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Bush Implies OK of Tax Hike Later : In First Presidential News Conference, He Hints Easing of Campaign Pledge

January 28, 1989|CATHLEEN DECKER and TOM REDBURN | Times Staff Writers

WASHINGTON — President Bush, while still expressing firm opposition to tax increases during his initial year in office, implied Friday in his first presidential news conference that he might have to accept higher taxes later in his term.

His brief comments appeared to be part of a gradual easing away by the White House from Bush's strict, oft-repeated campaign pledge of "no new taxes."

Surprising reporters by calling them together suddenly in the morning for what turned into an unusually long, 43-minute White House news conference, Bush confidently fielded a wide range of questions. He established a chatty, informal tone that stood in stark contrast to former President Ronald Reagan's infrequent, carefully scripted prime-time sessions with the press.

Bush was asked whether his campaign pledge on taxes--"Read my lips; no new taxes"--is good for one, two or four years.

"I'd like it to be a four-year pledge," he said.

Budget Negotiations

The apparent softening in Bush's anti-tax stance could prove important in future budget negotiations with Congress.

Many lawmakers are becoming increasingly optimistic about their chances of reaching agreement this year on a deficit reduction package that avoids a tax hike. But if they are unable to raise taxes in future years, budget experts in both Congress and the Administration are worried that they will not be able to meet the tough Gramm-Rudman deficit targets for 1991 and beyond.

To avoid a future tax increase while bringing the budget into balance in the Gramm-Rudman target year of 1993, Bush will have to win approval for a host of politically sensitive spending cuts.

And beyond that, Administration officials have acknowledged in recent days that the economy will have to continue to grow at a robust pace at the same time that interest rates and inflation decline sharply--a historically unlikely combination of economic activity.

Earlier this week, during an interview with two reporters, Bush had implied a possible willingness to consider higher taxes in future years.

"I'm not thinking beyond anything other than to say I will not raise taxes, and I've got to stay with that approach," he said Wednesday. However, he added: "I haven't thought beyond one year, or anything of that nature."

Bush, slightly hoarse and suffering from a cold, also took a step toward firming up his relations with Congress by backing Reagan's proposed $45,000 pay raise for lawmakers and top executive branch officials. He passed up the opportunity to condemn the proposal, which has been excoriated by the public.

Bush acknowledged, however, that his early honeymoon with the Democrats who control Congress probably will not last much longer.

"I don't expect it's all going to be sweetness and harmony and light," he said. "The minute we get those proposals up there on Feb. 9, I expect we're going to have other firestorms swirling around."

The President plans to outline his budget plans and other priorities on Feb. 9 in an address to a joint session of Congress.

Answering questions on foreign policy at Friday's press conference, Bush appeared to be stung by criticism that he was allowing Soviet President Mikhail S. Gorbachev to set the agenda for the U.S.-Soviet relationship.

His Administration, Bush insisted, is determined to be "out front" on all aspects of its foreign affairs, but he said the White House must first complete a thorough study of the nation's international relationships. As part of that study, Bush has postponed indefinitely the resumption of strategic arms reduction talks with the Soviets that had been scheduled for Feb. 15.

Urges Prudence

"We're not going to let this Soviet thing put us in the mode of foot-draggers," Bush said. "We're going to be out front. There's no reason to suggest that all we have to do is react to a speech by the general secretary (Gorbachev). I want to take the offense in moving this relationship forward. . . . But prudence is the order of the day."

The President gave no hint about the nature of the initiatives he plans on U.S.-Soviet relations or any other area of foreign policy.

Asked to name the region of the world that would be the focus of his first foreign policy initiative, Bush replied: "All of them."

The President indicated that he will continue without change the Reagan Administration's policy of talking to the Palestine Liberation Organization as long as the group abides by its promise to accept U.N. resolutions on the Middle East that acknowledge Israel's right to exist and renounce terrorism.

"As long as they stay hooked and stay committed to those three principles, we will have, when appropriate, meetings with the PLO," Bush said. He added that he has not "given any thought at all" to a high-level meeting with PLO chief Yasser Arafat.

Bush also announced that he will visit South Korea as part of his previously announced trip to the Far East to attend the funeral of Japanese Emperor Hirohito in Tokyo and to confer with Chinese leaders in Beijing.

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