by the Budget Committee to sift through alternative spending cut packages.

Aims for Deficit Cuts

His plan seeks to cut the federal deficit, estimated to reach $227 billion next year without congressional action, to $165 billion. Reagan, by contrast, has proposed a fiscal 1986 deficit of $180 billion.

By 1988, Domenici’s plan would trim the deficit to $98 billion, compared with the $144 billion proposed by Reagan and the nearly $250 billion that it would reach under current spending and tax policies.

Among the features of Domenici’s plan:

--Increases of 3% in military spending, after inflation, in each of the next three years.

--No cost-of-living increases next year in federal benefit programs except those exclusively for low-income people. Against Reagan’s wishes, the proposal would include next year’s Social Security increase in the freeze.

Changes Include Military

--A restructured military retirement system, to give incentives to officers to remain on active duty past the age of 55.

--Denial of the 3% military pay raise requested by Reagan for July and of the pay raises that all federal civilian and military employees would ordinarily receive in fiscal 1986, which begins on Oct. 1, 1985.

Domenici’s plan accepts many of the cuts proposed by Reagan, including elimination of Amtrak subsidies, the Small Business Administration, urban development action grants and general revenue sharing grants for local governments. But it rejects some reductions the Administration is seeking, including a 5% pay cut for federal civilian employees in fiscal 1986.

Supports Power Subsidies

And keeping in mind his own Western constituency, Domenici would also deny a Reagan request to end government subsidies to the federal power marketing administrations, which sell electricity from 123 large dams, mostly in the West. Without the subsidies, the cost of electricity generated by these quasi-governmental agencies would rise by an estimated 6% to 8%.

If the committee’s opening session is any indication, its deliberations are likely to be marked by partisan squabbling. It spent most of the first meeting arguing over whether to use White House or Congressional Budget Office estimates as the “base line” from which to measure the committee’s progress toward reducing the deficit.