Senate Rejects Curb on Social Security Hikes : Vote on Benefits Issue Called Start of Budget ‘Demolition Derby’

The Senate, launching what one Republican warned could become a “demolition derby” for the deficit reduction package backed by the Reagan Administration, Wednesday soundly rejected the package’s curb on Social Security benefit increases.

Despite the lopsided 65-34 vote to throw out the package’s largest single domestic spending cut, Senate Majority Leader Bob Dole (R-Kan.) said that the issue would “probably be revisited at a different time, probably with the different outcome” as the Senate continues what is likely to be more than a week of debate.

‘Like Humpty Dumpty’

“A week from now,” Dole said, “we’ll put (the package) back together like Humpty Dumpty.”

Opponents of the package will get a chance to take a swipe at another key element today when the Senate debates a proposal by Sen. Charles E. Grassley (R-Iowa) to allow no growth in fiscal 1986 defense spending beyond inflation, which is expected to be about 4% next year. The package would provide a 3% increase on top of inflation, half of President Reagan’s original request.

The amendment to restore full Social Security benefits drew the support of 19 Republicans, more than one-third of the 53 GOP senators. All Democrats voted for it except the Senate’s oldest member, 84-year-old John C. Stennis of Mississippi.

California Republican Pete Wilson voted against restoring the full benefits.

The vote was taken at the end of a particularly bitter six-hour debate that reflected the emotional and political explosiveness of the Social Security issue. Some senators made personal attacks on those who disagreed with them, a rare breach of Senate clubbiness.

The package’s Social Security provision would limit annual benefit increases for the next three years to approximately the rate of inflation minus two percentage points, with guaranteed increases of at least 2%. With inflation expected to be about 4% over the next few years, Social Security recipients could expect to receive about half the increase that they would be likely to get under current law.

The proposed curb on the growth of not only Social Security but also other government pension programs would provide more than 10% of the savings generated by the package, a compromise reached by Senate Republican leaders and the White House. It is such a crucial element of the overall plan that abandoning it “could set the stage for . . . a demolition derby,” said Sen. William L. Armstrong (R-Colo.).

Dole had enraged Democrats by denying them the opportunity to sponsor the amendment restoring Social Security benefits. Instead, he gave Republican Sens. Paula Hawkins of Florida and Alfonse M. D’Amato of New York--both of whom face reelection next year in states with large elderly populations--the chance to score political points with older voters by presenting the amendment.

“The Republican Party has never liked Social Security,” Sen. Donald W. Riegle Jr. (D-Mich.) said. “Every single proposal (to cut it) has come from that side. You’re not fooling anybody.”

Dole, in a scathing rebuttal, accused Democrats of “self-righteous rhetoric” and said that Riegle “never met a federal program he didn’t like, particularly if it means spending.”

‘In Big Trouble’

Partisan tension heightened as Budget Committee Chairman Pete V. Domenici (R-N.M.) said that the elderly who receive Social Security “are willing to share in some sacrifice if they think it is good for their country and they think it is fair.” The elderly, Domenici said, “might not know it yet, but their country is in big trouble.”

Sen. Daniel Patrick Moynihan, a New York Democrat who had hoped to offer the amendment himself, countered: “Big trouble indeed, Mr. Chairman, and you have presided over it. You have doubled the debt of this country in five years.”

The package aims to cut $52 billion from a federal deficit that is projected to approach $230 billion next year without spending cuts or tax increases. That reduction, many leading economists say, is the minimum required to hold down interest rates and keep the economy growing.