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MOYNIHAN ASSURED ON SOCIAL SECURITY FUND

Sen. Daniel Patrick Moynihan, D-N.Y., said today the White House has assured him that President Bush will propose a way of preserving the integrity of the federal Social Security Trust Fund.

Bush's plan will be nearly identical to legislation Moynihan and Sen. John Heinz, R-Pa., proposed last year to take surplus Social Security payments out of the regular federal spending plan, Moynihan told a briefing with reporters later. He said budget director Richard Darman had informed him about the president's budget message, which will be delivered Monday.

The Moynihan-Heinz bill would extend from 1993 to 1997 the deadline for attaining the Gramm-Rudman target of a zero federal deficit.

The conversation between Moynihan and Darman indicates the administration may be looking for ways to deal with Moynihan's proposal to cut the Social Security payroll tax by up to $60 billion a year. The Bush administration has been quietly using surplus payments into the Social Security Trust Fund to make the federal deficit appear much smaller than it really is.

For example, $67 billion in surplus payroll taxes were used to bring the deficit down to $133 billion in the current 1990 federal fiscal year.

Moynihan's bill to cut the payroll tax, announced last month, has hit Washington like a political tornado, and Democratic leaders of both houses have stepped back from it. Nonetheless, Moynihan announced that Senate Finance Committee Chairman Lloyd Bentsen, D-Texas, has said he will hold full committee hearings on Moynihan's payroll tax-cut bill.

Asked whether he proposed the tax-cut bill in earnest or merely to trigger a debate on use of the trust fund surplus, Moynihan replied:

"I have a true and genuine conviction that it will pass or ought to pass -- and there is no point in saying that it will -- in the absence of an alternative such as the one Sen. Heinz and I put forth a year ago."

He said Senate Majority Leader George J. Mitchell, D-Maine, has told him he and other Senate Democratic leaders will hold a retreat on the tax-cut bill and other major issues in suburban Washington this Friday. Until then, Moynihan quoted Mitchell as saying Democrats will be asked to withhold their opinion on the Moynihan plan.

The mechanics of the Moynihan-Heinz bill, introduced Jan. 25, 1989, are that Social Security trust funds will be excluded from the deficit calculation under the Gramm-Rudman Deficit Control Act. The present deadline for achieving a zero deficit is 1993.

The new deadline under the Moynihan-Heinz bill would be Oct. 1, 1997.

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