Democrats to Offer New Deficit Proposals

Democratic negotiators, responding to a GOP budget package that apparently has President Reagan’s blessing, plan to return to talks today proposing an alternative under which domestic programs would bear less of the brunt of the deficit-reduction effort, sources said Monday.

The sources confirmed that congressional Democrats will also suggest raising taxes higher than the $6 billion called for in the Republican plan, which House Minority Leader Robert H. Michel (R-Ill.) put on the bargaining table Friday.

“It’s another way of looking at the numbers,” said House Majority Leader Thomas S. Foley (D-Wash.), who refused to disclose any of the details of the Democratic package drafted in a closed session of House and Senate Democrats late Monday.

‘Time Is Running Out’

With the talks between the White House and Congress moving into their third week, “there is a building sense that we’ve got to drive toward an agreement, and time is running out,” said Rep. Leon E. Panetta (D-Monterey), one of the negotiators.

Both sides are looking for a way to reduce the deficit enough to calm the jittery stock market and to avoid the painful spending cuts scheduled to take effect automatically next week under the Gramm-Rudman law.

The Republican plan claims $30 billion in deficit reduction, well above the $23 billion necessary to avoid the automatic cuts. Foley said that the Democratic alternative would be “in the same ballpark.”

Reagan, meanwhile, offered what negotiators saw as new signals of flexibility in his demands that the deficit-reduction effort focus less on defense spending and tax hikes and more on paring back domestic programs.

Cites Cause for Concern

In a speech at United Way headquarters in Alexandria, Va., Reagan said that, although the securities markets have recovered somewhat from their Oct. 19 crash, “the lingering uncertainty and volatility are cause for concern.”

“Now is not the time to reverse course,” the President said. “However, some adjustments can and should be made.”

White House spokesman Marlin Fitzwater told reporters that Reagan has not committed himself to any specific plan, although he has viewed the plan put forward by Michel as “a reasonable approach.”

In their talks, both sides said that they remain leery of tampering with cost-of-living increases expected by recipients of Social Security and a number of other government-sponsored retirement programs.

Have Little Control

Moreover, as they try to get spending under control, lawmakers have relatively little control over entitlement programs--those for which people are automatically eligible if they are of a certain income or meet other criteria.

Democrats complain that the Republican proposal seeks too large a cut in all other domestic programs, which are known as discretionary spending. The $4.1-billion cut in the GOP plan, Democrats say, forces discretionary programs to bear more than their share of total reductions.

Some have also complained that the Republican plan would not take a big enough bite from defense spending, although the $4.9-billion reduction from projected levels would put the Pentagon’s budget $10 billion below what Reagan had sought.

Staff writer James Gerstenzang contributed to this story.