Social Security ‘Off Table’ at Deficit-Trimming Talks

White House and congressional negotiators agreed today that Social Security payments will be immune from budget pruning--one of the few areas of consensus after three weeks of talks on the U.S. deficit.

White House budget manager James Miller and the key congressional leaders in the closely watched talks ruled out reductions in cost-of-living adjustments for the 35 million pensioners, widows and disabled people receiving monthly Social Security checks.

“It’s off the table,” Miller said. Sen. Bob Packwood (R-Ore.) and House Budget Committee Chairman William H. Gray III (D-Pa.) echoed his remark.

At the same time, Packwood said a higher gasoline tax apparently has been ruled out.

Gas Tax Discussion

Although a gasoline tax has not been discussed during the talks being held in the Capitol, the subject apparently came up at a meeting with President Reagan and Republicans last Friday. Reagan reportedly said he would go along with the tax if it were proposed by Democrats and coupled with a limitation on Social Security payments.

“The gas tax (increase) would be only used if you were to have more revenues because you had a package that had (cost of living) limitations,” Packwood said.

Asked specifically if it was dead, he said, “I think it’s gone because you are aiming for a minimal package, hoping to get to $23 billion (in cuts).”

The issue of cutting back on the politically sensitive Social Security payments was brought up last week in the discussions, raising speculation that it might be included in a final agreement.

Conflicting Signals

There also were conflicting signals from the White House on the matter after Friday’s meeting with Reagan.

When he agreed to the talks, Reagan had specifically said Social Security was excluded from proposals to reduce the budget deficit by at least $23 billion.

The President launched the bipartisan budget-cutting effort in reaction to the stock market’s crash on Oct. 19. Economists at most financial centers blamed the financial crisis on the gaping U.S. budget and trade deficits.

As today’s meeting between the negotiators started, Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) told reporters, “We’re making good progress but there are still some very major obstacles.”