Democratic and Republican members of the Senate Budget Committee berated administration economic of-doning the $50-a-person tax rebate ficials yesterday for suddenly aban-portion of President Carter's stimulus package.
Several Democrats, including Chairman Edmund S. Muskie of Maine, and Joseph R. Biden of Delaware, indicated they might vote for a permanent tax cut for middle income taxpayers which Senate Republicans will offer today as a substitue for the defunct rebate.
While yesterday's budget committee hearing appeared to give impetus to the Republican push to cut tax rates between 5 per cent and 14 per cent on the first $20,000 of a household's income, Senate Democratic leaders do not think the measure will pass.
Muskie, while expressing interest in voting for a permanent tax cut as an alternative to the rebate, was cautious and did not commit himself, saying he was not as quick as some to "leap to a permanent tax reduction, although it appears to be the only alternative in many respects."
In the two-and-a-half-hour emergency hearing yesterday, Carter administration officials received some of their harshest treatment on Capitol Hill.
Sen. Henry S. Bellmon (R-Okla.), the ranking minority member, noted that Republicans and Democrats went out of their way "to accomodate a new President." But, by withdrawing the cornerstone of his stimulus package, the President has left the budget process "with egg on its face."
Muskie, who was a strong backer of the rebate, said that the need for stimulus continues and challenged administration contentions that the economic climate has changed enough since January to justify withdrawing the rebates.
He told the administration officials - Treasury Secretary W. Michael Blumenthal, Office of Management and Budget Director Bert Lance and Chairman of the Council of Economic Advisers Charles L. Schultze - that the sudden, unjustified withdrawal of the rebate after Congress redid its 1977 budget process to accomodate the package dealt "a body blow to the Congressional budget process."
Blumenthal told the committee that the President's stimulus package had two parts: "a quick injection" of buying power in the form of rebates and a slower moving public service jobs and accelerated public works program that would take over after the rebate effects wore off.
But conditions changed, Blumenthal said, as the economy picked up steam on its own without the rebate.
"When conditions change, it is short-sighted to hold on to an earlier decision when accumulating evidence says to do so would be unwise," Blumenthal argued.
"But on the very day (April 13) the policy shift was decided," Muskie challenged, "you made a strong speech in favor of the rebate." Muskie, who is angry that Carter failed to notify him before dropping the rebate, noted that a week earlier, at a Democratic leadership meeting, "we were left with the impression that all systems were go."
"There is no way of shifting gears on a daily basis. I am not impressed," Muskie said.
Blumenthal responded that he knew the President was reconsidering the rebate when he gave the April 13 address at the National Press Club. It was still administration policy, "so I defended it," he said. "But I tried to waffle manfully over the rebate because I knew it was up for review."
Sen. Henry J. Heinz III (R-Pa.), responded, "You were very specific and not at all waffling about the need for a rebate to offset the shortfall in government spending." At the April 13 address. Blumenthal also predicted the rebate would pass the Senate. It had already been approved by the House.