Cuts a ‘Small Sacrifice’ --Stockman

Budget director David A. Stockman today defended proposed cuts in Social Security cost-of-living payments as a “small sacrifice” needed to keep the economy strong and the benefits coming, but Democrats vowed to keep the benefit hike intact.

Senate Democratic leader Robert C. Byrd of West Virginia and Sen. Donald W. Riegle Jr. (D-Mich.), called on citizens to write their senators in opposition to the Social Security limitation. The cost-of-living curb is integral to the budget compromise with Senate Republican leaders that President Reagan hopes to push through the Senate next week.

“I’m going to do everything I can to protect those benefits,” declared Byrd.

Riegle Reads Letters

Riegle, reading from letters already received, said, “What these people are writing is real. We need to increase these letters until they fill this room.”

Among the letters Riegle read was one which asked: “Why don’t he (Reagan) freeze the price of groceries and utilities instead of picking on the elderly all the time?”

The GOP budget aims to cut $52 billion off the nearly $230 billion deficit in the next fiscal year with spending reductions. About $3 billion would be saved in 1986 by limiting the Social Security increase to 2% no matter how high inflation rises. The current inflation rate is about 4%.

The approach is facing a stiff fight from both Republicans and Democrats, and Social Security is perhaps the most contentious issue.

‘Fabulous System’

Speaking to the National Assn. of Manufacturers today, Stockman said it is time to “remind the American people that today we have a fabulous system of social insurance and medical protection for our retirees.”

“But that entire edifice of retirement and social insurance requires that we have a strong economy,” Stockman said, noting that the Social Security system is funded by payroll taxes.

Stockman, countering charges that 650,000 elderly people would be thrown into poverty by the cost-of-living payment cut, said if retirees had to depend solely on their own resources, 17 million of them would be below the poverty line. But with Social Security and other programs, only 1 million are classified as poor, he said.

Poverty Reduced

“The system that we have reduces, each and every year, 94% of the poverty that would otherwise exist in this country today,” Stockman said. “It is in order to keep that enormous and fabulous anti-poverty system working year in and year out . . . that we must ask for this small sacrifice to get our fiscal system under control and keep our economy going.”

Stockman lashed out at opponents of the Social Security reduction who he said are twisting the poverty figures.

“It’s an excuse for those who want to make political hay out of this necessary restraint to emotionalize the issue that way,” he said.