Cuts in Social Security, Medicare to Be Urged : Co-Chairman of Bipartisan Budget Advisory Unit Also Suggests Increasing Gasoline, Liquor Taxes

The Democratic head of a bipartisan commission on the federal budget said Tuesday that he expects to recommend that the next President cut Social Security, Medicare and defense spending to bring the government’s budget deficit under control.

“There are no easy choices left,” said longtime Washington power broker Robert S. Strauss, who stunned an audience that included economic advisers to both presidential candidates with his candid, detailed comments. “We have to go to Social Security, Medicare, ent1769237605defense.”

The congressionally mandated commission’s “highest priority,” Strauss said in response to a reporter’s question after his speech, was developing a deficit reduction plan with as many spending cuts as politically feasible before considering possible tax increases.

He suggested that most people oppose raising income tax rates but might be more willing to accept increased gasoline taxes and stiffer “sin” taxes on alcohol and tobacco.

No Specific Proposals

During the presidential election campaign, neither Vice President George Bush, the Republican candidate, nor Massachusetts Gov. Michael S. Dukakis, his Democratic opponent, has been willing to make specific proposals for reducing the deficit from its current level of about $150 billion a year.

Bush advisers who heard Strauss’ remarks generally condemned them. Larry Summers, a top economic adviser to Dukakis, refused to comment on Strauss’ specific spending cut proposals, but he said he agreed with Strauss that “inevitably, the first priority for the next President must be deficit reduction.”

Strauss, a former chairman of the Democratic Party, took a swipe at Bush’s campaign pledge against higher taxes. He hinted that Bush and his advisers might accept increased taxes as part of a broader deficit reduction package.

“I know George Bush,” Strauss said, “and I think he knows better. . . . I hope after Nov. 8 (Bush) will take a calmer look. Certainly, Jim Baker (Bush’s campaign chairman and former Treasury secretary) knows we have to do something about the deficit.”

Privately, some of Bush’s policy advisers have talked about forging a so-called “deal of the century” with Democrats in Congress if Bush becomes President. The new Administration would accept some higher taxes in exchange for an agreement from Capitol Hill to reduce such benefit programs as Social Security and government pensions.

But Mark Goodin, a spokesman for the Bush campaign, said that Strauss’ suggestion that the GOP candidate will reconsider his opposition to taxes after the election “is ludicrous, absolutely ludicrous. When the vice president says no new taxes, he means it.”

Strauss is co-chairman with former Transportation Secretary Drew Lewis, a Republican, of the 12-member National Economic Commission, which was established by Congress to propose budget remedies after the election in November.

First Discussion of Plans

His comments, which were made at a conference organized by the Washington consulting firm of Smick Medley International on the economic issues facing the next President, were the most specific discussion yet in public about the commission’s plans.

The panel, which plans to begin public hearings the day after the election and deliver its recommendations by Dec. 21, has come under criticism for keeping its deliberations secret.

Strauss defended the panel’s decision not to open its meetings to the public before the election. Because various interest groups could force the two candidates to rule out any budget cuts that might be proposed, Strauss said, “we had to keep it out of the presidential debate, to the extent we are having a debate.”

The panel’s 12 members, split evenly between Democrats and Republicans, were appointed by congressional leaders and President Reagan after the stock market crash last October. They include several lawmakers, such as House Budget Committee Chairman William H. Gray III (D-Pa.) and the top Republican on the Senate Budget Committee, Pete V. Domenici of New Mexico.

Seeks Huge Deficit Reduction

Strauss said that the budget commission’s goal is to reduce the deficit by about $125 billion within four years after the new Administration takes office. He said that only one or two members of the commission had flatly rejected the importance of closing the budget gap.

Without being specific, Strauss said that he had found about $68 billion a year in spending cuts he could support. Although admitting that there are wide differences of opinion among the members, he predicted the “chances are 70-30” that the panel will agree “on a decent work product” well before the new President takes office.

In a later session at the conference, Strauss appeared to be trying to backpedal from his more provocative remarks. Although continuing to talk of reductions in government benefit programs, he suggested that he was not necessarily proposing cutting current Social Security benefits. And he reiterated that the “commission has not begun to make any final decisions.”

Opposition From Kemp

In the afternoon session, the Strauss statements were attacked by U.S. Chamber of Commerce economist Richard Rahn, a Bush adviser. Rep. Jack Kemp of New York, a former GOP presidential hopeful, said that the commission’s recommendations “should be consigned to the ashcan of history.”

Summers, the Dukakis economic adviser, said that preparing a “multiyear, credible” plan to balance the budget by the end of the next President’s first term is a necessary “foundation for steady, long-run growth.”