Social Security Benefit Freeze Proposed by Democratic Senator

The senior Democrat on the Senate Budget Committee, in a move highlighting internal party divisions, Friday proposed freezing Social Security benefits for one year as part of an overall plan to reduce federal deficits through spending cuts and higher corporate taxes.

Sen. Lawton Chiles of Florida discussed his recommendation in a telephone interview as Senate Democratic leader Robert C. Byrd of West Virginia was telling a news conference that he and a “great majority” of Democrats will fight any changes in Social Security benefits when the Senate begins debating the 1986 budget next week.

GOP Would Limit Hike

President Reagan and Senate GOP leaders have proposed limiting Social Security cost-of-living increases to 2 percentage points less than inflation, with a guaranteed minimum 2% increase.

Many Republicans have privately expressed reservations about that proposal, and Byrd and Chiles both agreed that they would vote against it.

But Chiles said that he intends to offer an alternative to the GOP budget that provides for a one-year freeze on Social Security benefits as part of an overall package of spending cuts and tax increases. He would partly offset the freeze by providing extra money for programs serving the low-income elderly, such as Supplemental Security Income. The GOP plan would also do that, but to a lesser extent.

The Republican plan provides $295 billion in spending cuts over three years and no tax increases, but Chiles said that no package can clear the entire Congress unless some tax hike is included.

Higher Corporate Taxes

He said that his approach would provide about $210 billion in spending cuts and $70 billion in higher corporate taxes--with a provision requiring the spending cuts to take effect before taxes could go up.

He said his approach would cut deficits by nearly as much as the Republican plan, which envisions red ink of $98 billion in 1988.