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Speaker Sees Approval of Deficit Plan : Wright Says Reagan Must Prod GOP to Pass Cuts

November 23, 1987|JOSH GETLIN | Times Staff Writer

WASHINGTON — House Speaker Jim Wright said Sunday that the controversial $76-billion deficit-reduction package agreed to by White House and congressional negotiators will be approved by Congress, but only with a strong effort by President Reagan to win support from his own party.

Republican congressional leaders, however, said approval is by no means certain, and one GOP senator vowed to introduce legislation that would freeze all federal spending at last year's levels, including cost-of-living increases for Social Security recipients.

Wright, a Democrat from Texas, conceding that the compromise plan "is not perfect," predicted that Democrats would still back the combination of budget cuts and new taxes as an alternative to the $23 billion in deep, across-the-board spending cuts called for under the Gramm-Rudman law.

A Bipartisan Effort

But the plan "will have to have support on both sides of the aisle. We probably cannot pass it all by ourselves," he said, adding that the outcome "is probably dependent upon the degree of support that it gets from the President and his political party."

Wright, appearing on NBC-TV's "Meet the Press," suggested that Reagan will have to focus his lobbying effort on conservative Republicans who oppose the $23 billion in new taxes over two years called for in the agreement, which was unveiled Friday at the White House after four weeks of marathon negotiations.

The bipartisan talks were aimed at cutting the nation's estimated $148-billion budget deficit for the current fiscal year and at reassuring Wall Street after the stock market plunge. Negotiators finally agreed on a plan to pare the deficit by $30.2 billion this year, and $45.8 billion in the following fiscal year. The plan calls for $9 billion in new taxes this year and $14 billion in fiscal 1989.

Debate in Congress

Now attention is shifting to Congress, where the budget package will be debated. The first task will be to fill in the blanks, since the compromise did not say which taxes would be raised and by how much. That job will fall to several congressional committees before the proposal can be voted on by the House and Senate.

If Congress fails to approve the spending cuts and tax increases by mid-December, the Gramm-Rudman spending cuts will automatically take effect. And as of now, it is unclear whether the compromise will be approved, said House Minority Leader Robert H. Michel (R-Ill.).

The GOP leader, appearing on ABC-TV's "This Week With David Brinkley," said many conservative Republicans in the House and Senate will balk at any tax increases, adding: "It is not going to be easy. And we are just going to be starting the selling process."

Michel, however, pledged that he and other GOP congressional leaders would support the proposal, saying he would "stick with what we have got as a bare bones minimum. . . . If there's going to be anything added to this, it's got to be on how to make the package bigger from the standpoint of savings," instead of additional taxes.

Tying Up Loopholes

Democratic leaders, meanwhile, suggested that the new taxes Congress will be asked to approve are contained in legislation they introduced this year. Those taxes "do not impact on low-income or middle-income Americans," Wright said. "They tie up some loopholes that had been left gaping for corporate taxes.

"They have a minimum corporate tax that is required. They place a ceiling upon the amount that one may take in interest deductions on home mortgages over $1 million and, surely, that doesn't really hurt anybody," he added.

Rep. Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee, said on the Brinkley show that the package would also call for an extension of the telephone excise tax and other proposals "in the vineyards" of tax increases that Democrats already support.

Some Republicans, however, have decided to push for legislation that would essentially void the compromise and replace it with tougher budget-cutting measures. Sen. Phil Gramm (R-Tex.) said he would introduce amendments freezing federal spending at last year's levels.

The proposals will include "a vote to freeze all cost-of-living increases (including Social Security benefits) at zero this year, and maybe put a limit on next year," he said on CBS-TV's "Face the Nation."

Gramm, who co-authored the budget-cutting law that bears his name, said the budget compromise shows how the White House and Congress can "deceive" the American people. The package does not contain long-term deficit reduction plans or "real" spending cuts to bring the nation's deficit under control, he noted.

"We did not do what Wall Street and what Main Street hoped we would do," Gramm said, expressing confidence that his proposal for a spending freeze "might (pass) in the Senate."

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