Reagan, Legislators to Meet Monday on Deficit

President Reagan and congressional leaders will meet Monday morning at the White House to initiate their summit talks aimed at reducing the federal budget deficit and calming panicky financial markets, Administration and congressional sources said Friday.

In a speech at the Labor Department, meanwhile, Reagan raised the possibility of simply freezing this fiscal year’s spending at last year’s levels, saying that such a step “would yield substantial deficit reduction.”

‘Redouble Our Efforts’

Reagan, still resisting a tax increase, said: “We’re going to go back to Congress and, in light of what’s happened, redouble our efforts to cut the deficit by cutting away overspending.”

The President is to confer Monday with House Speaker Jim Wright (D-Tex.), House Minority Leader Robert H. Michel (R-Ill.), Senate Majority Leader Robert C. Byrd (D-W. Va.) and Senate Minority Leader Bob Dole (R-Kan.).

Reagan said at a nationally televised news conference Thursday that all avenues for reducing the deficit, except cuts in Social Security benefits, will be open to consideration. He reluctantly acknowledged that the possibilities include increased taxes.

Wright said Friday that in Monday’s meeting, which is intended to set a framework for future talks, he will seek “personal assurances” from the President that everything is indeed on the negotiating table.

Byrd had urged Reagan to hold the first meeting this weekend. “I do not think we have time to wait or time to waste,” he said.

Baker Agrees With Urgency

White House Chief of Staff Howard H. Baker Jr. issued a similar assessment of the urgency of the situation. He said in an interview with wire service reporters that “whatever we should do, we should do soon.”

“It’s a different world today than it was Monday morning in the financial world,” he said, referring to the 508-point drop in the Dow Jones industrial average last Monday.

At the Labor Department, Reagan stepped back slightly from the conciliatory tone of his news conference comments Thursday. “Those who have to make the decision on whether or not to invest in the future of our economy see some very disturbing signs on Capitol Hill,” he said.

“We see a Congress that is unable to get control of deficit spending” and has “backed away” from its commitments to reduce the deficit according to the Gramm-Rudman budget-balancing formula, the President said.

Reagan also offered an upbeat assessment of the state of the nation’s economy.

“It’s an economy . . . that has a very bright future before it--a future of growth, low inflation and high employment,” he said.

Cites Wall Street Concern

“We’ve seen in the last week, however, that there is real concern on Wall Street. The recent turbulence in the stock market suggests that those who are investing in the future of our economy are worried that something--some roadblock--may be put in the way of that future.

“The disruption in our markets is sending a signal loud and clear to get our economic house in order,” Reagan said. “The markets are reacting more to the actions--and inactions--of government than to the deficit itself, which has been shrinking--down nearly 30% since the last fiscal year.”

The deficit was $148 billion in fiscal 1987, which ended on Sept. 30. That was down sharply from the $221 billion of the previous year. For the current fiscal year, however, the deficit is projected to remain at roughly its 1987 level even if, as required by the Gramm-Rudman law, $23 billion is trimmed from the level the deficit would reach without action to reduce it.