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President Calls House Tax Plan 'a Good Start'

December 05, 1985|KAREN TUMULTY | Times Staff Writer

WASHINGTON — President Reagan edged closer to endorsing the House Ways and Means Committee's tax bill Wednesday, but his yearlong drive for sweeping tax-overhaul legislation appeared to be in increasing jeopardy, largely because of opposition to the measure from his own party.

Reagan issued a statement late in the afternoon calling on the House to approve some sort of tax bill rather than "risk damaging, perhaps irreparably, an entire year's effort to achieve real tax reform."

He said that both the Ways and Means plan and a Republican alternative, "like our own, represent substantial progress from current law." But he pointedly avoided endorsing either and said that both "can only be considered a good start, not an end product."

Rostenkowski Disappointed

Ways and Means Chairman Dan Rostenkowski (D-Ill.), clearly disappointed not to have gotten a full-fledged vote of approval, said the crucial test of Reagan's support will be how hard he works to line up GOP votes for the committee bill before it reaches the House floor next week.

"It's not as strong as we wanted. But it's enough to send the reform campaign into next week," Rostenkowski said in a statement. "The fight has been yard by yard till now . . . Clearly, the President must come up with enough Republican votes to put reform over the top."

House Republicans, whose own alternative appears to have little chance of passing, showed little inclination to back the Democratic-led committee's plan when they caucused in closed session earlier in the day.

"It's just bad, period, and I'm voting against it," said Minority Leader Robert H. Michel (R-Ill.), who only a day earlier had expressed some willingness to go along with the President's plea to "move the process forward."

Senate leaders have indicated that they will not even consider the issue unless some version of tax legislation passes the House.

House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) told reporters: "We're going to need Republican votes. There's no question about that. . . . We're going to need a minimum of 75" of the House's 182 GOP members.

But Michel predicted that even with strong lobbying by Reagan, the bill would receive support from "just a handful" of Republicans.

The GOP votes are crucial, even though Democrats hold a lopsided majority in the 435-member House, because various Democratic factions are divided over the bill.

Those from oil-producing and heavily industrial states are echoing GOP criticism that the committee's plan would too heavily tax home-state corporations--many of which already are struggling financially. Other Democrats complain that revenues raised by the bill should go toward deficit reduction, not toward cutting tax rates.

Even as O'Neill was insisting that the measure's survival hinges on GOP support, House Republicans voted "absolutely no on the Rostenkowski bill" during their closed caucus, said Rep. Trent Lott (R-Miss.), the House's second-ranking Republican. Michel said the force of the opposition, registered in a voice vote, convinced him that he must oppose the measure.

"To move the process forward (as Reagan asked) rings very hollow with us," Lott said. "We're not going to buy it."

Reagan's initial tax plan--which, like the committee proposal, aimed to reduce overall tax rates by eliminating many popular deductions--also had drawn strong opposition from House Republicans. But GOP criticism of the Ways and Means plan, which would put a heavier tax burden on corporations, has been harsher.

Leaning Against Bill

Even Rep. Carroll A. Campbell Jr. (R-S.C.), one of a handful of Ways and Means Committee Republicans who voted for the bill in committee, said: "At this point, I would have to tell you I'd be leaning strongly against voting for it" when it reaches the full House.

Michel conceded that House Republicans may play a key role in denying Reagan what many believe is his only opportunity to achieve one of the top goals of his second term.

"That's probably the thing that really disturbs me the most in my role at this point," Michel said. "I don't like to be in the position . . . where I would foreclose that opportunity."

But California Rep. Bobbi Fiedler (R-Northridge), who reportedly played a major role during the closed meeting in forcing Michel to take a stand against the bill, said: "What might have been a priority (to Reagan) a year ago may not be a priority now."

Meanwhile, Rostenkowski was trying to unify Democrats behind the bill with the argument that Reagan would use its failure as a weapon in next year's congressional campaigns.

'Shame Us'

"I think the President can shame us by saying: 'I wanted to do something for you (voters), but those fellas up on (Capitol) Hill don't want to.' If Democrats are wise, they won't let this be laid at their doorstep," he said.

In his statement, Reagan noted that both the Ways and Means plan and the GOP alternative would "simplify the tax-bracket structure, lower individual and corporate rates, remove families living at or near the poverty level from the tax rolls entirely and substantially increase the personal exemption and standard deduction."

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