New Budget Plan Offered by Senate : Would Impose Oil Import Fee, Affect Social Security

Senate budget negotiators, scrambling to break a deadlock with the House, offered Thursday to impose a $5-a-barrel oil import fee and to grant Social Security benefit increases and adjustments in income tax brackets for inflation only in alternate years.

But House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.) promptly declared himself “stubbornly opposed” to any tinkering with annual increases in Social Security benefits.

And President Reagan, in a guarded response, said: “I’m not for any tax.” But he added: “The American people deserve to have a budget and the federal government has no excuse for not giving them one.”

‘There’s a Chance’

Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) conceded that his proposal “is not going to get anywhere unless the Speaker and the President give in their respective positions.”

But he said he believes that “there’s a chance” the White House will accept the new taxes as part of an overall package to reduce the deficit. “I’m only giving you my gut feeling, but they want a budget-reduction package,” he said.

House budget negotiators said they will not respond to the Senate offer until they are satisfied that Reagan will support it. House Budget Committee Chairman William H. Gray III (D-Pa.) said his side wants to be assured that “the veto gun is back in the holster. The last I heard, it was drawn and cocked.”

The Senate negotiators’ package would achieve $65 billion in deficit reductions in fiscal 1986, even more than the $56 billion that the full Senate already approved. It would reduce deficits by $338 billion over the next three years and leave an $89-billion deficit in 1988.

$230-Billion Deficit

Without spending cuts or tax increases, the deficit is expected to reach nearly $230 billion in fiscal 1986, which begins Oct. 1, and remain at or above $200 billion a year indefinitely.

The package would:

--Impose a $5-a-barrel fee on imported oil, raising $25 billion during the next three years.

--Grant cost-of-living benefit adjustments for Social Security and other government-sponsored pension programs only every other year instead of every year, for a savings of $12 billion by 1988. If prices rose 5% one year and 4% the next, recipients would get a 9% benefit increase after the second year.

--Adjust tax brackets for inflation only every other year instead of every year, as current law requires. This provision would increase tax payments by $7 billion over three years.

--Reduce all domestic programs--except those designed specifically to assist the poor and those whose benefit levels are determined by formulas written into law--by 2%, for a savings of $5 billion. This would include educational assistance, highway aid and a host of other federal programs.

--Include a variety of domestic program eliminations and reductions that were part of previous Senate offers.

Talks between the House and Senate, which began six weeks ago, broke down last week for the second time when the senators rejected a House offer as not making enough domestic spending cuts.

Time is running out on the budget negotiations as various House and Senate committees prepare individual spending bills for the coming fiscal year, which begins Oct. 1. Without an overall spending blueprint, most congressional authorities believe it will be impossible for individual committees on their own to curb the deficit significantly.

Last Try

“The immovable object is being met by the irresistible force,” said Sen. J. Bennett Johnston (D-La.), a Senate Budget Committee member. “For the good of the nation, we’ve got to break this logjam. I think as late as it is, this is the last try, and I hope it will work.”

The Senate’s original proposal to deny next year’s Social Security increases died in a hail of fire from the House. That opposition apparently was not blunted by the revised proposal Thursday.

The proposal to add a $5 fee to oil imports also drew criticism, particularly from congressmen who represent import-dependent northeastern states. The negotiators, in an effort to blunt their opposition, offered to use 20% of the proceeds to ease the burden on regions described as “abnormally dependent” on imported oil.